Storing all that transactional information for traders and portfolio strategists -- in huge databases built by IBM Corp., Oracle Corp. or Sybase -- isn’t a problem. But those systems can’t respond quickly enough to the on-the-fly queries that traders depend on to make split-second decisions. The solution lies in real-time analytics, a technology that is coming of age with a fast new generation of computer processors -- just in time to meet increasing data-crunching demands from the likes of portfolio traders and hedge fund managers.
Fidelity Capital Markets, for one, recently juiced up its quantitative models with Kdb/tick, a product from Palo Alto, Californiabased Kx Systems that “helps us more efficiently trade the easier orders while allowing our traders to focus on the orders where their judgment can add the most value,” says Craig Messinger, president of the Fidelity Investments unit.
Kx pioneered real-time analytics ten years ago, when it was co-founded by CEO Janet Lustgarten, a former Price Waterhouse consultant, and CTO Arthur Whitney, who had built trading systems for Morgan Stanley & Co. and UBS. In 1997 Kx commercially released its Kdb database; Kdb/tick came out in 2001. Now supplying institutional trading units of Credit Suisse First Boston, Lehman Brothers and other major firms, Kx competes against TimesTen, a 1996 spin-off of Hewlett-Packard Laboratories; and VhaYu Technologies, which launched an initiative to market to financial institutions after closing a $6.5 million financing led by Menlo Ventures in June.
In June Kx announced its Kdb+ for Intel Corp. Itanium 2 type 64-bit processors. Compared with the old 32-bit version, boasts CTO Whitney, “We are extending a firm’s ability to acquire, manage and analyze data by a factor of 100.”
Right-siding the balance sheet To brokers and other personal financial managers, the asset side of clients’ balance sheets is where the money is. Adrian Nazari wants to wake them up to liabilities.
Nazari, chairman and CEO of Campbell, Californiabased FinancialCircuit, has developed an automated liability management tool called MoneyFind. He has sold the product to 60 financial advisory firms since its May launch and is negotiating to license it to several major brokerages and insurers.
“Advisers don’t know how to make money on liabilities like they do on assets,” says Nazari. MoneyFind shows them how, using a questionnaire to assess clients’ ability to reduce their debt loads. The software delivers several optional plans to monetize liabilities, often through refinancings. The savings can go toward regular expenses or even, perhaps, back to the asset side -- into such things as annuities or 401(k) plans.
Nazari, 39, a former head of marketing at e-business infrastructure company Sav-vion, has applied for a patent on Money-Find, which unlike standard planning products has an online platform for matching borrowers with lenders. “We get real-time competitive data from hundreds of financial institutions rather than a select few,” says one user, Donald Driftmier, senior partner of accounting firm Vavrinek, Trine, Day & Co. in Rancho Cucamonga, California.
David Schehr, a financial services analyst with Stamford, Connecticutbased consulting firm GartnerG2, says MoneyFind addresses “an unexploited market. The question is, how well will it do as rates rise and demand for refinancings falls?” -- J.K.
