Imagine Adds New Risk Service, Eases Spreadsheet Reliance

This on-demand, cloud-based service allows end-users and vendors to cherry-pick the services they need, rather than having to download the full Imagine trading system. That platform is now broken down into a set of functions, says Lance Smith, CEO at Imagine.

"What's unique about this is that users can define their own functions as apps," Smith tells Buy-Side Technology.

Smith views Imagine Risk Services as a sort of analytics-as-a-service setup. Imagine can create a set of analytics—such as for exposure analysis or real-time profit-and-loss (P&L)—and then the New York-based vendor can customize a data visualization module and then tie the two together. With this release, Imagine can make each of those apps—both user-defined functionality as well as pre-canned Imagine functionality—available through a restful application programming interface (API).

As an example of what makes this unique, traditional order management systems (OMSs) sometimes don't contain portfolios and don't tend to have margin calculators to do a pre-trade compliance check, according to Smith. Users can bolt on an Imagine app and run that pre-trade risk check through the Imagine cloud, pass it through the portfolio or trade idea, and then Imagine will return the results.

Imagine officials list these three areas as prime use-cases:

● An order management, execution management, or portfolio management system extending its capabilities to include a full pre-trade risk compliance, risk reporting and limit monitoring solution.

● An accounting system using Imagine Risk Services to complement its P&L reporting to include Value-at-Risk (VaR), stress-testing and scenario analysis, broadening and deepening the overall value the vendor can bring to its clients.

● A fund administrator enhancing its services to include basic or advanced risk or portfolio management capabilities such as VaR, P&L attribution, and investor reporting such as Open Protocol Enabling Risk Aggregation (Opera). Administrators and their clients gain efficiencies as a result of an integrated workflow and reconciled data from a single provider.

Spreadsheet Pains

Imagine has also been working diligently to develop solutions that help firms to break free of spreadsheets.

Users can tap into Imagine Risk Services to run stress tests on investor portfolios. As an example, if a hedge fund has to run an investor report—which is held in a Microsoft Excel spreadsheet—because the investor called and wanted to see the portfolio under a series of stress tests. The manager simply has to link the Imagine app for security analytics to their Excel spreadsheet. The portfolio is then sent to the Imagine Risk Services engine, the stress tests are run in the Imagine cloud, and the results are sent back into the spreadsheet.

While Smith says Excel can be useful, it has problems when it comes to scaling, there are limited release management capabilities, no source code control, and IT isn't protected because the spreadsheet can be emailed around. Through the Imagine system, the business intelligence is done in the cloud and helps to shorten load times and the probability of a crash.

"You normally have a graphical user interface (GUI) tier, a business logic tier and a data tier; in Excel, you've grounded them all into one," he says. "The idea of linking Excel risk services is to use Excel for what it's good at—a front end and tool that allows you to easily move things around—but do the heavy lifting someplace else."