Ensuring complete coverage of counter parties and risk assessment through forward-looking indicators

The challenges

As a risk-conscious firm, Schroders continuously seeks new tools to ensure its clients’ peace of mind.

“Our clients want to take risks through the investments we make on their behalf like buying equity or placing a derivative trade, but don’t want to compromise on where we place these trades with”, shares Emmanuelle Mathey, Global Head of Credit Risk at Schroders.

Schroders’ task is further complicated by the task to ensure the best possible execution for their clients’ trades. As a result, the asset manager relies on an extensive network of counterparties & vendors for trade execution – from well-renowned investment banks to local broker-dealers from emerging markets.

This diversity raises lots of challenges. In the first case, there is an abundance of information that complicates the process of finding really meaningful insights. Schroder’s team has to face the arduous task of navigating through an informational tsunami of hundreds of media alerts.

On the other hand, dealing with foreign brokers often goes hand-to-hand with informational deficiency as entities might not be listed, rated, and with limited news or data, available only in foreign languages. Furthermore, the due diligence and credit risk analysis of the vendors is considered significantly complicated because the majority of the reports are issued yearly or bi-annually. This means the data is retroactive and a couple of months old at best. This makes it hard to predict and avoid unexpected defaults or identify changes in the creditworthiness and insolvency risk of the entities Schroders conducts business with.

The solution

To overcome these issues, the asset manager relies on Owlin’s platform and its ability to filter relevant topics and gather news from 16 languages, shedding light even on unlisted entities.

By curating a list of forward-looking indicators, Owlin ensures a timely warning system that identifies any potential risks or instabilities in the extensive network of banks and brokers Schroders works with.

That way, Owlin brings Schroders’ risk management team only the things they want and need to see and nothing more.

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