The Role of Human-Led Advisory in SaaS for Capital Markets

This article explores how SaaS technologies enhance risk management in capital markets, emphasizing the benefits of real-time analytics and human-led advisory for corporate treasurers and investment fund managers, and highlighting the growing adoption of SaaS solutions for optimized financial operations.

Kristin Kelly, CPO, Headshot
Kristin Kelly
Chief Product Officer
Benefits of human-led advisory in SaaS technology providers

In today’s rapidly evolving financial landscape, the imperative to mitigate risk while enhancing operational efficiency has never been more critical. Derivative Path’s recent market insights survey sheds light on an emerging trend that could revolutionize how corporate treasurers and investment fund managers approach risk management: the adoption of Software as a Service (SaaS) technologies.

Human Expertise Meets Advanced Technology

Our study, which garnered responses from 120 senior CFOs, treasurers, and portfolio managers across private equity firms and corporates, indicates a strong desire to blend human expertise with advanced technological solutions. A notable 62% of respondents expressed readiness to switch their technology providers if new ones offered human-led risk advisory services. This underscores a significant trend: while digital solutions are invaluable, the strategic insight that human experts provide remains irreplaceable.

The Priority of Real-Time Analytics and Seamless Integration

The ability to respond to market conditions in real-time is a critical component of effective risk management. Our respondents prioritized real-time analytics that aid in identifying commercial opportunities, refining evaluation models, and optimizing asset allocations. Equally important is the capability of these systems to integrate seamlessly with existing infrastructure, ensuring that enhancements in technology do not disrupt established workflows.

SaaS Solutions: Enhancing Risk Management Capabilities

Exploring new SaaS offerings is on the agenda for nearly 70% of the participants, driven by the need for portfolio optimization tools and access to real-time market data. These tools are not just about managing risk but also about balancing it against potential returns, a critical consideration for portfolio managers and treasurers aiming to maximize performance.

Advancements in Hedge Accounting

With nearly two-thirds of respondents open to new technologies for better hedge accounting, there’s a growing demand for solutions that streamline and enhance financial risk management. Technology use in hedge accounting, including designations such as fair value, net investment, and cash flow, is becoming increasingly sophisticated, reflecting the complex needs of today’s financial professionals.

Automated CVA and DVA Calculations: A Necessity for Modern Finance

The focus on automated CVA (Credit Valuation Adjustment) and DVA (Debt Valuation Adjustment) calculations particularly among PE firms and CFOs, highlights the growing importance of sophisticated risk-adjusted valuation methods. These automated calculations are crucial for providing accurate mark-to-market valuations that incorporate credit risk, a key feature for those managing large portfolios of derivatives which are not cash collateralized.

The Market Demand for Enhanced Derivative Programs

Our survey also revealed a readiness among 66% of respondents to switch to alternative SaaS solutions for better derivative program offerings. This indicates a significant market opportunity for providers who can offer efficient, scalable, and customizable solutions tailored to the specific needs of corporates, CFOs, and PE firms.

Looking Ahead: The Future of SaaS in Capital Markets

As Brett Morrell, Managing Director, Head of Risk Solutions at Derivative Path, articulates, “Risk management is top of mind given the current financial conditions. Technology, especially SaaS, is poised to be a backbone for many firms, enabling the real-time data processing and portfolio monitoring and reporting capabilities required to support comprehensive risk mitigation strategies.”

In conclusion, the integration of SaaS in capital markets is more than just a trend—it is a strategic imperative. For corporate treasurers and investment fund managers, adopting SaaS solutions means not only keeping pace with technological advancements but also ensuring they are equipped to manage and mitigate risks effectively in a dynamic market environment. As we look to the future, the role of SaaS in transforming the capital markets landscape appears both significant and inevitable.

For more detailed insights and to explore how Derivative Path can help you leverage these technologies, visit Derivative Path.

Kristin Kelly, CPO, Headshot
Kristin Kelly

With over two decades of experience across leading New York City-based firms like Allvue Systems and Fidessa Corporation, Kristin has carved a niche in product management, customer relationship management (CRM), and agile methodologies. Holding a BA in Business from New York University, her expertise spans operational efficiency, roadmap development, and incorporating customer feedback into the software development lifecycle. Kristin is celebrated for her collaborative approach with engineering teams, her swift adaptation to new markets, and her dedication to empowering teams to align product goals with overarching business objectives. Her analytical skills, leadership qualities, and deep understanding of equity derivatives are set to drive innovation and cater to the dynamic needs of the finance sector at Derivative Path.


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