Brady and CRisk – an Update
Last September, Brady Technologies announced that it had acquired CRisk, a credit and Liquidity risk solution provider. It subsequently followed up that acquisition with another one that involved it buying ETRM vendor, Igloo. Last week, I took a briefing from the Brady risk team along with a demonstration of some of the CRisk software, as a follow up to my analyst inquiries regarding these acquisitions.
Brady had acquired Energy Credit way back in 2016 and subsequently went on to market and sell the solution successfully while enhancing aspects of that platform. However, Energy Credit was an older solution with a long track record of success and a host of premier customers. Now in 2021, Brady faced a choice of whether to invest in a complete overhaul of Energy Credit or to acquire something that was already on a modern technology platform. With some history of working with CRisk dating back to 2014, Brady decided upon the latter. “The CRisk solution ticked all of our boxes covering all of the current Brady Credit functionality and more but in a modern technology and architecture,” said Ian Tobin of Brady. CRisk is not only a fully functional credit risk solution, it also offers a liquidity module that is very attractive to customers in today’s market, he told me.
The CRisk solution is an integrated solution comprising of several modules with functionality delivered via a web browser and utilizing all Microsoft technology. The UI looks intuitive combining intelligent text-driven screens and strong graphics to aid users in interrogating the system. Importantly these days, it is also real-time updating key risk metrics as information is entered or changes. It has also been designed to integrate seamlessly into the surrounding application environment with links to other ETRM, CTRM, and accounting packages. This means that under the right circumstances, much of the data is entered via the system of record once and yet is consumed and used by the credit and liquidity risk solution. Users who lack an ETRM can instead enter data from Excel or directly into the solution. “You can push or pull data into the solution and consolidate all transactions and other required information,” said Ali Celik of Brady.
The functionality is quite solid and given my days running operations at a European power trader where I was particularly concerned with credit and liquidity, I was impressed with its overall completeness. It handles credit scoring allowing users to easily set up their own credit scoring approach as well as utilize third-party credit scores (or both), it calculates exposures and other analytics like PFE, MtM, and so on providing easy to interrogate screens and reports for the credit analyst, and it supports all credit instruments and their set up and management, including CSA agreements and all their associated calculations. It comes complete with a lot of very useful reports and can work with a variety of reporting tools. Workflow and complete audit trailing mean the system can be set up to ensure proper four eye checking and approval and to maximize productivity. It handles all of the usual scenarios easily along with a host of other ‘niggles’ that often occur when dealing with credit from hierarchies of counterparties through to specific netting details and even setting up Chinese walls between different entities in a trading group. CRisk has also developed a host of other modules for things like counterparty assessment, bilateral compression, clearing, DMA arrangements, Invoicing and more that can all be seamlessly added to the solution. It also offers the useful ability to perform what if analysis and stress testing.
As Ian Tobin stated, CRisk checks pretty much all the boxes and sets up Brady with a very competitive and modern credit and liquidity risk solution that it has brought to market as a part of its overall solution set much faster than it could have by rebuilding the Energy Credit solution. It has also added several new customers (The CRisk Installed base) and an office in Copenhagen. The integration program is said to be going well as well. Finally, CRisk pride themselves of customer satisfaction and aim to ensure that they maintain this brand attribute under the Brady umbrella. CRisk looks like a good addition to the Brady set of products.
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