Canada’s largest synthetic oil producer successfully completed a multi-million dollar project to implement a vendor risk system across their global enterprise. This system was to help manage both their physical trades as well as their growing derivatives trading business. Users had been on-boarded globally and the business was moving forward on the single, central system.
Soon after go-live, their trading volumes grew, and more data was fed into the system. As a result, the performance degraded considerably. Batch calculations which initially took 1 hour slowed to 6 hours which hampered their business operations considerably. The firm was increasingly concerned about not realizing value from their significant investment. They initiated a remediation project, however with data feeds tightly coupled to the risk system, they had limited options. They explored additional hardware, fine tuning the database, staggering loads, all to no avail.
In parallel, the Compliance team faced a deadline to establish trade reporting to market regulators. In parallel to the performance improvement initiative, they were exploring vendor solutions to pull data out of their risk system and convert trades to send to the regulators. This time they were set on a solution which was outside the core system so they would have flexibility in dealing with technical challenges.
As they looked to the marketplace for regulatory reporting, they decided on K3 and discussed their overall set of challenges with the BroadPeak team. For the immediate compliance needs, K3 could serve as a plug-and-play tool for pulling, transforming, and sending trade data to regulators. Additionally, they discovered that K3 could solve their performance issues with a single setting. K3 can compress data records on ingest to guard downstream consumers from information overload. Lastly, K3 could further benefit their compliance and risk teams by automating position limits management for the derivatives markets.
The firm assembled an internal project team of 5 people across IT, Risk, Compliance, and Operations along with two people part-time from BroadPeak to implement K3 across the board in 10 weeks. This project touched all aspects of their trade data from ingest to analysis to outbound reporting. At go-live, the internal team was able to take over running K3 fully as they drove the implementation. This alleviated them from a long training phase of getting people familiar with a new process or technology. K3 delivered immediate value for their investment.
On the ingest side, K3 was able to buffer their internal system and compress trade counts by 80%. As a result, they were able to disband the performance improvement efforts and gain immediate value from their global risk system.
For analytics, the risk and compliance teams were able to manage position limits with actionable visual dashboards. With a single click, they were able to dive into a position and have conversations with traders on how to manage activity as they approached the limits.
Reporting deadlines were met easily, and the operations team was able to keep things going as new trade types needed to be reported or new data elements were required by regulators.
With increased focus on trade surveillance, the firm’s compliance team has now licensed direct market orders feeds via K3. These feeds cover all their traders’ activities in the derivatives markets. K3 delivers an organized data set of this activity, which functions as the foundation of their internal surveillance program. The compliance team is now able to build custom tools to manage compliance requirements by regulators and also slice and dice the data to answer questions bespoke to their business.