Northern Trust announced today it has enhanced its comprehensive suite of risk tools by integrating BarraOne with its global operations platform to strengthen predictive risk analytics and reporting across asset classes, including derivatives.
The integration of BarraOne’s global, multi-asset class portfolio risk service with Northern Trust’s custody, accounting, fund administration and collateral management platform provides a seamless view of risk and compliance information for clients including investment managers, pension funds, insurance companies, family offices and other asset owners. Utilizing Northern Trust’s single, integrated risk portal, clients can apply the full spectrum of risk models and stress-testing to generate predictive risk reports that can be used to adjust strategies, maintain investment policy compliance or meet regulatory requirements.
“Our integrated tools can provide insights across multiple risk categories, such as dedicated credit models, value-at-risk models, stress and scenario tests, and exposure analysis,” said Ian Castledine, global head of Investment Risk product for Northern Trust. “The key, however, is to distill these vast amounts of data into meaningful information using a robust risk framework. Northern Trust institutional clients can create targeted reports to meet a variety of risk management needs, and access them through our flexible web portal, Passport, and its analytical dashboards or by using our Data Direct™ tool for extracting into other formats.”
Examples of predictive risk functionality for different types of users include:
· Scenario-based analysis including interest rate shocks and credit risk shocks to help insurance companies comply with increased reporting required by the "Solvency II" regime, which forces insurers to set capital requirements more in line with their risks.
· Overnight reporting on derivatives market and counterparty risk, for Investment Operations Outsourcing clients.
· Enterprise-wide risk reporting for financial institutions subject to a range of regulatory measures coming into effect across the globe, including UCITS IV and Dutch Financial Assessmemt Framework (FTK) in Europe, Dodd-Frank in the U.S. and FSR 107 sensitivity reporting in Asia.
Jim Trotter, global head of Investment Risk & Analytical Services at Northern Trust, said: “Using these state-of-the-art tools, we can forecast risk over short and long horizons, assess risk from various sources, stress-test investments and better prepare diversification analyses across multi-asset class portfolios. As investors navigate reduced liquidity, extreme volatility in markets and rapidly changing credit profiles, Northern Trust continues to invest in our risk reporting capabilities to provide institutional clients with the tools to manage a complex environment.”
