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Does your Valuation and Risk System Have the Right Stuff?
By Rob Garfield | February 21, 2017

For buy-side firms, low yields and negative interest rates are one of the biggest challenges to generating satisfactory investments returns.

For this reason, more traders and portfolio managers are seeking to improve returns with more complex strategies requiring new asset classes and derivatives. Results of FINCAD’s recent Capital Markets survey validate this trend. For this study, we interviewed 230 buy and sell side institutions from throughout the world. 92% of these firms reported that their use of derivatives would either increase or stay the same in 2017. For those looking to increase their derivatives usage, 57% were either unsure or certain that their systems were unable to handle such a change.

Findings from Aite’s recent “Shifting Sands” survey showed similar trends in both buy- and sell-side firms going in a multi-asset direction with their trading strategies. When asked about their top business objectives, a majority of participants listed the ability to trade in as many markets as possible in order to find alpha. Additionally, 76% of the buy-side firms surveyed said they are already doing multi-asset trading.

Unfortunately, many firms’ legacy systems are straining to handle new asset classes, currencies, and instrument types, and are therefore limiting their ability to deploy more sophisticated, yield-enhancing strategies.

What if there was a solution available that could solve these problems and easily integrate with your existing systems? This is precisely what FINCAD’s F3 valuation and risk solution does. With unmatched speed, F3 generates more accurate pricing, valuation and risk, enabling you to improve trading and hedging decisions, and better decisions lead to better returns.

F3 provides the flexibility and control for the most demanding quantitative teams, the speed and accuracy for portfolio managers and traders, and reliability and comprehensive reporting for risk managers. Our clients tell us that the solution is quite easy to use, and customizations can be made in a matter of weeks – not years, as is often the case with legacy technology.

All of this adds up to better portfolio and risk management decisions and improved returns. It also eliminates the high costs associated with maintaining legacy technology and reconciliations between the front and middle office.

Check out this video to learn more about how we can help you solve your valuation and risk challenges and attain better returns.