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J.P. Morgan's Investment Bank Technology "Innovation in Banking Technology" awards
from The Banker.
The Innovation in Banking Award Winner: JPMorgan
Project: Event Workstation
The longevity of derivatives trades presents several operational challenges, not the least
of which is the process of capturing and processing all events related to that trade. During
the lifetime of a derivative trade a series of events will arise, all of which must be
detected in an accurate and timely manner, processed within short time frames and, in
many cases, formally reported to a variety of different parties.
As a logical extension of its real-time risk management processes, JPMorgan built and
deployed a new system, dubbed the Event Workstation, in order to capture the full event
lifecycle of a derivative trade across its entire range of equity derivative products.
Combining a broad range of technologies, JPMorgan built and deployed the Event
Workstation in less than 12 months. The new platform features real-time event detection,
the easy integration of new products and the control-workflow required to minimize
business risk and meet all regulatory requirements.
Business Benefits:
The event detection service has allowed the Equities Business to increase their coverage
of products that are eligible for event detection. The previous event processing system
was hindered by performance issues getting data to the pricing engines and event
processing routines and could only run once an hour.
The Event Workstation client has allowed the Users to organize their events to their own
tailored work flows through intelligent grouping of Events and allowing complex queries.
Using new search queries complex queries spanning date ranges and multiple trading
desks were reduced from 20 minute relational database queries to sub 5 second using
GemFire.
For data management, the Global Equity Derivatives Event Service focused on the
challenge of detecting and managing events in the lifecycle of equity derivative
products. These events can range from simple resets and early exercise opportunities all
the way to "knock-in" or "knock-out" barriers that may cancel the entire contract. The
project successfully built and deployed a unique solution that combines real-time event
detection, the easy integration of new products developed by the business in response to
customers' needs, and the control workflow required to minimize business risk and meet
regulatory and client reporting requirements.
Innovation in Design & Business functionality:
Sourcing Events directly from the prime record of the transaction is a critical pillar of
consistency for risk management capability. We have added a wide array of Event
detection to the quantitative library in order to guarantee consistency, as well as leverage
the existing processes & deployment mechanisms that allow for quick integration of new
products.
Using new technologies (GemFire) to support that process has enabled its usage on an
industrial scale, avoiding database contention and allowing access to parallelized
computing. Both these issues were constraining our capability, limiting our barrier
detection to an hourly process, and forcing us to use tactical applications to satisfy our
regulatory obligations.
We have now achieved a 20x performance increase (from hourly to sub-3mn scans) on
this new scalable platform, and are now able to decommission previous tactical
applications, cutting support costs and improving the overall process.
Business Recognition:
"This system completes our all-round product life-cycle management & STP processing
for all our derivatives positions. This is, in my experience of the street, a uniquely
complete & innovative offering that helps us to increase our efficiency, significantly
reduce operational & trading risk, and deliver added client value & service."
Global Head of the Equity Derivatives Group
"I am particularly pleased with the business & technology partnership demonstrated over
this project, the fortnightly demonstrations & objective settings have allowed us to
deliver a fantastic final product within strict cost & time limits.
Global Equity Derivatives Infrastructure Strategy
"The system's ability to capture market data and associated events in real-time allows risk
managers to be immediately notified of those positions where an intra-day event has
occurred and react to dramatic changes in their derivative risk exposure"
Manager Single Stock Exotics Middle Office
"The ability to monitor and confirm real time barrier events from a single source,
streamlining the process across the business and enabling the Exchange notification to be
sent within a few minutes of detection has given us the advantage to not only comply
with the obligations set by the various exchanges, but to be a leading participant in real
time event notifications and improve our client notifications & relationships."
Issuance and Marketing Middle Office