In response to the financial crisis, global regulators unleashed a tsunami of regulatory guidance, initiatives, standards, and rules, including Basel 2.5, 3, MIFID, EMIR, MIFIR, IOSCO, Solvency II, CRD IV, UCITS, AIFMD, and the Dodd-Frank Act, which alone includes over 2,000 pages of rules and 16 major areas of reform. These regulations and the shifts in markets have hit buy-side firms as much as their sell-side counterparts and have created considerable uncertainty.
Firms need to know what products will be available to them. They also need to use investment products that match their prospectus or liabilities they are funding. Buy-side firms also need to provide return. They face fee and return pressures and, as spreads have tightened, are looking for the right mix of risk-adjusted products. They are also looking at asset class. Firms need to improve transparency, have clear compliance and cross checks, proactively monitor their credit and liquidity exposure, and ensure they cover their assets.
In a rapidly changing operating environment buy-side firms need to not only comply with the regulations, but also to adapt to a new marketplace. The new goal is a performance-oriented trade and risk management execution strategy for asset allocation with a strong focus on stress-testing and scenario analysis.
For buy-side risk management solutions, this means the focus has to be redefined as either:
- More data management and analytics-driven to build a foundation of efficient risk and financial management or;
- Best-of-breed solution for specific, performance-oriented and value-based risk management requirements.
This report covers the competitive landscape for buy-side risk analytics. This report also covers the capabilities and market position of Quantifi for buy-side risk analytics. Chartis believes Quantifi to be one of the leading vendors in the buy-side risk analytics marketplace.