Case Study: Treasury Corporation of Victoria (TCV)

The Razor™ Risk Management Platform provides an end-to-end risk management, control and reporting solution for many organisations from financial services to corporate treasury markets operations. The platform was originally developed to assist financial institutions with the integration of market and counterparty risks in their trading books. This later expanded to include credit and liquidity risk as well as regulatory calculations as required under the Basel framework.

The platform is a feature rich and versatile solution for any organisations risk management needs.

The Treasury Corporation of Victoria (TCV) has been using the Razor Treasury Risk module since 2007, to monitor market risk and report on the performance of all trading positions and investment portfolios. TCV is the central financing authority for the State of Victoria, Australia acting as the interface between the state and the wholesale financial markets and providing tailored loans and financing, deposits, advisory and investment services to the state and state-related entities. Their loans are funded by the issue of government-guaranteed bonds in the domestic and international financial markets and by deposits received from public authorities.

The Razor™ Risk Management Platform has become pivotal to the day-to-day operations at TCV and is predominately used by the General Manager Risk and Performance Measurement and his market risk team. The key features used include exposure calculations (Value at Risk), stress testing, scenario analysis and what-if analytics. A good example of how the platform helps is in scenario analysis, which has been configured to run automatically, allowing the team to set specific datapoints to shock a scenario curve as a % or absolute value and monitor the impact. The team analyses the data from within the Razor™ Risk Management Platform and can report results immediately or export the data to external BI tools to combine with their own internal datasets.

Razor worked closely with TCV during the first quarter of 2022 to upgrade the platform to the latest version. The upgrade delivered several key functional and performance improvements with portfolio updates being processed now 100+ times faster, the ability to run multiple requests in parallel for intraday updates, pre-deal checks and what-if scenarios, to name just a few. Additionally, the platform has been optimised to handle much larger workloads, more complex business rules as well as to provide more advanced logging and auditing, all of which help deliver significant time-saving benefits to the teams using the platform on a daily basis. The upgrade has been well received by TCV who were extremely satisfied with the on-time, on budget outcomes. This was made possible by RRT working hand-in-hand with TCV IT and Business User teams following a proven implementation approach, project managed by expert and experienced practitioners.

Why did TCV decide to upgrade the Razor Risk platform rather than look at alternate platforms?
According to Mike Van De Graaf, General Manager Risk & Performance Measurement at TCV, “Razor has been deployed for a number of years at TCV and is now seamlessly integrated with core systems and business analytics. The platform is robust and stable and well supported by the Razor team who work collaboratively with the teams at TCV. Razor provides an effective solution that automates the fundamentals of risk measurement and management, providing “live” and holistic views, all from one single platform. “

Why is Razor important to TCV from a CRO’s perspective?
Mr Van De Graaf continues: “The importance of having a robust Risk Management framework will only continue to grow in the coming years. The benefit of a vendor-based solution, such as Razor, is that it provides a controlled platform to deliver the complex (and evolving) reporting and regulatory requirements. TCV’s regulatory reporting significantly benefit from leveraging the Razor market risk features, since TCV’s financial performance can be impacted through counterparty movements or changing market conditions”.

What do you hope to achieve in the next 1-3 years with Razor?
“We are looking at upcoming Regulatory drivers such as the Fundamental Review of the Trading Book (FRTB) and Liquidity Risk and how Razor solves for this, with its flexible features focussing on what makes sense for TCV to utilise. There is also an increasing emergence of Environmental, Social and Governance (ESG) and its impact on profitability and risk. In general, there are economic challenges across the globe and there may be new or updated risk models we want to introduce into the platform. Some of these can be configured by the team at TCV and some will require the assistance of the Razor Risk team. The Razor Roadmap and evolution to the cloud is also on our radar since this is important from a technology perspective”.

“We look forward to continuing to work collaboratively with the RRT and the Razor Platform in delivering solutions in the future” says Mr Van De Graaf.

Cristina Has, Chief Product Officer at Razor, comments: “We are pleased to see our roadmaps support our customers’ needs both from a functional and a technology evolution perspective. We are committed to continuously improving Razor’s capabilities and to supporting our clients, our partners, with flexibility and expertise, as we have for years. As a technology company, we are continuously looking to make use of the latest innovations in cloud, integration and modularity as well as artificial intelligence, to support our clients in their risk management and measurement challenges while keeping total cost of ownership under control.”