Global independant energy trading business

The Challenge

The firm had a vision to streamline many processes across their front, middle and back-office, from managing their risk data across multiple trading platforms, to providing traders with detailed analysis of shipping movements. Each legacy system provided various levels of reporting functionality, but data was in separate silos, and reporting was slow and lacked flexibility.

There were several key areas identified for improvement including:

• Credit Systems: current systems were Excel and legacy based, and were manually intensive and error prone
• Risk Data Warehousing: data was isolated and without proper integration
• Collateral Management: data from different systems was collected and collated manually
• Limit Management: insufficient monitoring
• Legal Contract Administration
• Historical Data: improved auditing and analysis, especially on the import / export trade flow
• Position Management: Evaluate positions, deltas and curves via a centralized tool
• Energy Trade and Risk Management Lifecycle Reporting
• Trader Analysis Information: develop an automated spreadsheet based approach for tracking coal and iron ore shipping movements
• Counterparty Reviews and Internal Rating: implementing a process and managing balance sheet information.

The Solution

The RiskCubed business intelligence (BI) solution from CubeLogic solved these credit, risk management, data, and reporting challenges.

CubeLogic were selected to not only deliver current solutions but partnered with the firm to build out further capabilities which were unique to the trading firms requirements. The solution was deployed to tightly integrate with the upstream transaction systems and the downstream accounting tools and holds large volumes of information such as trades, cash flows, positions and exposures from across the enterprise.

The client elected to utilize predefined accelerators to connect to their infrastructure and designed and built workflow that move data bidirectionally. For example, they can now onboard a new counterparty from within a single CubeLogic workflow, engaging all necessary stakeholders along the way, then propagate the newly approved data element to all the other systems that need to know of it.

Outcomes and Benefits

The main challenge with any BI platform is around leveraging the power of the tools into applications that solve significant business problems. To deliver results quickly, CubeLogic developed a close working partnership with the business and IT community so that any changes could be rapidly addressed.

The firm now has a single data warehouse across trading with a set of advanced BI tools that provide:

• Advanced credit risk exposure reporting
• Reporting of live positions and P&L
• Trade flow cube for coal shipping analysis
• Financial analysis and counterparty rating
• Historical reporting, trend analysis and COB deltas
• Fully centralized reference data management
• Advanced visualization and reporting across the enterprise with dashboards, PowerPivot, Excel, and WebGrids
• Reporting of FX positions • Fully automated, OTC margining function