The RiskAPI service, developed by PortfolioScience, is a fully hosted and customisable risk solution that integrates seamlessly with existing applications and programming frameworks to generate risk calculations for multi-asset, multi-currency portfolios and individual positions. It is available as both an Enterprise software API and an Excel Add-In.
Rather than being a risk calculator, per se, it is a complete end-to-end solution.
"Our system has all the underlying data, and all the necessary analytics, connections and external data feeds within the infrastructure; everything needed to generate a full spectrum of risk calculations," explains Ittai Korin (pictured), President, PortfolioScience. "If they want, managers can come to us with nothing more than a description of their portfolio."
Short integration time
The fact that the solution is delivered as an API is quite unique in the marketplace.
Korin notes that one of the biggest disadvantages that clients of its competitors face is that it can often take several months before they see any system output due to the time it takes to integrate with in-house systems. "Because of the lightweight nature of our API interface, customers can get up and running and start generating results in a matter of days," says Korin.
High degree of customisation
In addition, because it is an API and is highly customisable, users are able to generate results according to how they work, and how they view the world. The idea is that users are not getting a standard off-the-shelf risk report that somebody else has built. They have full control over what parameters to use, which calculations to perform, and how to present the data.
Another important feature of RiskAPI is that it is offered "on demand". Once a trade is placed in a manager's execution management system, a request is automatically sent to RiskAPI, at which point all the risk calculations are instantly populated and conveyed to the end-user.
"Our philosophy is to provide clients with the same level of control that they would have if they were to build an in-house risk solution from scratch. Our hosted solution does exactly that, without the overhead of the manager having to build it and maintain it going forward. Every day there are changes to valuations, pricing etc. That ongoing monitoring and management can use up a tremendous amount of bandwidth. Clients can offload that to us and still maintain a high level of control," says Korin.
Broadly speaking, RiskAPI provides dynamic multi-model VaR, valuation, and stress-testing capabilities, whereby users can select and specify a variety of inputs.
"This provides a more sophisticated way to interact with our system. We have larger clients with in-house development teams using this solution to build their own enterprise risk systems. Larger funds, for example, will have an internal data warehouse. They use RiskAPI Enterprise in conjunction with their data warehouse, which contains portfolio position data, to run risk calculations and render reports when needed," explains Korin.
PortfolioScience also has connections to various data vendors covering different assets and markets to help ensure that the quality of data produces as accurate a picture of risk, at any given moment, as possible.
"We know how important data is to risk management. Ours is a very thorough and extensive database. Managers are getting accurate risk calculations generated off the back of the data we have at our disposal," concludes Korin