In July 2018, Brady was recognised as the energy trading and risk management software market leader (aka the ETRM Behemoth) in the Energy CIO Insights, ETRM special.
This month the editors from CIO Advisors interviewed our Chief Product Officer, Senior Software Engineer and Head of Credit Risk for inclusion in the leader board of ‘TOP 10 Enterprise Risk Management Companies of 2018’.
“Risk management is often overlooked, despite being a vital component of the energy and commodity trading industry,” begins Libby Koehn, Chief Product Officer at Brady PLC. By specializing in mitigating such challenges Brady PLC has taken pole position while perfecting a precise concoction of trading operations, governance, and risk management controls through its suite of trading and risk management software solutions.
Brady’s proficiency in the energy and commodities risk management (E/CTRM) space is built on a suite of products that help customers to manage their commercial decision-making and market execution processes, ensuring more complete management accountability for decisions so that they are made in accordance with a firm’s risk policies.
Brady Accountability Compliance (BAC)
“One of the vital factors that drive an organization’s success is the reputation it builds over time through trades and engagements. However, such reputations are easily tarnished when an organization fails to meet its stakeholder or customer obligations. Most reputational risks stem from a lack of corporate governance. At Brady, we’ve addressed the topic of reputational risk by expanding our product portfolio to include a new solution that manages reputational risks,” explains Libby. The company’s products enable decision makers to automate their operational workflows, assess risks associated with multiple organizational layers, streamline decision support and proactively manage market trade execution tasks and liquidity, while additionally supporting the needs of energy and commodity companies by helping them meet new, more robust regulatory and governance control requirements.
Brady CTRM / ETRM
Aleksandar (Sasha) Cvetkovic, Senior Software Engineering Manager at Brady, explains that trading companies have a specific need and a strong demand for solutions that help them to understand and model physical and financial commodity instruments. These solutions ensure that risks are accurately assessed, so that customers have the data they need to decide on suitable actions.
Brady’s competency in delivering a configurable engine that models risk measurements and profit and loss is essential. Furthermore, Brady excels in employing a unified engine that automates trading of energy and commodities operations. While machine learning-driven automation eliminates extensive labor requirements, minor hindrances in automation can cause catastrophic problems, affecting the entire workflow of a trading firm. Brady averts such setbacks by placing risk management at the center of its solution portfolio to obtain a bird’s-eye view of an entire business.
Brady Credit Risk (BCR)
BCR is a specialized credit risk solution for the Energy and Commodity markets, that can be delivered on-premise or hosted in the cloud. Brady Credit Risk Product Owner, Ian Tobin, says “Our credit risk solution has always had best of breed functionality, but our primary focus has been to improve the user experience and pro-actively deliver alerts and the relevant credit risk information that each user specifically wishes to see. This enables users to react to high risk events that require immediate action and to better optimize their daily workflows.”
BCR measures counterparty exposure, detailing a hierarchical view of Mark to Market (MTM) and settlement risks within legal and guarantee hierarchies. Organizations can view Potential Future Exposures (PFE) and execute pre-deal checks using a variety of methodologies, such as simple add-on’s, parametric models or using Brady’s Monte Carlo simulation engine. BCR also allows Over the Counter (OTC) margining through credit support annexes and associated netting structures, automating user’s workflow at critical stages of the margining process.
One of the many distinguishing features of BCR is that it offers configurable models facilitating internal scoring of counterparties based on a set of quantitative and qualitative questions. A counterparty’s financial information can also be imported electronically or entered manually. A separate reporting layer allows clients to build their own reports or to use the standard BCR reporting suite that is linked to Power BI and Tableau for improved data visualization.
In the near future, Brady plans to incorporate distributed ledger technology and machine learning capabilities to enhance its capabilities in the E/CTRM landscape still further. “We are aware of the potential risks prevailing in this sector, and they are addressed through our solution sets natively. We not only implement comprehensive risk management strategies in our products but we also help our customers to manage and address the risks connected to the market changes in a proactive manner,” concludes Koehn.
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