Kakapo Risk has been designed to integrate with existing trade and risk systems topologies. At Kakapo, we're well aware that the introduction of a new Market Risk system needs to be simple and the result seamless.
Why Integrate using Kakapo Risk?
The integration features of Kakapo Risk are compelling for three reasons:
- Customers can migrate to a feature-rich, technically advanced and high-speed Kakapo Risk system without incurring the risk of a "big bang" project approach.
- Kakapo Risk is flexible and extensible with good asset class coverage so customers can increase their footprint in a controlled way as they slowly decommission their legacy systems.
- Customers who wish to retain their existing investments in their Market Risk systems and/or risk engines can use Kakapo Risk to augment their overall capability while maintaining their existing systems.
While Kakapo Risk can be used as an organisation's stand-alone and sole Market Risk system, most larger organisations will need to integrate Kakapo Risk into their prevailing risk system environments.
A client can integrate Kakapo Risk into their organisation in a variety of ways from a standard "trade load" model to the sophisticated integration of customer-developed risk and pricing engines. Customers can integrate in a standard way by loading their trade and market data and exporting results in a variety of forms to ensure their risk is fully measured and diversified across all books. But Kakapo Risk's integration features go well beyond this, supporting a client in integrating their own proprietary trade modelling, pricing and risk analysis into the system.
Where a client chooses to use Kakapo Risk to calculate the risk on part of their portfolio, the results can be exported at all levels including down to the individual risk vector. Kakapo Risk has a framework that allows custom plug-ins to export risk vectors in a client's native format. It is expected that a client will aggregate these vectors with vectors calculated by their incumbent systems to derive their firm-wide risk.
An additional integration option is the integration of a client's risk or pricing engines. In this case, Kakapo Risk will use a client's engine to calculate the raw numbers (while still taking care of the GUI, data marshalling, data versioning, security, re-run and other non-mathematical features). A client taking this path can still opt to export the resultant risk vectors for aggregation with vectors generated by existing legacy systems.
Kakapo handles both simple, standard products and exotic products. Kakapo Risk is strong in both areas but is likely to have an edge over most organisations' incumbent systems when introducing new asset classes or more exotic instruments.
Integrating Using the Supplied Risk Engine
Kakapo Risk can easily be integrated into a customer's existing risk system topology under the assumption that Kakapo Risk will coexist with some already incumbent, legacy risk systems. Kakapo Risk has features to support the simple loading of trade and market data as well as features to allow clients to export and transport data in exactly the format they need to incorporate into the overall risk metrics. In this model, the customer's trade and market data is imported into Kakapo Risk. Risk vectors are then calculated using the full Kakapo Risk features of data repair, re-run control and ad hoc analysis. When appropriate (both manual and automatic initiation are supported) the risk vectors are presented to the incumbent vector aggregation process and thus form part of the properly diversified risk measures.
Integrating Using a Customer's Proprietary or Another Commercial Risk Engine
Kakapo Risk also supports integration of other risk and pricing engines. In this example, a customer not only integrates Kakapo Risk into their existing risk system topology for system inputs and outputs, but also uses Kakapo Risk to harness their existing Risk and Pricing engines. Customers will want to do this when they wish to take advantage of Kakapo Risk's advanced data management, data repair, analysis tools and re-run facilities but at the same time connect these to their own pricing and risk engines.