Following the global financial crisis of 2008, capital markets organizations have faced increasingly stringent regulatory reforms designed to make global markets safer for investors, improve transparency, reduce risk and avoid another financial meltdown. Financial institutions are actively working to enhance and future-proof risk analysis across their business and investment needs.

“The barriers of entry in this business are very high for new compet-itors, favoring a slower pace of innovation from a handful of estab-lished providers. The Microsoft Cloud enabled us to break that apart and disrupt a market that typically requires massive upfront invest-ments and time.”

Fabien Couderc, Head of Enterprise Development, Axioma

Axioma delivers FinTech’s first born-in-the-cloud, multi-asset-class enterprise risk solution

“The Microsoft Cloud gives us infinite capacity to handle these large books spanning all the asset classes large financial institutions hold. Leveraging an evergreen cloud platform gives us agility in our development cycle and ulti-mately improves time to market. As a result, our solutions are able to innovate in sync with our client needs.”

Fabien Couderc, Head of Enter-prise Development, Axioma

Customer Name: AxiomaIndustry: Financial ServicesCountry or Region: United StatesCustomer Website: www.axioma.comEmployee Size: 180

About AxiomaAxioma is the leading provider of innovative risk-management, portfolio-construction, and risk and regulatory reporting solutions that unify front,

middle and back office functions at financial institutions worldwide. With an emphasis on innovation, outstanding service and open-platform technology, Axioma offers clients more choice, greater flexibility, efficiency, and increased performance. Axioma is headquartered in New York, with offices in London, Hong Kong, Frankfurt, Paris, Singapore, Chicago, Atlanta, Geneva, San Francisco, Tokyo and Melbourne. Axioma was included on the Chartis RiskTech100® 2016, a ranking of the world’s most significant risk and compliance technology companies. The Axioma logos and product brands are trademarks/service marks of Axioma, Inc.

With the increased electronification of financial markets, industry constituents need to process an enormous volume of data to support sophisticated trading and risk management decisions. Meanwhile, IT teams are challenged to keep up with the infrastructure scalability, security and agility needed by the business to remain competitive and grow, with reduced investments and resources at hand. This is why asset managers, large brokerage firms, and investment banks are increasingly looking to partner with financial technology providers that can deliver innovative solutions for their mission-critical requirements.

The FinTech challengeBarriers to entry to become a trusted provider to capital markets customers are very high. Equity, fixed income and multi-asset class managers are demanding customers whose business depends on sophisticated and timely risk assessments to make their daily trades. And they work under ever-tightening regulations.

Until recently, the only way to enter this market was via the long road of credibility-building, which, in this context, requires extensive infrastructure built to handle high-power computing and a track record of reliability that requires significant and constant investment. Earning the necessary regulatory certifications is one big piece of the puzzle; guaranteeing delivery of the numbers is another.

It’s no surprise, then, that risk solution providers are typically large and well-

established companies with legacy solutions built over the course of many years to support a specific asset class. Axioma challenged the status quo by delivering a modern, born-in-the-cloud, multi-asset-class enterprise risk management solution that is secure and reliable and provides global hyper-scale capabilities powered by the Microsoft Azure cloud.

Capitalizing on the opportunityFounded in 1998, Axioma has always focused on the use of innovative technology to bring new solutions to its financial services clients. Early on, the company packaged equity risk models with portfolio optimization software and quickly began building a client roster of large and sophisticated asset managers. Despite the obstacles it faced entering a new, highly regulated market, Axioma soon became a recognized name among providers largely because its data infrastructure was built on technology that could update the models daily, something its competitors could not do.

Today, most large capital markets customers have massive portfolios with a vast number of positions, and the data available for analysis is growing from terabytes to petabytes. Because many risk analytics providers have finite modeling capacity, they face the growing challenge of storing and handling market data and analyses results and the increasing expense of scaling up infrastructure to

run the necessary computations. These shortcomings have left the customers unable to cater to the huge demand from their risk and quant teams for sophisticated and compute-intensive methodologies to manage risk.

Leveraging the Microsoft Cloud as its risk computation engine enables Axioma to offer an elastic enterprise-wide risk management system across asset classes, reduces its dependency on large on-premises datacenters and huge development and operations teams, and gives the company the ability to innovate in analytics without infrastructure capacity constraints. “Azure has enabled us to offer a robust and credible solution for our customers,” says Fabien Couderc, Head of Enterprise Development at Axioma.

Harnessing cloud elasticity to deliver disruptive innovationRisk modeling for the capital markets industry requires on-demand hyper-scale computing power. On the Azure platform, Axioma can auto-scale to thousands of cores during peak processing periods when it receives and analyzes portfolio data, and it can deliver trade risk analyses to clients before the opening bell. Axioma can guarantee delivery of analyses because of the reliability of Azure.

Axioma auto-scales down to reduce cost during nonpeak hours and then scales up for end-of-week and end-of-month regulatory reporting requirements.

“Azure gives us infinite capacity to handle large books that span all the asset classes,” says Couderc. “Leveraging an evergreen cloud platform gives us agility in our development cycle and ultimately improves time to market. As a result, our solutions are always in sync with our clients’ needs.”

Delivering value to world-class customersAxioma is actively delivering its new Axioma Risk™ services to leading financial institutions around the world like HedgeMark, an indirect, wholly owned subsidiary of The Bank of New York Mellon Corporation, which provides hedge fund-dedicated managed account and risk analytics services through its subsidiaries. Using Azure’s scalability and flexibility, Axioma Risk™ allows HedgeMark to process reports substantially earlier in the morning and to compute more analytics on a broader array of assets. HedgeMark uses Axioma Risk on over 35,000 securities every night and 250,000 securities for month-end reporting. The platform is set up to calculate over 1,000 distinct statistics including hundreds of scenario and stress tests across five different global market simulation sets.

HedgeMark’s Chief Executive Officer Andrew Lapkin says, “As our clients increasingly look for customization options for their hedge fund investments, it’s critical that we employ flexible technology that can accommodate the layer of complexity this adds to

“As our clients increasingly look for customization options for their hedge fund investments, it’s critical that we employ flexible technology that can accommodate the layer of complexity this adds to managing risk. Axioma’s modular cloud-based platform was clearly the best solution to help Hedge-Mark deliver detailed risk analysis on global, multi-asset class portfo-lios for our clients.”

Andrew Lapkin, Chief Executive Officer, HedgeMark

managing risk. Axioma’s modular cloud-based platform was clearly the best solution to help HedgeMark deliver detailed risk analysis on global, multi-asset-class portfolios for our clients.”

A winning formulaTaking full advantage of the value of the Azure platform, the Axioma team can now focus on the analytics and client services that are growing its business. Couderc says, “Having the Microsoft Cloud as our platform backbone enables us to focus on intellectual property like our analytics and risk models and, ultimately, on how we help our clients.”

Despite entering as a new provider, Axioma is now among the big names in a highly competitive risk analytics marketplace. “The barriers of entry in this business are very high for new competitors, favoring a slower pace of innovation from a handful of established providers,” says Couderc. “The Microsoft cloud enabled us to break that apart and disrupt a market that typically requires massive upfront investments and time.”

Software• Microsoft Azure - Azure PaaS, Azure App Service - Azure IaaS, Virtual Machines - Azure SQL Database - Azure Blob Storage

- Azure Queues - Azure Service Bus - Azure Table Storage• Microsoft SQL Server 2014• Microsoft Windows Server 2012 R2

This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, INTHIS SUMMARY. Document published May 2016.