White Papers Risk as a Service – The Next Thing in Affordable C | Page 4

Risk as a Service - The Next Thing in affordable Corporate Risk Management?
A ComTechAdvisory Whitepaper
FROM SPECIALIZED RISK MANAGEMENT
SOFTWARE TO RISK AS A SERVICE
In the broader market for software, skills and processes, the software as a service model
has begun to catch on as it provides a business a way to gain all three but on the basis of a
service level agreement and for a periodic fee as opposed to an upfront sunk cost and ongoing
operational expenses. With the advent of the cloud, the ability to offer cost effective software
as a service has become a reality. Indeed, in the energy side of commodities, it is now quite
common to outsource certain areas of the business, like scheduling and dispatch to outside
vendors who provide the service under an SLA. In other industries, the model has already gained
a wide degree of acceptance and the trend looks set to continue. So why not risk as a service?
Risk as a Service makes sense as an option for
commodity firms because of three key reasons,
1. Risk sophistication is no longer just for the larger,
more sophisticated players but, as pointed out
above, a necessity for all operating in these risky
markets with increasing regulatory and stakeholder
oversight,
2. Reducing costs and optimizing business processes is
a major objective of almost all firms who increasingly
look to digitalization, cloud and outsourcing as
means to reduce costs and to increase agility and
effectiveness,
3. The service model has become much more broadly
accepted as a reliable and cost-effective model
across all businesses. A variety of deployment
modes and service level agreements can range
from classical on premises installation via cloud and
managed service with individual arrangements.
Larger commodity firms with multiple E/CTRMs
deployed for different commodities or geographies,
face an even greater issue in terms of being able to
see risk exposures at the enterprise level. Indeed, the
problem is even larger for entities that trade multiple
asset classes including commodities such as FX and
debt, for example. For many commodity firms, but
particularly larger firms with more complex operations,
risk software that is capable of quickly aggregating
positions and providing KPI’s on a timely basis is
extremely important.
© Commodity Technology Advisory LLC, 2020, All Rights Reserved.
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