Nasdaq has integrated AI into its Calypso platform to enhance bank and insurance risk calculations, in a move set to process risk calculations up to 100 times faster.
Gil Guillaumey
The offering offers new methodology to conduct investment portfolio risk calculations and produce predictive analytics, based on advanced machine learning. As well as improving execution time, the offering will also reduce costs, said Nasdaq.
Users of Calypso include: banks, insurers, and other global financial institutions looking to process front-to-back office treasury workflows, manage risk, and meet regulatory reporting obligations.
Gil Guillaumey, senior vice president and head of capital markets technology at Nasdaq, said: “All financial institutions trading OTC derivatives are required to perform increasingly complex calculations to meet internal risk controls and regulatory mandates. Maintaining the necessary infrastructure and systems can be outrageously expensive, inefficient, and increasingly impractical regardless of cloud elasticity strategies.”
Nasdaq combines its machine learning technology with a specific form of mathematical modelling – via its XVA Accelerator – which also “significantly” reduces the amount of physical infrastructure required to run the relevant calculations.
With this technology, the Nasdaq Calypso risk analytics suite is able to rapidly adjust during times of heightened volatility and fluctuating interest rates.
Guillaumey added: “The sheer scale of computing power required to meet the most demanding regulations, alongside the strategic benefits of more accurate real-time analytics, is driving a profound rethink about how we can leverage AI to reduce the cost of compliance.”