Front Office Risk Management Technology, 2019: Market Update and Vendor Landscape

This report updates Chartis’ view of the market and vendor landscape for front office risk management (FORM) technology. While the market dynamics that we identified in our 2018 FORM report persist, over the past year several developments have been shaping the landscape, including:

  • The increasing popularity and use of risk as a service (RaaS).
  • The continued growth of decoupled architectures (including the leveraging of the Python ecosystem).
  • Wider use of fixed-income analytics.
  • A re-examination of the role of high-performance computing (HPC) and other technology components (including graphics processing units [GPUs] and GPU databases) in building performant computational capabilities (in both internal and RaaS scenarios).

We have seen each of these trends accelerate over the past 12-18 months, and we anticipate that they will continue into 2020. For vendors, cost pressures resulting from changes to the operating environment following the financial crisis continue to play a key role. Banks are more skeptical of the return on investment (ROI) for new FORM systems, despite the opportunities they offer, and are much more open to systems consolidation and new technologies that could reduce cost and enhance flexibility.

Consolidation, in fact, is manifesting among financial institutions (FIs) and vendors in two ways – either as a means to increase in size, or as a way to specialize – and both are shaping firms’ strategies. Vendors have several courses of action to consider as they acquire or extend different parts of the FORM value chain, including modularization, partnerships and RaaS strategies. Chartis believes that those that adopt a more flexible, modular and open approach can offer the best and most efficient solutions and partnering options.

This report uses Chartis’ RiskTech Quadrant® to explain the structure of the market. The RiskTech Quadrant® uses a comprehensive methodology of in-depth independent research and a clear scoring system to explain which technology solutions meet an organization’s needs. The RiskTech Quadrant® does not simply describe one technology solution as the best risk-management solution; it has a sophisticated ranking methodology to explain which solutions would be best for buyers, depending on their implementation strategies.

This report covers the following providers of FORM solutions: Beacon, Bloomberg, Calypso, FactSet, Finastra, FIS, Hanweck, IHS Markit, Imagine Software, Intellect Design, ION, MSCI, Murex, Numerix, Orchestrade, Quantifi, RiskVal and TriOptima.

We aim to provide as comprehensive a view of the vendor landscape as possible within the context of our research. Note, however, that not all vendors we approached responded to our requests for briefings, and some declined to participate in this research.