The countdown towards implementation of the Fundamental Review of the Trade Book (FRTB) has begun in earnest. Starting later this year in the Asia-Pacific region, FRTB will require banks to adopt a more extensive and complex set of data and analytics to calculate and understand risk charges. As a result of FRTB, banks will need to capture a much more granular level of data, as well as derive useful insights for better decision making.

 

As banks test their strategies towards FRTB and their systems infrastructure, Risk.net recently hosted a panel discussion entitled “Action time on FRTB: is your bank ready for the data challenge?” to explore the key data and analytics challenges as well as the opportunities arising from FRTB implementation. It invited Opensee to participate since in January it won Risk.net’s FRTB Product of the Year. Opensee’s Founder and Chief Executive Officer Stephane Rio joined Arnold Jesper Skimminge (Head of Quantitative Analytics, Nordea) and Sumesh Lund (Lead Market Risk Manager, Nordea) in the discussion moderated by Phil Harding (Commercial Editor of Risk.net).

 

What will actually be required?

 

What emerged in the panel discussion was agreement that if banks are to comply with the new rules for market risk capital, their infrastructure will need to provide two fundamental elements. The first is accurate, near real-time data for the front office and risk managers to manage portfolios and to simulate potential impacts. The second involves infrastructure changes to overcome the technical challenges involved with handling the immense data size (in some cases up to 100 times larger than that which is typically dealt with today).

The wide-ranging discussion also explored the complexities of calculating capital under FRTB if banks use a standardised approach (SA) or an internal models approach (IMA). This is a topic that we examined in more detail a few months ago in our blog, “Data Is the North Star for Navigating the Default Risk Charge Challenges Presented by FRTB”.

 

How can Opensee help?

 

Opensee’s platform runs simulations, ensuring front office and risk managers are (1) provided with the correct data, and (2) able to get insights from this data on an intraday, real-time basis by being able to examine data at a granular level and in an interactive way. Risk.net judges praised the Opensee platform for its “top notch data management capabilities” when they awarded it FRTB Product of the Year. 

 

Through Opensee’s technology, banks gain a complete view of their data, not only to produce daily FRTB reports, but to unlock on demand actionable business intelligence through accurate, flexible and fast analysis of their data. 

 

If you would like to learn more about the FRTB capabilities of Opensee’s platform, as well as other use cases in risk management, liquidity management and ESG, please book a demo at [email protected]

 

To view the recording of the Risk.net webinar, please click: “Action time on FRTB: is your bank ready for the data challenge?”.