Evaluation, Selection & Implementation of Trading, Risk, Financial & Operations Systems

Offering: Risk mitigation, Efficiency improvements, Remaining competitive

Client Type: US division of European Bank

---

Client Situation

Head Office mandated the implementation of a robust trading and risk management system as a prerequisite for approving the Treasury business plan, which aimed to expand the volume and complexity of products traded. The client faced several challenges:

• Redundant trade entry and valuation processes.

• Inaccurate P&L reporting and significant delays in calculating risk measures.

• The need to develop a front-to-back business and application framework to support the growth of the US division's trading businesses across Fixed Income, Derivatives & Structured Products, FX, and Money Markets.

Beyond the Head Office mandate, which was the primary driver, secondary drivers included:

• Risk mitigation.

• Efficiency improvements.

• Remaining competitive.

Approach

Our proven methodology and comprehensive toolkit enabled us to expedite the evaluation and selection process. For the evaluation phase, we leveraged:

• A core set of functional requirements tailored to the client.

• A standard set of metrics customized for evaluation.

• A refined RFP template for the client and target vendor solutions.

• A vendor scoring model adapted to the client’s needs.

• A framework for vendor testing and demonstrations customized to ensure compatibility with client requirements.

• An interview guide for vendor reference checks.

• A business case framework for developing a formal proposal for the chosen solutions (Midas, Summit, PolyPath, Andrew Davidson).

For the implementation phase, our activities included:

• Conducting detailed gap analysis and negotiating contracts and SLAs.

• Tracking open issues and providing regular status reporting.

• Preparing and executing comprehensive test plans, including unit, integration, user acceptance, volume, performance, and parallel testing.

• Performing data migration and conversion planning, covering static, market, and transaction data.

• Planning and designing implementation strategies, including the development of enhancements and interfaces.

• Delivering training, creating detailed policies and procedures, and documenting infrastructure.

• Building a data warehouse for customized financial, operational, and risk reporting.

• Developing workflows and procedures for all front, middle, and back-office processes.

• Establishing middle-office control procedures, including limits, exception reporting, escalation, pricing/valuation, and aging procedures.

An overview of our Approach and Deliverables for the evaluation & selection components that leverages our proven methodology with our comprehensive toolkit.

Benefits

Our collaboration with the client delivered a comprehensive solution that addressed their immediate needs and supported long-term growth:

Business Context Diagram

• Successfully evaluated and implemented the Midas, Summit, PolyPath, and Andrew Davidson solutions.

• Gained Head Office approval for the US division's Treasury business expansion.

• Delivered measurable benefits, including:

  • Reduced risk through robust controls and streamlined processes.

  • Improved efficiency across trading, risk management, and reporting.

  • Enhanced competitiveness in the market.

This transformation equipped the client with a modern, integrated trading and risk management system to support their growth ambitions while meeting Head Office mandates.