Trésorier/Treasurer magazine - N°93 - Apr/May/Jun 2016 - (Page 50)

15 MINUTES WITH... FinMetrics - Could you present your company? FinMetrics is a Swiss company, established in 1998 by three PhDs in finance from the University of Lausanne, specializing in valuation and risk management for a range of financial métiers: private banking, fund management, funds of hedge funds, insurance companies, global corporate treasuries, and family offices. Our specificity lingers on the combination of financial expertise and the capability to implement it into a financial dashboard to accompany our clients in their day-to-day activities. LE MAGAZINE DU TRESORIER / TREASURER MAGAZINE - N°93 - APR / MAY / JUNE 2016 - Why did you decide at that time to launch FinMetrics? 50 There was really a boom in risk management during the second half of the 90s. Still, most of it was risk monitoring rather than management. For banks, Basel II was in discussion and at that time was expected in 1999, not 2004. For corporates, International Accounting Standards were developing towards fair valuation and hedge accounting. But still, most of the efforts were for (static) reporting reasons and risk management was perceived as a control or a limitation to the activity. We were convinced that there were two kinds of needs: (1) accompany financial managers in an environment that was becoming more complex, and (2) foster real risk management, i.e. integrating risk as a managerial component of the activity of profit centers and not just see it as a cost center. We started providing expertise to very specific and complex cases, ranging from the Swiss Federal Treasury and its hedging policy, the valuation of complex stock option plans of private entities, the asset allocation of an insurance company, proposing a better automated monitoring of Lombard credit for private banks,... Soon, our advisory was divided into two types: (1) specific expert cases, and (2) cases relating to the day-to-day activity of a métier. For the first, we develop our own tools. For the second, our clients were more and more interested in our capacity to implement our advisory into a tool to facilitate their work and demystify the challenges ahead. FinMetrics Hugues Pirotte about some sort of frontCofounding partner end with gauges and the like, and most of the time, it is a data management Hugues Pirotte is one of the cofountool with nice visuals. ders of FinMetrics in 1998. Hugues has In our case, we started a PhD in Finance with a thesis in Credit from the métiers we were Risk for which he received a prize from covering. We directly La Suisse Assurances in 2000. Hugues understood that providing also continued his academic activity, Lego tools with formulas first as a professor at HEC Lausanne and and building blocks was then moving to Brussels at the Solvay not our real added value. Business School, of the Université Libre Soon, many firms would de Bruxelles (ULB), where he teaches be providing financial Corporate Finance, Derivatives and Risk libraries and anyhow, Management and Governance. He is a regulators would start member of the BEL20 Committee and has asking to "see under the founded the Finance Club of Brussels. hood" and standards He is also in charge of the finance module would emerge making of the Swiss Federal Certification for pure valuation more and Accounting Experts. more a commodity. What was needed is an integration of these functions into the real workflow(s) of each métier. For example, a front officer will receive an alert about the lack of credit availability for a client and, instead of triggering a liquidation procedure harmful to the commercial relationship, she will be proposed alternative allocations by the application to advise her client while respecting the agreed strategic asset allocation. The resulting profile and projections against the various layers of allocation can then be shown on a tablet and drill-down into the individual positions from the ALM view of the client. This and many other workflows are proposed in the context of corporate treasuries for hedge accounting designation and effectiveness monitoring, valuation of collateral, gathering and projections of cash flows, FX hedging policy monitoring, counterparty credit risk, EMIR reconciliations, ... FinMetrics - And thus what did you develop? Well, at the beginning, we rapidly noted that spreadsheets were everywhere, even more with the new regulatory requirements that were coming ahead, that were of course not implemented yet in the main (back-office or mid-office) systems. Thus, we developed a spreadsheet add-in. But soon, the volumetry, the required flexibility to adapt it to any client and the willingness to come up with a very ergonomic and user-friendly interface pushed us to create a standalone application capable to (1) interface to any data source(s), (2) allow the user to work with data, calculations and reports supremely easily, and (3) provide a real financial cockpit. FinBoard was born. When we talk about a cockpit or dashboard today, we tend to immediately think - What is lying ahead? Today, institutions bear a huge operational risk because of the thousands of spreadsheets that have been developed by skilled users who, positively, wanted to be responsive. What is needed is a system that can be the chain link between the main system(s) and the spreadsheet, by automating the workflow whilst allowing the user to continue using easily the results in the spreadsheet later on. It has to be light, agile and responsive. But it provides a secure environment for monitoring and reporting, frequently first prototyped in a spreadsheet.

Table of Contents for the Digital Edition of Trésorier/Treasurer magazine - N°93 - Apr/May/Jun 2016

Cover
Table of contents
EDITORIAL
FINANCIAL HIGHLIGHTS Luxembourg Tax News
INTERVIEW David Blair - How should we set up an efficient KYC Process?
FOCUS
IFRS 9: Hedging - Treasurers will love it
From 17 to 16 reLEASE of the new LEASE accounting standard
Block chain - Is this buzz word turning into a reality?
Bank Single Gateway, the Plumbing of Bank Connectivity
FORUM
Geopolitical threats for the year ahead
Treasurers proceed with caution
Des difficultés en série pour les nouveaux entrants
Easing the Burden - Is a global KYC standard needed?
European trade repository of the year
La dette senior Européenne, un regard nouveau sur l'obligataire
CORPORATE FINANCE
Stay connected with cloud treasury technology
From stone age to straight through processing
Differentiators for treasury management systems
Complete securities financing solutions for corporates
A full and balanced "meal" for your retirement?
15 MINUTES WITH FinMetrics
THE FINANCIAL RISK OBSERVATORY
NEWS
LIFE BEYOND NUMBERS

Trésorier/Treasurer magazine - N°93 - Apr/May/Jun 2016