Derivative offerings with global impact

Making derivatives and structured products available to a greater audience

In today’s finance world, derivatives and structured products have become mainstream. No longer are they reserved for sophisticated, institutional investors. With an increasing number of financial institutions and wealth managers across the globe using them on a daily basis, it is vital they have the tools to help them capitalize on this normalization.

Bringing more transparency to wealth clients

How lifecycle monitoring of derivatives and structured products keeps portfolio risks under control, at any time

Risk exposure is top of mind for wealth managers and financial institutions. If your client’s portfolio carries a risk exposure that is too high or too low according to the client’s risk profile, that exposes the institution to a regulatory risk or leads to a lower than expected performance. Due to their asynchronous payoffs, the risk levels of structured products rise and fall during lifecycle. Furthermore, barrier hits or knock outs can have an impact on the products. So, in order to advise their clients on a highest standard, clients advisors need all that relevant information.

The solution to controlling risk exposure is transparency. Transparency is possible with tools that support client advisors during the whole lifecycle of structured products and the management of product portfolios. The lifecycle monitoring of derivatives and structured products can help financial institutions and wealth managers provide an extraordinary service to their wealth clients and ensure client portfolio risks correspond to client risk profiles. When transparency is increased, advisors can provide more solid advice and build trust with the client.

“It is counter-intuitive to invest in a product or a fund in which there is no price transparency, where you can't see the value of the assets and have little ability to exit the investment if it no longer meets investors' requirements.”

Investment Week

By working with the right partner, you can adopt a client-specific lifecycle monitoring service in combination with an alerting system that allows you to make improvements in:

  • Product redemption dates
  • Barrier-hit probabilities
  • Knock-out probabilities
  • Auto call probabilities
  • Risk figures/Value at Risk (VaR)
  • Yield estimations

Among the many benefits this can offer are an improvement in the sales process, and, ultimately, sales revenue. Additionally, getting greater transparency over the whole portfolio enables advisors to get control of portfolio risks at any time.

Offering derivatives to any client, using any banking system

How Avaloq is creating a centre of competence for structured products by acquiring Derivative Partners

In July 2019, we acquired Derivative Partners, Switzerland’s leading information and data provider for structured products and derivatives. With 15 years of experience providing highly valuable market information, tools, research and calculations for complex financial products, Derivative Partners works with issuers, private banks, asset managers and more. Offering services such as lifecycle management of structured products, calculation of risk figures, and calculation of a wide variety of key figures within structured products.

Data analytics is a powerful tool for reinventing the financial experience in a fully digitalized, always-on and data-driven world. With Derivative Partners on board, we aim to make superior data models available to clients. Not only will this help them achieve new levels of transparency, it will prepare them for the new era in the global financial industry.

Like to find out more about Derivative Partners and how they have helped increase transparency and improve advisory? Get in touch.

Our roadmap

Continuous improvement of our solutions – for the near and long term

To strengthen the services we offer with regards to Derivates Partners, we’re working to integrate key figures as well as a life cycle monitoring service. We’re also continuously improving data integration capabilities in addition to creating an enhanced valuation service.

Note: The content of this roadmap is for information only and is intended to outline the general product direction; accordingly, it should not be relied upon for the purpose of making purchasing decisions. The information provided is not a commitment, promise, or legal obligation to deliver any material, code or functionality.

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