Shifting to an operational role
ActivePivot helps Finance and Treasury groups shift into a vital operational role that impacts the bank’s profitability and accountability. Owning real-time operational analytics capabilities, Finance and Treasury can provide intraday inputs to traders and risk managers, improving collateral optimization, liquidity risk and P&L validation.
Optimizing collateral decisions and seizing arbitrage opportunities requires a global view of multiple assets. Yet, because data is typically spread across a vast number of siloed systems, most organizations are still missing a consolidated, real-time view of all collateral exposures, inventory and CSA to be able to optimize collateral decisions.
ActivePivot leverages your investment in existing systems by aggregating and consolidating data from multiple sources, and creating a central collateral layer that sits on top of your existing systems. Storing data in memory and updating it incrementally, it provides you with views of all inventory, exposures and collateral requirements, letting you analyze collateral data at any level of detail. You can make optimal use of available collateral, capture arbitrage opportunities and minimize initial margin collateral. Predictive analytics enable evaluating alternative optimization scenarios, such as assets cherry-picking and evaluating the effect of ratings changes and market shifts.
Using two out-of-the-box algorithms, “Cheapest to Deliver” and “Preference Pledging”, you can be up and running within weeks. You can then gradually plug your customized rules and algorithms to build your bespoke optimization solution.
Liquidity risk reporting
Basel III has greatly impacted liquidity risk reporting and stress testing, with liquidity shocks now requiring the selection of a broader set of criteria and the absorption of millions of cash flow attributes across hundreds of historic days.
Easily handling these big data requirements, ActivePivot provides intraday insight and flexible reporting capabilities that extend beyond the mandatory LCR and NFSR ratios. Contractual and stressed cash flows are aggregated from trade processing systems at the individual trade level - enabling instant computation of running balances and liquidity risk metrics such as survival period, liquidity gap, or regulatory ratios. Liquidity analysts can select multiple cash flow criteria, such as instrument type, counterparty and rating, to define the stress scenario scope; and they can dynamically break down ratios according to any level of detail - with no limitations.
New stress scenarios can be created on the fly, with users viewing scenarios through any available dimension and drilling-down on any metric to understand the impact of a shock. Furthermore, multiple stress tests can be easily combined together, without any need for IT help each time a new shock is defined.
Delivering the official P&L within a day’s notice is a pressure that’s all-too-familiar to product controllers. Most of the day is spent on manipulating Excel spreadsheets and manually reconciling end-of-day data - leaving too little time for actual analysis.
ActivePivot streamlines this process by federating end-of-day data from front-office, risk, estimated P&L and accounting. Eliminating the dependency on slow batch processes, it aggregates on the fly meaningful KPIs such as P&L Greeks buckets, bucket mismatches, VAR limit utilization and more - allowing product controllers to view KPIs from any angle and drill down to the trade id level.
Product controllers can test ‘what-if’ scenarios and manually adjust figures to instantly view the impact on P&L before final sign-off, with all adjustments fully documented and auditable. The total freedom of analysis accelerates the detection of outliers and improves P&L data reliability, turning product control into a key contributor to the bank’s overall accountability.
What They Say About Us
Our report into data management and BI for risk recognised the role being played by Quartet FS in supporting business users in capital markets, exchanges, hedge funds, and asset managers who require near/real-time Big Data analytics. For financial institutions to have full visibility of their risk exposure and improve their performance, senior management needs to have clear, relevant information on the whole enterprise. In large, multi-national institutions with multiple technology systems, gaining a coherent view of the financial position and risk faced by the organization will always be difficult, which is where solutions such as Quartet FS’ ActivePivot can play an important role.