SECTOR FOCUS - ENERGY & COMMODITIES
Risk moves at market speed.
Your process should too.
When your business is in energy or commodities, you are as global as you are local—and you are never not on. We deliver intelligent risk processing that keeps pace with you, around the clock and around the world.
The market
What the market demands of your team
Whether you are hedging physical risk with financials or targeting an active return, time is of the essence. If your risk numbers are not up to the minute, you are flying blindly into market volatility. Our digital teams are built to close that gap, giving you current, trusted metrics no matter when and where you need them.
Timeliness
Your risk numbers must be ready when you get to your desk, regardless of your time zone.
Our approach: A digital team that delivers on that requirement, on schedule, every time.
Speed
You have no use for expired metrics. You need to act as the market moves, and your risk numbers must keep up.
Our approach: Our digital teams optimize your risk processes to run continuously so you always know where you stand.
Reliability
Exceptions and disruptions are costly. You must be able to get and trust your risk numbers.
Our approach: The digital team monitors and manages your risk processing so it runs smoothly, even when you aren't looking.
Completeness and Detail
There should not be a trade off between the big picture and the crucial detail. You must have both.
Our approach: A digital team that handles any book structure and deal type, company-wide and at the single trade and price level.
digital teams
Risk Blueprints for Energy and Commodities
Every risk process our digital teams run starts with a Risk Blueprints are the instructions for the tasks and the order in which the digital teams must do them to complete end-to-end risk processes..
Our digital teams already have blueprints for the following essential risk processes:
- Measuring VaR & Expected Shortfall. That includes parametric, historical, Monte Carlo, and GAN methodologies
- Testing Historical & Hypothetical Scenarios for forward-looking loss estimation and expected credit loss compliance
- Conducting Synthetic Trade Analysis to test strategies through isolated or portfolio-integrated risk measures
- Performance & Limit Monitoring for continuous breach detection and automated recommendations
Under the Hood
VOR Risk Intelligence Suite
Our digital teams and Risk Blueprints work on whatever platform your institution runs today. They also integrate with FRG’s VOR Risk Intelligence Suite, which gives energy and commodities businesses a single platform for the full range of risk measurement. VOR Market Risk sits at the core, from standard sensitivities to advanced simulation, with the flexibility to handle proprietary valuation functions alongside standard ones.
Core Metrics
VaR & Expected Shortfall
Value-at-risk, expected shortfall, and all meaningful breakdowns and drivers, across methodologies ranging from parametric and historical simulation to Monte Carlo and the advanced General Adversarial Network (GAN) approach. Proprietary and custom valuation functions coexist with standard ones, all in one place.
Stress Testing
Historical & Hypothetical Scenarios
See what historical market stresses would mean for your portfolio if they happened today. Ask the platform to construct hypothetical scenarios and run them for you, giving you a forward-looking view of risk exposure before the market moves.
Strategy Testing
Synthetic Trades
Test your strategies by adding synthetic trades to your current portfolio or measuring their isolated risk. Especially powerful when combined with market scenarios,so you can explore the full risk landscape of any trade before you put it on.
Monitoring
Performance Tracking
FRG monitors and manages your risk platform, and the platform already does much of the tracking and correcting itself. Metric and limit breaches as well as model drifts surface when they happen, not at scheduled reviews. The platform deploys its own next-step recommendations, upon your approval.
Powered by FRG's metadata-driven AI layer. See how the Digital Teams work.
FAQ
Frequently Asked Questions
Can I ask the digital team for ad-hoc analysis?
Yes, a very common way for a digital team to work is as an assistant on top of a central data foundation where the highest-grade input and output data is accumulated. That gives you the ability to prompt the digital team for any kind of custom analysis, and have it delivered in the format and channel you prefer it. It can even leverage external data elements if so permitted.
Can functions, models, and methodologies be shared across our organization?
Yes, since the digital teams efficiently can leverage many different applications and systems, it is best practice to externalise and consolidate function libraries for enterprise-wide access.
How do digital teams make sure users only see data they're permitted to access, such as VaR or limits for another desk?
Digital teams are only in control of blueprints, i.e. risk processes. The control of everything else, including permissions, approval requirements, audit settings and data security models firmly resides with your administrators and cannot be circumvented or overridden by digital teams.
What if we add a line of business?
New lines of business can be added at any point with no disruption or necessary expansion of the digital teams.