Data integration and complex event processing (CEP)

Emergent Innovation (emergent-i) has been innovating in the fields of Global Data Integration, Enterprise Data Warehousing and Business Intelligence since 1995. We truly believe that the current observations of mini financial market crashes and globally linked crises signal the complexity created by new types of information and processes that are currently not accounted for in leading global corporations.

Emergent-i together with its leading partner Informatica offer next generation data integration solutions which can handle any type of complex semi-formatted or unformatted data. Our partner Panopticon Software provides us with the real-time processing we need to visualize output of Complex Event Processing (CEP) engines.

Informatica:  In Depth Analyisis of Real-Time and Historical Data

Informatica's innovative approach to CEP focuses on automating and extending real-time intelligence processing and response for the end user. Informatica's software provides a solid foundation for user-defined event detection, data correlation, and enterprise alerting. The software is used throughout the Federal Government's national security community to perform critical processes such as fusion of multiple data sources, rule creation for tactical decision making, and homeland security-oriented threat identification.

Informatica's software addresses numerous commercial business requirements, such as Anti-Money Laundering (AML) automation, anti-phishing investigation automation, corporate payment card policy compliance, employee fraud monitoring, logistics optimization, and geospatial tracking. In all cases, Informatica provides end users with the power of continuous all-source analysis, heightened situational awareness and ultimately situational dominance when time-critical action is required.

The ability to visually analyze combinations of real-time and historical events is useful in many industries, most particularly in financial services and telecoms. For example, in financial services, capital markets firms can make efficient, intelligent use of data for their trading, quantitative analysis and risk management needs, combining streaming and intra-day analytics with historical trend analysis. Specific applications include Real-Time and On-demand Risk Analysis, Pre-Trade Analytics, Market Monitoring, Trading, Market Liquidity Analysis (MLA), Liquidity Management, plus business profitability analytics.

An advanced BI Dashboard allows managers to view aggregated risk, performance and attribution data from all funds under management right down to the constituent level of a single portfolio.

It's critical for portfolio managers to have a clear and up-to-the-minute understanding of how their investment choices are performing. The information in traditional reports can take hours or even days to absorb and interpret. Yet managers must make decisions quickly, especially in volatile market conditions.
 
The solution supports collaboration within organizations as well as presentation of complex performance and risk data in intuitive ways. The software's ability to handle large amounts of data from multiple databases makes it a great fit for managing complex funds.
 
This highly visual approach to data analysis allows users to understand precisely how their portfolio is performing and responding to changes in the market. It enables portfolio managers to identify problems and see the impact of changes; they can take immediate action to maximize profitability. You can see all details for all portfolios in a single view. You can drill all the way down to see details about the underlying instruments or drill up to view aggregated exposure across different metrics. You can also analyze portfolio relative contributions, screen out constituents that do not merit attention and bring up complete details on the ones you need to focus on.

Panopticon: Real-Time & CEP Visualization in Financial Services

Financial markets are dynamic - they change rapidly and constantly. Business rules and processes can't remain static; software needs to adapt to changes in the markets. Hedge funds, investment banks and mutual fund companies use CEP and real-time streaming feeds combined with Panopticon's data visualization tools to implement user-friendly solutions that help managers adapt to market changes quickly.

In particular, capital markets are embracing this combination of CEP, real-time and visual analytics since real-time insight and rapid response is critical. The rate at which new information comes onto a trader's desk can be overwhelming without these tools. Instead of spending hours plowing through traditional reports, portfolio managers can spend minutes or even seconds with an analytical dashboard to identify actionable outliers, patterns and trends.

Our financial services clients use Panopticon's ability to visualize real-time and CEP data in several ways, including:

-      Market data enrichment to synthesize new market data from raw inputs. Combine data from different sources based on rules and then visualize the results in Treemap, Heat Map, Scatter Plot and other information visualizations presented in interactive dashboards. Compute and display insights like "best bid and offer" data across specific markets.

-      Market liquidity analysis to combine order book data from multiple markets to analyze full market liquidity, to determine where, when and how to trade.

-      Quantitative trading to monitor the market for pre-defined conditions that represent opportunities, automating the response to capitalize on the opportunity before it disappears.

-      Algorithmic execution is the process used for most common automated trading orders. As more people use this method, algorithms keep changing for those in search of an edge. CEP combined with Panopticon's ability to visualize trading data form a platform for rapid implementation that help get new algorithms in place quickly.

-      Smart order routing using live market data to intelligently route orders for best results and in compliance with best execution policies.

-      Best execution compliance to collect data at the time of each trade to monitor and show compliance with best execution policies.

-      Order stream analytics to monitor order flow in real-time for insight into market dynamics and customer behavior; watch for patterns of undesirable trading.

-      Real-time portfolio valuation to continuously update positions in real-time using incoming transactions and value positions using live market data, including net gain/loss and exposure calculations.

-      Generate alerts when thresholds or limits are approached or exceeded.

-      Real-time risk aggregation to consolidate position and risk information from multiple systems to monitor consolidated exposures in real-time.

Panopticon's data visualization software provides C-level executives, fund managers, traders, and others with the monitoring and analysis tools they need to conduct profitable business while maintaining a close eye on risk exposures. It's impossible to gain this visibility with traditional reports that take hours to analyze and interpret.

Emergent-i Solution: Credit Risk Monitoring & Analysis: Free Up Capital, Increase Transparency and Maintain Basel II Compliance

In order to comply with Basel II and optimize profit opportunities by minimizing reserve capital requirements, bank managers need nimble solutions that they can alter quickly without extensive programmatic changes or IT involvement.

An easy-to-use, interactive dashboard allows bank managers to understand their true level of risk exposures at all times. They can share that information in a timely manner with auditors, regulators, clients, or even the public. They can drill down for more detailed data on any single client or loan or switch to another dashboard view to see the same data from a different perspective.

The Emergent-i solution utilizes a combination of Panopticon's real-time data visualization software and Informatica's data management tools to allow bank managers to understand precisely the drivers of risk - much faster than is possible with traditional methods - and enables decision-makers to take immediate action on important findings.

This combined solution allows credit managers to view data from many separate databases. This simplifies the problem of collecting and disseminating financial data from large numbers of clients. For example, you may store ratings information from your credit analysts and agencies in one database, debt balance and terms information in another, financial reports from clients in yet another, and so on. The software is designed so that it can easily connect to multiple data sources and use easy-to-understand dashboards that utilize data from some or all of those sources. The system can also handle complex calculations and aggregations of data from multiple sources.

A broker's Client Value Dashboard focused on identifying true client profitability

This Management Intelligence Dashboard displays Commission, Revenues and Trade Costs across client, product, and industry categories. This analytical Dashboard helps brokers identify over and underperforming areas. It specifically shows the broker which clients are intrinsically profitable. Trade Cost takes into account the risk of taking the trade onto the broker's book and consequently highlights that the high commissions charged by some hedge funds makes them unprofitable. The analysis focuses on the current month and also provides an overview of historical data in order to identify trends and anomalies.
 
Clients are divided both by type and tier to group them by related trading activity. The Cost Ratio which is used throughout this example compares Trading Costs to Net Revenue.

Emergent-i Solution: Trade Monitoring for a Global View of Performance, Exposures and Risk

We have also developed a Trade Monitoring solution that provides managers with a set of indispensable tools that help them quickly identify anomalies and track the activities of brokers. The system gives managers the ability to oversee the risk profile of all trading activities across the entire enterprise. No more trying to laboriously piece together the picture using reports. A manager can see a global view of trading activities on a single screen, understand exactly where the organization sits in terms of enterprise risk, and see how well each trader is performing. An implantation of our Trade Monitoring solution pays for itself many times over by helping managers spot problem trades before they can be executed and by helping them see opportunities they would easily miss using standard reports.

With this system, managers can view the status of their Ordered/Placed/Executed (OPE) trades and easily gauge the efficiency of their market activity. Panopticon interactive visualizations display views at the Trader, Broker, Fund, Team, Sector and Security levels with OPE relative to intraday and longer term day impact, price changes and relative workloads. In addition to helping them easily oversee and understand the enterprise risk profile, the system's ability to handle and visualize real-time streaming data allows managers to easily benchmark the holdings and performance of their operation against various indexes.

Managers can also monitor relative workloads, performance of traders compared to goals, day impacts, execution risk, accumulated and averaged values, ordered values versus executed values, and other criteria that will help them better manage their people and operations. The software's comprehensive analytical capabilities also help managers make more effective and useful reports to other departments, supervisors and clients.

Use Informatica and Panopticon to Answer the Right Questions about Risk

Managers in banks and fund operations must be able to monitor and analyze their risk data quickly in order to answer questions like:

-      What is my VaR?

-      Where is my VaR?

-      What is moving my VaR?

-      Do I have any concentrations of risk that I should take action on, either internally (by office/region/portfolio) or externally (market/sector/counterparty/issuer/currency, and so on.)

-      Is this a one off or a common occurrence?

-      Is this problem or opportunity unique to a specific book or does it exist elsewhere?

Contact Us

c o m e Computer Systeme GmbH

Switzerland

T. +41 62 865 67 30

sales@cme.ch

Emergent Innovation Ltd

United Kingdom

sales@emergent-i.com

Emergent Innovation (PTY) Ltd

South Africa

sales@emergent-i.com