The tool is expected to allow HSBC traders to improve the management of their trading portfolios on an intraday basis
The HSBC Technology Center in Pune, India. (Credit: Amitauti/Wikipedia)
UK-based financial services firm HSBC has launched a new tool on Google Cloud for the efficient management of credit risk in its trading portfolio.
The HSBC Risk Advisory tool is developed to allow the bank’s traders and risk managers to run several “what if” scenarios simultaneously and quickly.
HSBC stated that the tool, which uses Google Cloud technology, enables its risk and trading teams to assess capital requirements that are needed to cover potential rating downgrades and default risk of credit products.
The new scenario risk tool is expected to allow HSBC traders to improve the management of their trading portfolios on an intraday basis, as it harnesses the power of cloud computing and delivers results in minutes.
HSBC fixed income and traded risk’s digital strategy global head Ajay Yadav said: “The computing power of Google Cloud makes it much quicker to run complex simulations for many different what-if scenarios, providing a more holistic risk picture of trading for optimum decision-making.
“HSBC’s digital development team built this innovative capability in less than five months in collaboration with Google Cloud.
“The focus now is to take the HSBC Risk Advisory tool and integrate climate risk into it as a proof of concept, which we are aiming to make available in the next few months.”
HSBC’s market risk digital development team is now examining to include the impact of climate risk on the trading book, by building on the new risk tool.
According to the firm, the tool evaluates the susceptibility of trading portfolios to climate change risk, by considering the rating agencies’ ESG scores.
With offices in 64 countries, HSBC held assets worth $2.9 trillion as of 30 June this year.
Google Cloud UKI financial services director Adrian Poole said: “Through our continued partnership, we are bringing the best of our cloud capabilities to help HSBC develop innovative data and analytics solutions in evolving risk areas.
“It’s exciting to see how financial services organisations like HSBC are embracing cloud technologies and building powerful solutions to empower faster and more informed decision-making, including for climate change-related risks.”
Separately, Canadian financial services company Scotiabank has announced a partnership with Google Cloud to provide enhanced personal and predictive banking experience for its customers in the Americas and across the globe.