In 1985, Microsoft introduced the world to Excel and Vodaphone introduced one of the first commercial handheld cell phones – the Motorola 8000X – remember the one Michael Douglas was holding on the beach in the film Wall Street?
Technology has since advanced with warp speed. Our smart phones, powered by decades of advancements in military and space exploration technology, have become routine functional parts of our lives while many in the banking world and other industries are still holding tight to their spreadsheets.
While there’s no doubt Excel has its place in the financial services industry, it begs the question: Why hasn’t the industry and other industries latched onto something more advanced?
We’re in the middle of a data revolution that is producing volumes and volumes of new data every minute of every day that needs to be organized and made useful.
However, most solutions on the market are only good for one segment of data analysis and presentation or another. This has also led to the rise of so-called “Shadow IT” or different groups in different parts of the bank implementing and using solutions not certified by central IT which can lead to fragmented data sets, inconsistent workflows and compliance issues.
- Excel = good for basic calculation but crashes after a certain amt of data
- Tableau = good for data viz but doesn’t provide real time multi-dimensional analysis
- Managed databases (with some in-memory functions) = good for aggregating data and generating reports but no data viz and too slow
Atoti and the Art of Multidimensional Analysis
Banks continue to plug along with myriad Excel spreadsheets – using VBA to run numbers and perform one-dimensional analysis on data that is, generally, by the end of the day no longer reflective of actual financial results.
Atoti is software’s answer to the data revolution. It was built on and improves upon ActiveViam’s decade-and-a-half of technology expertise, expanding the scope of financial services clients and other businesses that may benefit from the technology’s powerful analytics capabilities.
Atoti provides a Java in-memory database and aggregation engine as well as a Python API which makes it easier for data scientists, quants and business analysts to create dashboards to show the results of the back-end analytics platform. Essentially it offers up the ability to corral any universe of data and with a few lines of code, display it clearly, colorfully and quickly. It is also easier for developers to create analytics applications with Atoti.
True to ActiveViam’s roots, Atoti performs multidimensional analysis on fast moving data without losing performance and provides crisp visualization of the results. The in-memory component stores granular-level data and allows the user to access only what they need at a particular time. The multidimensionality comes from hypercubes which hold many dimensions at once (i.e. desk, portfolio, trade, geography) and stand as the foundation for flexible database queries.
As market data or pricing data updates, incremental updates are performed in-memory and only the changes to any one number are recorded. This makes Atoti ideal to flexibly query large volumes of data as they increase and update.
Decomposing Financial Risk
A core use case for any financial institution is to perform the very data-intensive Value-at-Risk (VaR) on portfolios and create and test stressed VaR scenarios to fulfill regulatory obligations.
ActiveViam’s technology is perfect for this kind of use case because it requires so many data points over different time periods.
In the blog “Market risk analytics in python: Interactive rolling VaR”, Anastasia Polykova demonstrates how to create an analytical app in Python backed by an ActiveViam cube that allows a user to decompose VaR metrics across different dimensions (i.e. time, portfolio and risk factors). The ability to explain where your risk is coming from is important now more than ever as volatility continues to whipsaw markets. Explaining risk is not just a regulatory function it’s a necessity that you’d want to do anyway.