After validation of the Service Level Agreement (including the description of interfaces, data extraction times, the validation of controls, etc.), the first step consists in analyzing the product portfolio.
This analysis is done in close collaboration with the customer to be in line with the expectations and internal processes. At this stage, the most appropriate mathematical models are determined.
Step two is the "running mode". All products are implemented and valued at defined regular time frames. In the meantime, the products, the process and the prices are fully documented and ready to be audited.
During this process, final pay-offs and results are analyzed and challenged with Finalyse Valuation Service expertise and knowledge of new market techniques. If determined with the client during the first step, Finalyse Valuation Service can price a given contract with multiple models, being able to compare different valuation methodologies.
The result is a reporting containing all the essential data being sent to the customer according to the desired format and frequency.
In order to perform this service FINALYSE goes through the following stages:
Market data gathering and validation
- Integrated Service - Finalyse Valuation Service provides all the necessary raw, cleansed and pre-processed market data from feeds provided by the most accurate market data providers. As a result, users do not have to obtain, build and maintain large databases of such data.
- Flexible and Adaptable Data Feed - If customers prefer using their own data sources for the valuation, Finalyse Valuation Service can integrate it very easily thanks to a flexible and adaptable customer data feed interface.
- Market Data Quality Check - Once market data from the different providers is uploaded, Finalyse Valuation Service performs a data quality check. Prioritization rules are implemented to choose between alternative sources. Interpolation and extrapolation methodologies are applied for missing data. Additionally consistency tests are performed to assess the need to find substitute market data.
Pricing of various instruments
- Customer's Tailored Specific Needs - During the whole process, Close interaction, proximity and full transparency guarantee that customers' needs are fully met. This ensures the determination of the most appropriate mathematical models for the instruments to be valued.
- Easy to Use Pricing System - Thanks to our broad instrument coverage and the ease of use of our valuation engine, the creation of new models and structures is rapid. This makes it possible to react quickly to innovation in the financial market. Finalyse Valuation Service can price a given contract with multiple models, making it possible to compare different valuation methodologies.
- Open Pricing System Architecture - The Finalyse Valuation Service pricing system offers several methods for linking product definitions with in-house or third-party valuation libraries.
- Accurate and Realistic Pay-Offs - Final pay-offs are cross-checked based on the 4 eyes principle and challenged with our consultancy expertise which brings depth of knowledge to the assessment of valuation results. Our services are used by a number of major institutions, providing a high level of support.
Reconciliation with the prices given by counterparties
- Challenging Counterparties - Prices from counterparties are analyzed and compared on an ongoing basis in order to prevent and resolve pricing differences.
- Gap Analysis - When differences with counterparty's prices arise, Finalyse Valuation Service's team of financial experts with hands-on experience in quantitative analysis, executes several controls with the aim of explaining them fully.
- Acceptance Test - In order to keep pay-off reliability, Finalyse Valuation Service has established a strict gap acceptance policy within the service level agreement in line with the market and customer practice.
- "4-Eye Principle" Application - As with modelling and counterparty price reconciliation, a 4-eye principle is executed in order to guarantee price accuracy using automated and manual cross checks.
Reporting of prices and reconciliation
- Granular Reporting - Finalyse Valuation Service provides reports containing all the essential information required by the customer according to the desired content, format and frequency.
- Customized Reporting - Finalyse Valuation Service reporting is flexible enough to accommodate the reporting style that suits your organization, for both internal analysis and external use.
- Integration with Risk Management Systems - Easy integration with reports in PDF or downloaded CSV files for easy integration for downstream processing or distribution by e-mail.
- Full Position History and Audit Trail - An audit trail is available for each product including monthly reports and gap analysis reports.