Axioma announced today that Skandinaviska Enskilda Banken AB (SEB), one of the largest financial institutions in northern Europe with more than €180 billion in assets under management, has completed the implementation of Axioma Risk, the innovative multi-asset class risk-management platform launched by Axioma in 2013.
"The collaborative efforts of SEB and Axioma have resulted in a risk-management platform that not only meets SEB's current needs, but has the flexibility and the power to grow and adapt in a constantly evolving risk environment," said Sebastian Ceria, Chief Executive Officer of Axioma. "This implementation of Axioma Risk is the largest and most complex to date, underscoring the growing recognition of this platform as a truly next generation solution for enterprise-wide risk management."
Hans Johnsson, Head of Risk Control - Wealth Management for SEB, said, "We have now put in place one of the most sophisticated risk systems in the world."
Axioma Risk enabled SEB to address one of the most vexing problems facing risk managers: a lack of alignment between the risk-management team and the investment team.
"With Axioma Risk, we now have one common system, with everyone talking about risk using the same numbers and looking at those numbers in the same system," said Rikard Andersson, Asset Class Head - Equities at SEB. "And that has really moved us forward, not only in terms of knowledge, but in terms of cooperation within the organization itself."
Axioma Risk helps meet the needs of both SEB's risk- and investment-management teams by providing multiple ways of looking at risk for multi-asset class portfolios---granular and factor models, stress testing, VaR and sensitivities---in one system sitting atop a consistent data source.
One of SEB's specific requirements was that Axioma be able to model all the assets in SEB's book. Axioma Risk now processes 45 different asset classes ranging from simple listed equities to complex OTC derivative contracts, while also demonstrating its ability to quickly add analytics for new asset types.
The changing regulatory landscape in the wake of the global financial crisis presented additional challenges, as the requirements---and the scope of the requirements---have increased over the years.
"Transparency is very high on our agenda---being able to not only show the risks, but to explain them," added Andersson. "We needed a system that could address these changing requirements."
Axioma Risk was developed over a three-year period by a team assembled by Axioma specifically for the project. The result is a "unified" multi-asset class risk-management platform for middle-to-front office users, providing portfolio managers, risk officers, asset owners and consultants with risk reporting, risk analysis and decision support for multi-asset class portfolios. It is called a "unified" platform because when managers build portfolios, they look at risk in a way that aligns with their specific strategies. In contrast, a risk control officer takes a much broader view that looks at risk in the context of the entire firm. Axioma Risk provides both views on a single unified platform, enabling portfolio managers and risk officers to speak the same language when it comes to risk.
For Axioma and SEB, the work is not over, as SEB sees additional potential for the system. The next step is to further develop the risk measures, to make them more granular and more tailored to SEB's specific needs, a process that is ongoing with Axioma.
SEB has been a client of Axioma since 2010, when it implemented the Axioma Portfolio suite (Axioma Portfolio Optimizer™, Axioma Backtester™, Axioma Portfolio Attribution™ and Axioma Portfolio Analytics™), which is used by portfolio managers to implement investment strategies quickly and accurately.