February 11, 2011
FINCAD, BNY Mellon partner for derivative analytics
BNY Mellon subsidiary Eagle Investment Systems has become the latest financial services company to offer derivative pricing analytics to its global clients via a partnership with Surrey, BC-based FINCAD. Eagle will incorporate FINCAD Analytics into its investment management suite, which is used by clients for managing complex investments. Eagle joins the 70 partners who embed FINCAD’s products into their own client offering.
President, CEO and Director Robert Park co-founded FINCAD in 1990 with the aim of developing derivative pricing analytics for corporate treasurers. “We were in the investment industry and we discovered that very few people outside the banks knew about derivatives,” he says. “Corporate treasurers were sent fax sheets with information on SWAPS, but they didn’t have the knowledge or tools to understand and evaluate the derivatives they were being offered. Our mission was to level the playing field by providing the buy-side with the expertise they needed.”
Over the past 15 years, 4,000 organizations in 80 countries have licensed software from FINCAD, Park says.
At its software development centre in Surrey, FINCAD employs a team of 15 international quantitative researchers with PhDs in subjects such as mathematics and physics.
The latest offering from FINCAD is Fair Value Insight, delivered over the web as Software as a Service (SaaS) and used for pricing foreign exchange derivatives, OTC derivatives and fixed income securities. Clients enter portfolios into the system and obtain valuations on demand or on schedule via emails. Valuations are based on data from London, UK-based inter-broker dealer ICAP.
The web-based service is in addition to FINCAD’s longer-established classic product, FINCAD Analytics Suite, a programme written in C++ and C, which includes a large number of calculation routines for analyzing derivatives. Last year, FINCAD launched F3 (FINCAD Financial Framework) which uses modular object oriented technology for the pricing of derivatives.
FINCAD clients include commercial and investment banks, asset managers, hedge funds, insurance companies and government agencies such as Federal Reserve Banks and the Bank of Canada. “A significant part of our revenue comes from corporate treasurers,” Park says. “Now our clients use our tools to keep up with changing regulation.”
The several hundred corporations using FINCAD include Microsoft, IBM, Dell, Wal-Mart and MacDonald’s. Park says 40% of FINCAD’s clients are based in North America, 30% in EMEA. The company has a client centre in Dublin, Ireland.
FINCAD has existing partner in Japan and a partnership with Indian software and services company Infosys. Park sees great growth potential for FINCAD in south Asia and the Far East. In Canada, he sees growth opportunity with resource companies.