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FIS Targets Energy Retailers with XDM

One area of growth for ETRM seems to be where there are competitive retail environments. Smaller, disruptive new entrants into these competitive retail markets might initially start out with Excel for managing their portfolios but quickly realize that they do need an effective and proper trading and risk management tool. FIS have also noted this trend and Ms. Irina Reitgruber told us recently that “we observe more and more small retail/sales-oriented businesses looking for portfolio management solutions. They would like to use their energy data for making better offers to their customers, to utilize the market more effectively and to value their customer deals using risk management techniques, to benchmark their retail business. We need XDM as a solution for these requirements.”

XDM, readers might recall, was the solution from Energeya that FIS acquired in 2015 and which FIS is successfully positioning for smaller energy businesses across the space but particularly in retail where it had its roots as a software product. The software product has been updated by FIS to include the latest technologies, she told us, to provide things like containers to ease implementation, monitoring and scalability, a web portal capability, and stronger security. During 2019, Ms. Reitgruber tells us it will be evolved into an optimal cloud-native platform with support for multi-tenancy and increased horizontal scalability using distributed XDM servers.

“FIS XDM is a front-to-back ETRM with superior graphical displays and sophisticated curve management capabilities. It gives users control over trade capture, valuation, risk analysis, trade lifecycle management and portfolio decomposition for OTC power and gas trades and swap contracts; with market and reference data included,” she told us. In fact, XDM is very much a modular solution or ecosystem of modules with options for functionality like nominations, balancing, compliance, optimization, deeper risk management and back office capabilities. It also includes a set of standard APIs and interfaces for Trayport, EEX and HEREN, IPEX, ECMs.

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Ms. Reitgruber sees FIS XDM as a near perfect solution to the retailers needs offering a rapid and low-cost implementation combined with the flexibility of its modular architecture. Citing a recent UK retail sector win, she said the client gained “immediate value was added to their business after a rapid 2-month implementation. The customer now has a streamlined demand forecast process and holistic view of positions with their trading partners and aggregations of retail sales customer data. They can clearly see their open position and determine which products on the market maybe optimal for hedging based on a selected strategy. This is in addition to  automatically generated settlement data and key position indicators,” for example.

To some extent, FIS XDM has a bit of an advantage in this sector as it was essentially based on an earlier offering targeting the retail side of things when Energeya got started with the software. FIS have made it a key part of its energy strategy as documented above. However, there is a choice in the retail sector with other ETRM solutions like Contigo and others also targeting this space. Despite the competition, FIS has found a niche with the XDM solution where it is hard to beat, and Ms. Reitgruber is very bullish on the product going forward particularly in cloud native form.