How can data analytics technology benefit a bank’s swaps business?
Warren Rabin: Banks are operating in an increasingly data-driven environment. As the volume of data linked to trading activity and interactions with clients grow, the challenge of harnessing and analysing that data in real-time has become more critical.
One of the first benefits a bank will see when deploying analytics like Mosaic Smart Data’s MSX platform is the ability to combine its electronic and voice traded swaps transaction data into a single view. It can then unlock the true value of this data for descriptive and diagnostic purposes across all channels in real time. Also, and arguably more importantly, it allows you to identify unique insights relevant to each client so that you can anticipate their needs and service them in a highly tailored fashion.
In swaps, given the complexity, size and breadth of the market, one of the key areas where we can gain new insights is in risk management. Often, swaps positions are re-evaluated and repriced at the end of the day. With the MSX platform, all the transaction data is streamed in real-time, so it allows for instant insight into our client flow and risk across all channels including both voice and electronic activity. The productivity and efficiency gains of this technology are clear and are a significant boost to our sales teams who are increasingly measured in a more quantitative way as they set about improving our client relationships.
By better understanding our franchise flows compared to market trends, it provides an ability to identify noteworthy insights. For instance, spotting trends where clients are transitioning from LIBOR to SONIA in GBP Swaps while at the same time decreasing their demand for OIS (Fed Funds) Swaps in USD, pinpoints observations otherwise lost.