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Modelling

The key to a risk system implementation project is being able to reliably move the data into and out of the system. Many clients will already be moving this data within their network, however some will not and may require assistance in coming up with suitable ways to model it. Typically, this would be done using an XML schema. This applies to both trade and market data.

Import and Export Plug-in Development

Kakapo Risk has a sophisticated design that supports the development of data loaders ("import processes") and data extractors ("export processes") that then work seamlessly within the system. These true plug-ins fully integrate into the system, are automatically loaded and can be seen via the user interface. Import plug-ins are used to load trade, market and other data into Kakapo Risk and while these could be Kakapo Risk's standard loaders, many clients will want to augment these processes with their own error-handling and logic. In addition to doing the basic job of loading the data, any specific behaviours can be encoded for the client. The obvious examples are translating the client's import formats, making decisions about handling data errors and communicating with the client's extant job control and system monitoring infrastructure. The plug-ins are built against public APIs (and therefore can be developed entirely by the client) but it is strongly recommended that Kakapo provide assistance at least with development for an initial implementation. Typically these plug-ins are considered the Intellectual Property of the client and the code (suitably documented) is passed over for the client to maintain should they wish.

Similarly to the import processes, it is likely that the client will require export processes to export the risk data for integration with aggregation or reporting systems. As with import processes, export processes are added as plug-ins which are fully integrated into the system, ready for management from the user interface or scripting service. As with import processes, these are written against a public API and a client can do this themselves or have the required plug-ins developed on their behalf by Kakapo.

It is worth noting that plug-in developments are not necessarily long-winded or difficult. Standard imports and exports are likely to be supported by standard built-in processes and require no development. Bespoke client behaviour does require a bespoke plug-in but the API has been designed to make this as simple as possible.

Specific Client Analytics Plug-in Development

Kakapo Risk has a sophisticated architecture for adding and customising analytics. An obvious example is stress testing, where clients may want to provide stress test set scenarios based on their own views of the market in question. Kakapo Risk supports plug-in modules that generate whatever stress scenario the client needs. This support extends to providing generic table creation and amendment tools for the management of stress test configuration data. This data could be anything from the shocks to apply, to rules for grouping various market data objects together as part of the stress generation.

Kakapo would expect to be part of the analysis and development process to help develop any non-standard stress routines. Again, it is conceivable that a client could build these themselves and plug them in but it is strongly recommended that these are developed in conjunction with Kakapo. As with all plug-ins, any Intellectual Property associated with stress techniques would, by default, belong to the client and the plug-in code would be delivered to them.

More complex bespoke analytics plug-ins are also supported that utilise a client's own pricing or risk libraries. Here, Kakapo can work with a client to build an analytics plug-in that calls the client's routines directly (or through any mechanism such as a web service). Again these APIs are intended to be truly public but this level of integration is certain to require Kakapo and the client to work together to ensure performance and reliability issues are all fully worked through in the first instance.

New Products, Market Data and Analyses

Kakapo Risk has an extensible trade model that has been designed to easily incorporate new products. Whilst many products are already supported, new products can be easily added as required and without assistance from Kakapo. Nevertheless, Kakapo welcomes the opportunity to work with clients who wish to add new products. Kakapo's assistance in this regard does automatically take ownership of any Intellectual Property. Some products will require new market data types to be introduced. Again, Kakapo welcomes the opportunity to assist. New market data may well impact analysis (for example generating perturbations for VaR or movements for stress tests) and again, Kakapo is on hand to assist in their introduction.

Installation

Kakapo Risk and any required plug-ins install simply using Microsoft installers. This is unlikely to be beyond the capabilities of most IT departments, but those new to Microsoft's web server (IIS) may desire some assistance in setting up some of the security aspects (noting that Kakapo Risk fully utilises certificates to ensure strong security).

So while installing the base system is trivial, configuring the system takes an understanding of the Kakapo Risk concepts. Kakapo is very keen to guide customers through the process of deciding how they can take the greatest advantage of the many Kakapo Risk features. This will include consideration of what regions are appropriate, how the end-of-day/start-of-day activities should be best driven, setting up reports and report batches, matching calendars with incumbent systems and the like.

Kakapo is happy to provide on-site support for these activities although this is unlikely to be required. While the configuration of the system can be complicated, it is also entirely scriptable and the client can easily apply scripts if they would prefer.

Project Management and Project Reporting

Kakapo knows that most banks have a long history of project management and most now have well disciplined project management offices. Nevertheless, Kakapo is keen to ensure project success and also has strong project management experience inside and outside of banks. Kakapo will stand alongside the bank's project management process and provide assistance as and when required. This may be by opening access to its own project management tools, providing reporting or just participating at project meetings. In any case, Kakapo has a vital and vested interest in the success of the project and can be relied upon to do everything possible to see it to a successful conclusion.