A couple of weeks ago, we had a briefing from Kiodex. Now part of the FIS family of products, Kiodex is a Software as a Service solution for commodity risk and compliance management. Though Kiodex has been around for some time, and is one of the original cloud-delivered products on the market (even being SSEA-18 audited), it is often thought of as a financial commodity solution only. However, given its continuing development, Kiodex now covers both physical and financial, as well as FX and IR, transactions – and it is fully integrated with market and reference data capabilities to value commodity portfolios and exposures. It had been sometime since we had had a briefing from Kiodex, and so we had some catching up to do.
The first thing we learned was that the solution now has comprehensive physical commodity coverage with significant physical metals and ags capabilities. Physical metals were added to the solution three years ago and ags two years ago, but Kiodex has added more physical ags functionality this year along with enhanced workflow, two-way SAP integration and a number of other new capabilities. Kiodex is now being used to manage physical and financial positions as well as plan and report hedge strategies and offers other capabilities such as monitoring exchange and CFTC position limits in real time (it includes span margining), calculate initial and variation margins in real-time as well as analyze risk and exposures.
These additions have brought Kiodex solid sales success with 14 new clients in the last 12- months, according to Brian Quinn. He added that though Kiodex’s customers have historically been in the banking, E&P and utility spaces, 6 of the recent wins were in Food & Beverage, including 2 of the Top 20 globally in that industry segment. As indicated by these wins, with the product’s recently developed capabilities, Kiodex is well-positioned in the Manufacturing and Food & Beverage space as a cloud-delivered, physical/financial ASP product. With coverage of supply chain processes – including procurement down to the sku-level, it can address some degree of traceability support as well, we were told.
Kiodex has done well over the years (founded in 2000) by focusing on various niches in the energy and commodity arena, particularly with banks and hedge funds. It is currently squarely focused on manufacturers and food & beverage players with commodity exposure and seems to be doing well in that space while still making sales into its other markets such as banking and commodity funds etc.. Of course, as a SaaS trading and risk solution, it is also very relevant offering to a large swath of the entire commodity industry. It does face increased competition these days as the other legacy SaaS CTRM vendors, like ION’s Aspect, also broaden their commodity and functional coverage…as well as fending off a number of relatively young new entrants, like Houston-based Molecule and InstaNext, that continue to emerge and fight for a share of the market.
However, with FIS behind it and as part of a set of commodity trading and risk-focused software products, we expect the company to continue to find success. Indeed, Mr. Quinn shared with us the forward development plans and these will continue to add more complex functionality to support physical commodities. We will watch Kiodex’s progress with interest.