RiskTech100 Winner’s Spotlight: Mirai

One to Watch - Financial Risk and Reporting 

Mirai has been recognized as a Chartis RiskTech100 “One to Watch” in Financial Risk and Reporting. The Madrid-headquartered provider has been identified for its strengths in providing complete ALM (Asset and Liability Management) solutions to the financial sector. 

The Mirai Platform: a new generation ALM SaaS platform

Founded in 2013, Mirai first emerged as a specialist consultancy, exclusively dedicated to advancing ALM, Liquidity, FTP (Funds Transfer Pricing), and Regulatory projects. Years of collaborative efforts with banks meant that the firm was uniquely positioned when it made the strategic decision to transform this expertise into a solution in 2016. Olmo Vázquez, Co-Founder and CEO, explains: “We aimed to develop a new generation enterprise software solution that marked an evolutionary leap in ALM. Our platform is meticulously crafted to challenge industry norms, addressing the functional, technological, and evolutionary shortcomings present in other solutions on the market. It excels in performance, offers substantial time and cost efficiencies, provides enhanced data granularity, facilitates faster time-to-market, and guarantees regulatory compliance.” 

As a relatively new and rising vendor in the ALM space, Mirai features a very dynamic product development roadmap. With quarterly innovation releases, the Mirai platform evolves in direct response to the requirements of Tier-1 clients. Its ability to solve enterprise challenges means that it also boasts one G-SIB (Global Systemically Important Bank) among its client base. 

The breadth and depth of Mirai’s offering appeals to clients. “Mirai goes beyond developing a mere ALM point solution; we also address liquidity risk, regulatory reporting, and FTP. This holistic approach positions Mirai as a provider of a sophisticated unified suite of Balance Sheet Management Solutions, all seamlessly integrated into our proprietary SaaS platform,” says Vázquez. 

The integration of ALM functionalities - and common parameterization across all scenarios and modules -empowers organizations to navigate the complexities of balance sheet management, enabling rapid and informed decision-making.

Performance and flexibility

The transformative nature of Mirai’s capabilities compared to many existing solutions is attracting attention. Vázquez highlights Mirai’s platform performance as a key driver behind the firm’s success, with cloud-native technologies providing unprecedented computational power and speed.

“We are cutting scenario processing times from hours to minutes. For example, since partnering with Mirai, our G-SIB client has experienced a significant decrease in computation time, from over 35 hours down to just 25 minutes. This agility is essential in high-volatility scenarios. Another particularly important benefit, given current market volatility, is the ease with which clients can create new scenarios and run financial risk models. Our clients can now run scenarios multiple times per day, which is inconceivable with other vendors in the market,” he explains.

Financial Institutions (FIs) are increasingly seeking greater modeling capabilities. As they have transitioned from running a low-double-digit number of stress scenarios to now often having more than 100 scenarios to run, FIs require solutions that can meet these demands. 

Mirai’s robust, adaptable and comprehensive framework enables its clients to craft, implement and run an unlimited number of stress tests and scenarios to gauge the responsiveness of assets and liabilities and explore a multitude of assumptions swiftly. 

The firm sees its comprehensive data analytics and quantitative modeling capabilities as key strengths, particularly in terms of flexibility and customization, empowering users to tailor their approach to their unique requirements. 

In the context of liquidity stress tests, Mirai facilitates daily executions across a spectrum of metrics, encompassing LCR, NSFR, and other vital regulatory reports. Within FTP it provides a dynamic and customizable tool for estimating, forecasting and managing transfer prices aligned with the bank’s balance sheet. It offers a wide range of calculation methods including the ability to create unique calculations based on the contractual phase or state of a contract.

Vázquez also draws attention to the greater level of information granularity. “It is the first and only platform in the market capable of calculating metrics and scenarios at a contractual or transactional level, providing a higher level of detail and accuracy. This marks a significant leap forward in financial analytics, successfully setting a new industry standard that reflects our commitment to innovation and excellence,” he says.

The management layer enables clients to easily create management data and reports tailored to their needs through an intuitive web designer. Clients can also access Mirai’s suite of predefined out-of-the-box reports, summarizing Balance Sheet, Interest Rate and Liquidity Risk positions. “Every time our clients run models, reports are automatically generated. Many of our clients leverage our platform to report to the ALCO (Asset-Liability Committee),” says Vázquez.

Contractually guaranteed regulatory compliance

Another significant advantage of Mirai is its ability to ensure compliance with increasingly stringent regulatory requirements, both current and future.

Mirai’s regulatory reporting solution addresses the complex landscape of interest and liquidity reporting obligations, automating the creation of a wide array of essential regulatory reports, including EBA liquidity reporting and IRRBB. It ensures compliance with diverse regulatory bodies and provides advanced tools for analysis and decision-making.

“We are simplifying the regulatory report generation process for clients, contractually guaranteeing that every new regulatory request is available in our platform before it becomes mandated. Our unwavering commitment ensures continuous regulatory compliance, offering our global customers’ peace of mind. Now, instead of waiting for regulations to come into force or investing money in new projects, our clients know we are taking care of that for them,” explains Vázquez.

Recent developments

Mirai is focused on delivering increasingly customer-centric operations. One key example is the frequent innovation releases. Every quarter, the firm introduces major new solution capabilities, free of cost, ensuring that customer investment remains aligned with regulatory requirements and the evolving landscape.

Vázquez adds: “At Mirai, we prioritize our clients’ experience and convenience. Our architecture is designed for seamless updates, allowing us to implement changes with minimal service disruption. Deployments to our clients’ live systems can occur in a matter of minutes. This marks a paradigm shift for clients accustomed to incumbent solutions, where version migrations used to require months-long projects. This approach also fosters close collaboration, enabling us to align our roadmap with our customers’ needs. If they have a request for new functionality, we can incorporate it into the roadmap. And that’s really appealing because we are extremely flexible and responsive to their requirements.”

Vázquez cites the incorporation of credit spread risk in the banking book, enrichments to the FTP model, adaption to new regulatory requests from the ECB, and coverage of the regulatory reporting requirements of the Bank of Mexico and Bank of Chile, as examples of developments in the last 12 months. 

Additional developments include External Modeling Information (EMI) functionality, which enables the loading of external tables for incorporation into modeling, and the development of a process automator that facilitates the creation of workflows for executing recurring processes without the need for manual intervention. For instance, a workflow can be designed to automatically trigger specific scenarios, right after contracts are loaded. This automation ensures that critical processes are executed promptly and accurately and enhances efficiency.

Future ambitions

Over the next 12 months, the firm will adapt to the new IRRBB requirements from the ECB and incorporate regulatory reports from markets not yet available in the tool, such as Brazil, the USA, and the UK. It will cover additional financial reports, such as FINREP (Financial Reporting) or COREP (Common Reporting). Finally, Mirai plans to launch a brand new enterprise solution for FP&A (Financial Planning & Analysis) for the global market. 

Mirai will also increasingly leverage AI and Machine Learning (ML) techniques, with two new modules for modeling:

• The Mirai Sandbox - a development module for modeling and back testing. Customers will be able to create their own ML models within the testing environment. Model outputs can be used as inputs for other Mirai processes, enabling end-to-end integration.

• The Mirai ML module (Machine Learning Core Capabilities), which will integrate advanced machine learning into the Mirai platform. Models will cover clustering, default, prepayment, line of credits, non-maturity deposits, and market interest rates models. 

At a strategic level, Mirai has ambitious growth aims, seeking to further boost market visibility and market share. Geographically speaking, Mirai’s growth strategy involves focusing on mature markets in Europe and the United States and expanding into specific Latin American markets where it already has a presence, such as Mexico, Brazil, and Chile.

“We are on a mission to position our SaaS as the most powerful and comprehensive Balance Sheet Management platform in the global market,” says Vázquez. “While our platform is suitable for any bank regardless of size, it particularly addresses the problems faced by Tier 1 and Tier 2 banks. Our ability to solve the performance and cost issues faced by these institutions means we are attracting the attention of additional G-SIBs.”

“The multifaceted nature of balance sheet optimization, driven by the imperative for margin growth, regulatory compliance, FTP considerations, and the need for agility, solidifies its role as a significant and ongoing focus for Financial Institutions. Enterprise SaaS players like Mirai, which cater to these complex dynamics, will continue to play a pivotal role in empowering organizations to navigate and thrive within this evolving landscape,” Vázquez concludes.