CubeLogic Winter 2022 Newsletter
Winter Newsletter 2022
Thoughts from Lee Campbell, CEO
As 2022 draws to a close it’s interesting to reflect on what has been a dramatic and turbulent year across the board. The energy markets in Europe have seen incredible volatility and immense supply side challenges. This in turn highlights the need for sophisticated and timely risk management. Likewise, this volatility and massive increase in spot trading volumes also underlines the need for automated solutions for compliance. We see ourselves uniquely placed to assist companies as they navigate this new normal. Whilst operational challenges slowed down client activity in the early part of this year, we do now see an increase in business and great activity across our client base. This bodes well for 2023 and we enter the new year with an extremely positive outlook.
CubeLogic has continued to grow to meet this increased demand, both in terms of new and complimentary product offerings and also in terms of people and processes to support all our clients. We have seen headcount increases in all areas and in 2023 we will be further increasing and improving our capabilities to support our clients. 2022 has seen our new Swansea office fully staff up, with more European based time-zone support and further development capabilities in this new team. I am very excited to note that we have also moved into a new much larger office space as our London HQ, giving us a more permanent base.
At the executive level I now have a strong leadership group in place to enable us to continue to grow and scale over the coming years. The final piece of this growth transition will see me move up to the role of Executive Chairman from January, with Tom Edwards taking up the CEO role for me. This is a natural evolution and reflects the reality of our roles over the last six months, as I focus on corporate development and strategic growth, with Tom driving day to day operations and execution of our strategy. Tom and I will continue to work diligently for all our clients as we continue to grow the company to new heights in 2023 and beyond.
Finally I would like to take this opportunity to thank our ever-loyal client base for their continued support and I wish everyone all the best in the coming year.
New Clients and Successful Projects
2022 has seen the Professional Services team undertake sixty projects across thirty-six different clients. These have been the usual mix of new implementations, upgrades and change activities across Credit, Trade Surveillance and Market Risk. To support this growth, the Professional Services team has increased in size with new hires across all regions.
The second half of 2022 has seen our first implementation of version 9 of RiskCubed. This was delivered using the streamlined CreditExpress approach. This approach delivers core credit functionality within a shortened timeframe. Q3-2022 also saw the first implementation of CubeCalcVR, CubeLogic’s real-time cloud native parametric VAR (value at risk) engine. Alongside these two projects, we have undertaken a further ten new implementations.
Another major theme has been the continued upgrade activity. This has seen a significant number of Credit clients move to v8.x in the early part of the year, with later upgrades to our more recent v9.x release. Alongside this we have migrated several Trade Surveillance clients to our v8.x version.
Looking ahead, 2023 committed work and pipeline shows continued grow in activity for the Professional Services team. This not only includes new clients but also several existing clients expanding their uptake of the CubeLogic product suite.
CubeWatchTS – Advisory Services
After successfully providing market-leading compliance monitoring solutions to our energy and commodity trading clients over the years, we see a growing need for regulatory compliance business advisory support in addition to our product-orientated professional services offering.
We have recently launched a complimentary regulatory compliance advisory service to help our clients navigate a complex and evolving regulatory compliance environment, particularly in the context of heightened regulatory enforcement risk. This service is led by Shane Henley, who has over 17 years of experience in energy and commodity markets, much of which focussing on market regulation and compliance. Shane previously led the Energy and Commodity Regulatory advisory practices at EY in London and later at Baringa Partners, a highly-rated management consultancy in the energy sector. Shane brings a wealth of knowledge around European financial and energy market regulations including REMIT, EMIR, MAR and MiFID II and their practical implementation from a compliance perspective.
New office in London
As part of our continuing growth, on 1 December CubeLogic London moved to a new office at 1-3 Silex Street, London SE1 0DW.
This is close to our previous South Bank office and a short walk from stations at Waterloo, Southwark and Borough. Located in a former printing works, the space includes a variety of areas for us to work and collaborate. We look forward to welcoming our clients, partners and colleagues to our new London home.
Credit Risk: V9.1 release
September 28th saw another step forward for CubeLogic with the official release of version 9.1. Continuing with key concepts and initiatives from the v9.0 delivery, v9.1 has allowed us to take further steps in building out key modules and functionality.
Our latest module, the Data Transformation Engine, has been further enhanced from the v9.0 release and provides a rich user interface that allows the user to specify and view multiple rules to update transactional data before loading. We have also introduced a scheduling component that allows users to specify run times and a precedence for how the rules will be executed.
Margining enhancements have been released that allow the user to create and specify email templates when sending margin calls. This provides the user greater flexibility in defining different contexts to the margining mails that are published.
We have made several technical enhancements to the Credit Cube that allow the user to segregate data by business lines and restrict access to users in both viewing group level exposures as well as the drilldown capabilities. We have also introduced the ability to process new data by source system as opposed to a full data re-process.
In November CubeLogic launched a real-time cloud native parametric VAR (value at risk) engine to help energy and commodities trading firms to quantify, visualize and control their market exposure across the entire portfolio.
This new product is part of CubeLogic’s ongoing innovation in creating new solutions to help global energy trading companies and financial institutions to transform their risk management operations into modern digital experiences.
In addition to cutting-edge VAR analytics, RiskCubed carries out other computationally complex calculations related to credit, market, and compliance risks. With increasingly turbulent markets, more firms are finding themselves in situations where they need to have better ways to value and analyze the market risk in their energy and commodities trading book quickly and accurately, so they have a clearer picture of their vulnerabilities in a volatile and uncertain environment.
CubeWatchTS: v8.0, GUI uplift and EPEX ISV
Further to our summer announcement regarding the release of v8.0 of CubeWatchTS and the introduction of a new modern, browser-based user interface, we have also introduced a number of new features.
These include new pattern detection logic (including pre-hedging, front-running and block trade monitoring) and the capability to separately calibrate spot and forward markets – a major challenge for firms attempting to monitor highly volatile power and gas markets. In addition, a number of improvements were made to engine performance and data mapping for EPEXSpot, Europe’s main short-term power exchange.
Looking ahead to 2023, we are planning the roll out of many new features, capabilities and improvements to our user interface. We are also increasing our direct connectivity to more exchanges and venues following our investment in a dedicated interface team based in Swansea UK. With the ongoing exceptional market conditions we expect 2023 to be a busy year from a regulatory enforcement perspective.
Industry Events – CubeLogic participation
CubeLogic was proud to sponsor the ETRC event in London on 28 & 29 September. ETRC remains the premier gathering for European energy market compliance professionals and, as always, was well attended by compliance professionals from many energy trading organisations and energy and financial market regulators.
Unsurprisingly the main themes this year related to the impact of the European energy crisis on energy prices and the ramifications for compliance functions and regulators alike. Effective surveillance was a recurring topic, as were the challenges of performing effective surveillance on complex European power and gas markets. Russian sanctions were also extensively discussed, clearly a major concern for large and small firms alike. We were delighted to see the large turnout and the opportunity to catch-up in person once again with many industry friends and acquaintances.
Chartis Research: We continue to impress the research analysts at Chartis! CubeLogic moved up 23 places to #75 in the flagship RiskTech100 rankings for 2023.
This reflects the market’s growing appreciation of the strengths of the RiskCubed platform across Credit, Compliance and Market Risk. We are also delighted with our “Best of Breed” placement in the Chartis Quadrant reports for Commodity Trading Risk Management and Banking Analytics Solutions. The latter award recognises our unique ability to combine features such as limits, exposures and collateral, with sophisticated workflow and third party data and analytics.
CubeLogic thanks all the clients who took their time to make all our client engagement events a success. Your support and positive spirit have helped make our time together productive and informative.
• Winter social event – The event held at Colonel Saab, a location filled with Indian heritage, was an eventful day with all the positive interactions from our clients.
• Webinars – With a good turnout for the v9.1 Webinar, we are looking forward to organizing more informative sessions to keep all our clients up to date with our products.
• Virtual user group – The next user group will be taking place on the 22nd and 23rd of February 2023.I Invitations for this will be sent out in January and we are looking forward to meeting you all there.
• Customer satisfaction survey – Client feedback is a key input to our plans and we make sure to address all concerns to continuously improve.