Zurich Switzerland, June 27, 2017 (GLOBE NEWSWIRE) --
An audience of risk officers, academics and quants in this Swiss wealth management mecca gathered to hear HiddenLevers co-founder Raj Udeshi speak on the importance of risk parity in portfolio stress testing.
Invited by the Swiss Risk Association, Udeshi presented HiddenLevers’ fresh take on risk tech, scenario generation, and portfolio optimization.
“At the heart of our tech is scenario analysis. Just like social media platforms live and breathe on photos, a good risk tech platform must live and breathe on macro scenarios,” said Udeshi. “We make the global economic picture more accessible and relevant than ever before for all stakeholders.”
For compliance and regulatory check-boxes, Udeshi emphasized the HiddenLevers risk platform as a total solution in addition to being a front-office profit center.
“Scenario-based stress testing is the foundation of an agile financial services organization in 2017,” said André Fässler, HiddenLevers business development representative for Europe. “If you’re not doing this then you don’t even know where your business risks are as a company, an asset manager, or as an advisor.”
Introducing HiddenLevers to European banks and insurance companies, Udeshi and Fässler highlighted HiddenLevers’ potential to become the central tool in communicating macro risk exposure to C-level executives and even corporate treasury decision makers.
With FIDLEG and MiFID II requirements firmly in place (the Swiss and EU equivalents of the US Department of Labor’s fiduciary rule), the HiddenLevers toolkit helps all parts of the bank and its clients:
- client-facing advisors explaining alternatives and fees in the context of downside risks mitigated
- investment committee members vetting portfolio managers based on forward-looking events, not just past performance
- compliance officers who need to ensure that client accounts are staying within desired risk parameters
- corporate division decision makers getting a forward-looking tool to model macro risk to their KPIs
Scenarios-as-a-Service
In an era of economic research commoditization, banks face the challenge of articulating relevant economic scenarios in a timely manner, with simple language and the right paradigm to help with operational and client risk.
HiddenLevers concentrates on organizing analyst opinions across the spectrum of economic simulations, and curating macro scenarios on a good-bad-ugly paradigm. This brand of macro risk parity has become imperative to HiddenLevers’ scenario creation methodology, and gives the platform legs even when customers choose to use their own risk models underneath.
“2016 gave us proof that one set of capital markets assumptions is foolish. While big time economists bungled the impact of Brexit and the US Election, the HiddenLevers risk parity paradigm shined by showing alternative outcomes side by side, and the minimal downside of a surprise result,” said Udeshi.
Audience members voted among trending HiddenLevers scenarios to do live portfolio stress testing – Fed Unwinding, Trump Agenda, Rising Interest Rates and De-globalization. Rising rates was the clear audience favorite. The live stress tests were conducted on several sample portfolios, assembled from investment certificates of major Swiss banks, including Vontobel and Julius Baer.
The session took place at Credit Suisse offices in downtown Zurich and was organized by Professor Walter Farkas of the University of Zurich and co-chair, Swiss Risk Association. With $150 billion in assets managed on the platform in the USA and Canada, this marks HiddenLevers’ first foray into Swiss wealth management.
About HiddenLevers
HiddenLevers is a client-facing risk analysis platform helping financial professionals improve client experiences, refine models, and track risk alignment. HiddenLevers technology serves risk-oriented financial advisors, asset managers, and compliance officers. Cloud-based since its inception, the platform features interactive stress testing, risk-forward proposal generation, model optimization, and drift monitoring. HiddenLevers has offices in New York City and Atlanta.