HIGHLIGHTS
Client: Nordic Bond Pricing (NBP)
Business Objectives
- Achieve accurate bond valuations and key ratio calculations
- Reduce operational risk
- Decrease time spent on manual processes
Requirements
- Introduce a flexible valuation solution that reduces technical complexity
- Calculate prices and key ratios/sensitivities based on market standard pricing formulas
- Ease of integration with existing systems
“With the FINCAD solution technical upgrades take mere minutes. It’s a remarkable time savings"
Stig Korsnes, Senior Analyst, NBP
Background
Nordic Bond Pricing (NBP) is the leading independent provider of daily evaluated pricing and benchmark indices for the Nordic bond market.
Challenge
The firm needed valuation and risk technology that could help them generate fast and reliable pricing and key ratio calculations for several thousand instruments.
Solution
NBP ultimately selected FINCAD for enterprise valuation and risk, which includes the best-in class, object-oriented analytics library. FINCAD now serves as the pricing engine for the company’s valuation process, and is used for pricing more than 3,000 corporate bonds.
“FINCAD provides reliable and accurate independent bond prices and allows us to respond swiftly to market changes,” said Vegard. “Additionally, FINCAD’s flexibility helps us to model and price non-standardized cash-flows/ bonds, and will permit us to handle more complex bond structures efficiently and with minimum operational risk.”
Results
NBP has achieved a number of positive results since implementing FINCAD.
Centralized Data: Using FINCAD has simplified NBP’s technical setup, as now there is one central location for data to be stored.
Reduced Risk: The reduction in manual interaction involved in producing valuations is resulting in lowered operational risk and time savings.
Greater Efficiency: NBP’s processes have become more efficient. “With the FINCAD solution technical upgrades take mere minutes. It’s a remarkable time savings," commented Stig.
Flexibility: Users at NBP appreciate the flexibility and modular nature of FINCAD. “From our experience with FINCAD, new features and enhancements can be added effectively and in a timely manner. This would not have been possible for us before without some clever engineering,” said Stig.
Looking Forward
NBP plans to utilize FINCAD to create customized solutions when needed. “The financial instruments we handle are typically plain vanilla fixed income. However, there are a few instruments, such as non-standardized cash-flows/amortization bonds and linked notes that require additional attention in order to calculate the correct values. We expect that FINCAD will be able to create customized solutions and models that will help us handle such cases efficiently, and with minimum operational risk,” concluded Vegard.
“FINCAD provides reliable and accurate independent bond prices and allows us to respond swiftly to market changes."