Case Study: Price Analytics
Price Analytics at a Tier 1 Investment Bank client was seen as a “no-go” area due to a distributed and complex IT architecture, with a lack of tractability and the dropping of price information with the data flow from the front office. Pomerol introduced Lavastorm as the ETL tool and managed to quickly re-engineer pricing logic for a number of systems.
- Obtaining Greater Transparency.
- Pricing systems containing disparate data.
- Poor front end reporting regarding pricing plans.
- No analytics for the different buckets of clients that should be priced in a similar way (according to Notional, Trade Count, Currency Pair Types etc.).
- A series of data models were produced to harmonize price structures across the “spot” and “Forward” products.
- Created script to map price plan files against the existing trade set for audit / compliance checking.
- Developed an analytical application to enable optimal client pricing.
- Compliance benefits – business assurance that clients are priced according to agreed parameters.
- Price Optimization – identification of incorrectly priced clients, and the selection of the appropriate price plan according to a number of parameters (size, trade count, notional volume, currency pair activity)
- The client managed to remove business risk by improving audit and compliance.
- Customer relationships – the client managed to correctly and appropriately price clients.