By Chris Kentouris
Complex event processing (CEP) technology provider Aleri is introducing today a risk monitoring framework designed to manage market and liquidity risk in real time.
Aleri has long offered a liquidity management tool geared toward treasury and cash management departments, according to Nick Deacon, Aleris managing director for Europe, the Middle East and Africa. The new product--Real-Time (RT) Risk Monitoring--can be adapted for market and credit risk, as well as counterparty and settlement risk.
Market volatility and the growth of counterparty risk have prompted trading firms to look for better tools to manage their exposure, said Jeff Wootton, VP of product strategy for Chicago-based Aleri, in a statement. Wootton contends that available tools arent sophisticated enough to provide a timely, consolidated view of the entire trading operation.
RT Risk Monitoring provides users with real-time analysis of positions, says Aleri, helping them identify excessive levels of exposure to a sector, asset class or counterparty. Using the Aleri CEP platform and its online analytical processing, or OLAP, server, the software allows clients to aggregate and examine data across multiple dimensions.
A global agency brokerage that Aleri declines to identify has signed up to use the system to measure settlement risk for its equities trading desk. Deacon stressed the real-time capabilities that CEP technology can bring to risk management, adding that the new platform can be integrated with a number of third-party risk systems.
Last month, Aleri announced that it had acquired Mountain View, Calif.-based Coral8, one of a handful of CEP competitors that include StreamBase Systems and Progress Software Corp.s Apama business. Development of the new risk system was unrelated to that deal, said Deacon, and the combined company is still considering how to integrate the risk framework with the Coral8 product lines.
While event processing providers initially made their mark in the trading arena, financial firms have increasingly been using the technology for market data analysis and risk management. Firms seeking to obtain a comprehensive view of risk across the enterprise have tapped data management software to normalize information and provide common formats and identifiers and CEP engines for quicker analysis.
Futures commission merchant Rosenthal Collins Group, for one, has developed a real-time risk management system based on CEP technology from Coral8. The system, expected to launch this quarter, is designed to identify trading patterns that deviate from historical behavior. Last month, Sybase said that it had integrated Coral8s CEP engine into its RAP Trading Edition platform to allow traders, risk managers and quantitative analysts to perform real-time analytics on streaming trade and market data. Buy-side block trading platform Liquidnet uses Coral8 to monitor trades and identify suspect activity in real time.
Apama says that some of its customers use its technology for pre-trade risk checks. Apama has also partnered with technology consultancy Detica Group on a real-time surveillance platform for market centers and trading desks. London-based Turquoise and the U.K.s Financial Services Authority use a surveillance platform from the companies.
This article can also be found at SecuritiesIndustry.com.
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