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Key Considerations When Assessing a Valuation and Risk System
By Rob Garfield | November 15, 2017

The current investment climate is nothing short of extremely challenging. Negative rates are becoming more widespread, and even positive rates are just barely positive.

What all this complexity means is that investment managers are being forced to look to new and emerging markets, and more sophisticated strategies to find returns. However, the reality is that many firms’ existing systems were simply not designed with a multi-asset world in mind. Thus, in order to use more sophisticated, yield-enhancing trading strategies, most firms will need to upgrade their valuation and risk technology.

But, with numerous options in the marketplace, how do you know which valuation and risk system will help your firm succeed? There are five distinct considerations that are proven to be effective in helping investment managers identify the valuation and risk system that best suits their needs. In today’s blog post, we will discuss three of these. Our brand new eBook, 5 Questions to Ask When Upgrading Your Valuation and Risk System, explores all five in detail.

1. Will it help improve my investment returns?

The increase in multi-asset trading is happening in the here and now. In fact, a recent study conducted by Aite Group (the Shifting Sands Survey) revealed the top two areas of business growth for surveyed buy-side firms were expanding into new asset classes and emerging markets. This trend indicates the high priority they place on connecting to as many markets as possible in their global search for alpha. 

Firms that are to be successful with multi-asset trading need the ability to quickly and easily gain access to these new markets that promise better yield opportunities. A system in which it is easy to make changes without coding can support your firm both now and in the future. This will enable you to quickly take advantage of new investment opportunities as they arise.

2. Is it easy for me to use?

How well will the system you are reviewing help you manage complexity? How easy is it to customize it to your needs? How easily can it integrate with your existing systems and workflow? All of these factors will help you make better business decisions that will enable you to improve returns. Flexible modeling is also becoming a necessity for meeting today’s and future requirements. You need a solution that can grow with you as your needs change.

3. How much support will I receive?

There is comfort in knowing the vendor you are dealing with is fully invested in making your solution work for you. One of the best indictors of this is the level of support the vendor give its clients. Therefore, consider a vendor that offers training tailored to your needs, and a knowledgeable customer support team – a team that is ready and willing to answer questions for you at all times, regardless of time zone. Also, consider working with a team that is educated not only about the software, but about current market practice as well.

Selecting a system that fits the above criteria will help you make better decisions and improve your returns. You’ll be able to enter the markets you need, when you need to enter them. You’ll also be able to improve risk management by being able to share consistent information across the front and middle office. Strong analytics will help you build better teamwork and foster collaboration. Staff will have more time to spend driving the business forward, instead of on manual tasks. All of this will help you inspire improved confidence in your investors, and give you a competitive advantage in a very tough environment.

For more information, download our new eBook: 5 Questions to Ask When Upgrading Your Valuation and Risk System.  In it, you’ll find critical information on implementation, functionality and support considerations that will help you identify the right valuation and risk system.