OpenLink/Maven Wave Partners Survey Found Technology Architecture and Data Seen as Biggest Hurdles to Implementing OTC Derivatives Valuations Best Practices

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52% of respondents revealed technology architecture and data seen as biggest hurdles to implementing OTC Derivatives Valuations Best Practices

Open Link Financial, Inc. ("OpenLink"), a leading provider of cross-asset trading, risk management and operations processing software, today released the results of a survey conducted in conjunction with Maven Wave Partners, a strategy, process, and technology consulting solutions firm. The survey participants were senior operations professionals at investment firms involved in OTC derivatives valuations focused on valuations best practices, and how firms are trying to build transparency into their enterprise processes.

A majority of respondents (52%) indicated that the biggest hurdles to implementing valuations best practices were data and technology architecture. The breakdown of their responses to this issue was as follows:

  •     Technology Architecture (27.0%)
  •     Data (24.3%)
  •     Derivative Instrument/Product Complexity (21.6%)
  •     Manual Operations (17.6%)
  •     Regulatory Uncertainty (9.5%)

"The survey responses are congruent with what we are seeing in the industry. Firms are trying to adapt their management of both vanilla and exotic derivatives products in a market that is becoming increasingly regulated and complex," said Eric Gulbrandsen, Managing Director, Financial Services Practice, Maven Wave Partners. Mr. Gulbrandsen added that, “Firms are already implementing the known industry changes in the short-term, while actively interpreting and planning for the long-term changes.”

Other key findings highlighted the factors which were motivating firms to improve their valuations processes, with 45% stating compliance with industry best practices, 17% noted regulation, 26% said pressure from internal/external stakeholders, and 12% of respondents were driven in response to adverse events.

"These survey responses viewed together paint a picture of how firms must balance their appetite for more sophisticated and complex derivatives products, while managing the associated valuations and operational process challenges these trades present throughout the transaction lifecycle," said Ken Knowles, EVP, Financial and Risk Solutions, OpenLink. Mr. Knowles went on to comment, “Best practices for many firms will require a framework to manage multiple data sources for all aspects of their operations, trading and risk management, consolidated through a consistent enterprise technology vision.”

The survey was conducted at an OpenLink sponsored webinar entitled: Perspectives on OTC Derivatives Valuations Risks & Impacts. The webinar was designed for senior operations professionals at investment firms who were looking to understand the challenges around OTC derivatives valuations, including risks and impacts, and explored how firms can improve the valuations process and manage technology challenges to achieve more consistent pricing and reference data. To learn more about the webinar and OpenLink’s solutions for OTC derivatives valuations, please visit: http://www.olf.com.

About OpenLink

Founded in 1992, OpenLink is a provider of cross-asset trading, risk management, related operations processing and portfolio management software solutions for the commodity, energy and financial services markets globally.

OpenLink's client base of more than 350 customers worldwide includes 12 of the top 25 largest commodity and energy companies by market capitalization, eight of the largest financial institutions and 11 of the largest central banks, as well as major hedge funds, commodities companies and public utilities.

Headquartered on Long Island, New York and with offices in New York City, Houston, London, Berlin, Vienna, São Paulo, Sydney, Singapore, Moscow and Toronto, OpenLink has more than 900 employees worldwide.

Maven Wave Partners provides management consulting, technology leadership, and outsourcing services to companies seeking exceptional business advancement through transformation.

Creating and capitalizing on business change demands a Fusion-PoweredSM blend of strategic insight, management depth, and technology leadership. Our team has completed engagements for over 100 clients to produce over $1 billion in improved results across a range of industries.

Maven Wave’s Financial Services Practice provides full-service consulting to a wide range of retail and institutional financial firms. Our Financial Services Practice brings extensive consulting experience to firms in banking, consumer credit, insurance, asset management, investment banking, capital markets, hedge fund, proprietary trading and exchange markets. Maven Wave’s consultants are seasoned professionals with experience in leading complex and critical engagements for the world’s leading financial services firms.

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