Customer facing risk ratio
Provided is a customer facing risk ratio for trading desks that deal primarily in derivatives in order to determine conformance with government regulations as it relates to financial entities. The customer facing risk ratio is a metric that measures customer facing risk exposure for trading desks of the financial entity. The metric may be utilized to determine conformance to various regulations as it relates to derivative transactions. The customer facing risk ratio may be utilized to measure the proportion of customer facing risk exposure compared to the total risk exposure for each trading desk of a financial entity.
1. A computing system configured to determine a customer-facing risk ratio, comprising:
a processor coupled to a memory that stores instructions that when executed by the processor cause the processor to:
configure a risk factor manager that determines a risk driver for a financial desk, wherein the risk driver is based on a type of transaction engaged by the financial desk;
configure a risk ratio manager that determines a ratio of transactions processed by the financial desk based on the risk driver and a comparison between customer-facing transactions and non-customer-facing transactions;
configure a rules component that compares the ratio of transactions with a threshold level to determine whether the financial desk is customer-facing or non-customer-facing; and
configure a notification component that, responsive to the rules component determining that the financial desk is non-customer-facing, provides output data to an additional computing device, wherein the output data performs one or more of:
i. configuring a dashboard that displays a line chart representing the ratio of transactions,
ii. providing an alert describing the financial desk, or
iii. modifying subsequent transaction engagement by the financial desk,
wherein the risk factor manager, the risk ratio manager, the rules component, and the notification component are implemented within the computing system configured to determine the customer-facing risk ratio.
2. The computing system of claim 1 , wherein a first line of the line chart represents a Customer Facing Trade Ratio (CFTR) value and a second line of the line chart represents a Customer Facing Risk Ratio (CFRR) value.
3. The computing system of claim 2 , wherein the instructions further cause the dashboard to display the CFTR and the CFRR in thirty, sixty, or ninety day increments.
4. The computing system of claim 2 , wherein the instructions further cause the dashboard to display the CFTR and the CFRR in configurable time periods.
5. The computing system of claim 1 , wherein the instructions further:
configure the dashboard to generate an additional representation based on trade count or notional value; and
configure the dashboard to display the additional representation aligned with the representation of the ratio of transactions.
6. The computing system of claim 5 , wherein the trade count represents a number of trades with customers as compared to another number of trades with non-customers.
7. The computing system of claim 5 , wherein the notional value represents a dollar amount of customer-facing trades as compared to another dollar amount of non-customer-facing trades.
8. The computing system of claim 5 , wherein the trade count or the notional value comprise a customer-facing trade ratio.
9. The computing system of claim 1 , wherein the instructions further cause the risk ratio manager to determine the ratio of transactions based on inter-desk transactions as a portion of the customer-facing transactions.
10. The computing system of claim 9 , wherein the instructions further configure the risk ratio manager to identify the inter-desk transactions based on a counterparty on a trade being attributed to a valid inventory in an inventory master.
11. The computing system of claim 1 , wherein the instructions further configure the risk ratio manager to determine the ratio of transactions is above an additional threshold level; and
configure a machine learning and reasoning component that schedules a next period for review of the financial desk.
12. The computing system of claim 1 , wherein the instructions further configure the risk ratio manager to determine the ratio of transactions is below an additional threshold level; and
configure the dashboard to display an additional alert regarding the ratio of transactions.
13. A method, comprising:
executing, on a processor coupled to a memory, instructions that cause the processor to perform operations comprising:
configuring a risk factor manager that determines a risk driver for a financial desk, wherein the risk driver is based on a type of transaction engaged by the financial desk;
configuring a risk ratio manager that determines a ratio of transactions processed by the financial desk based on the risk driver and a comparison between customer-facing transactions and non-customer-facing transactions;
configuring a rules component that compares the ratio of transactions with a threshold level to determine whether the financial desk is customer-facing or non-customer-facing; and
configuring a notification component that, responsive to the rules component determining that the financial desk is non-customer-facing, provides output data to an additional computing device, wherein the output data performs one or more of:
i. configuring a dashboard that displays a line chart representing the ratio of transactions,
ii. providing an alert describing the financial desk, or
iii. modifying subsequent transaction engagement by the financial desk,
wherein the risk factor manager, the risk ratio manager, the rules component, and the notification component are implemented within a computing system that includes the processor and the memory and is configured to perform the method.
14. The method of claim 13 , wherein a first line of the line chart represents a Customer Facing Trade Ratio (CFTR) value and a second line of the line chart represents a Customer Facing Risk Ratio (CFRR) value.
15. The method of claim 14 , wherein the instructions further cause the processor to perform operations comprising: configuring the dashboard to display the CFTR and the CFRR in thirty, sixty, or ninety day increments.
16. The method of claim 14 , wherein the instructions further cause the processor to perform operations comprising: configuring the dashboard to display the CFTR and the CFRR in configurable time periods.
17. The method of claim 13 , wherein determining the ratio of transactions comprises including inter-desk transactions in the customer-facing transactions.
18. The method of claim 17 , the operations further comprising configuring the risk ratio manager to identify the inter-desk transactions based on a counterparty on a trade being attributed to a valid inventory in an inventory master.
19. The method of claim 13 , wherein determining the ratio of transactions comprises including, in the customer-facing transactions, inter-affiliate transactions that are not inter-desk transactions.
20. The method of claim 13 , the operations further comprising configuring the dashboard to overlay the representation of the ratio of transactions on an additional representation of a customer-facing trade ratio based on similar time ranges.