Private Banking

Distribution of Structured Products

LexiFi has developed an integrated solution for the distribution of structured investment products. LexiFi addresses the needs of private bankers who cannot rely solely on market counterparties to obtain quantitative information about structured products and need to streamline a variety of time-consuming and error-prone pre-sale and after-sale processes related to complex investment products.

LexiFi provides independent valuation and structuring capabilities, rationalizes the production of marketing documents and customer reports, and automates the maintenance of exotic portfolios. Unlike general-purpose pricing tool vendors, LexiFi has assembled a complete solution based on a robust IT architecture and tailored to the needs of private bankers who source, market, sell, and process structured products.

Business Benefits

Better products offerings.  LexiFi brings independent analytical capabilities that increase price transparency, facilitate the development of new ideas, improve the skills, comfort level and advisory capacity of both product specialists and customer-facing personnel, and reduce the risks of misrepresentation and negative publicity with fact-based sales practices.

Increased productivity.  LexiFi frees up human resources and limits errors by automating complex processes such as the production of marketing documents and customer reports or the maintenance of exotic portfolios.

9 Reasons to Use LexiFi in Private Banking

	Product Catalog
	Create a central catalog of structured product and derivative solutions that relationship officers may offer to clients. The right product mix can help customers benefit from the highs and lows of the capital markets. The results are improved client service and higher margins. Product characteristics may be discussed with clients and progressively fine-tuned to converge towards an optimal solution: users specify contract terms and conditions in graphical trade entry screens and access a range of valuation, simulation, and event planning capabilities that help to understand and communicate the economics of candidate transactions. Product Definition Define products in graphical trade entry screens and analyze the risks and rewards of proposed deals. Click image to enlarge.
	Independent Valuation with Industry-Standard Models
	Value complex products and perform pre-trade risk analyses with Monte-Carlo and PDE implementations of industry-standard valuation models delivered with related calibration algorithms. In addition, automated portfolio valuation capabilities help to monitor client holdings and to provide ongoing advice. Contract Variations Change an arbitrary combination of contract parameter values and quantify the impact on price. Click image to enlarge.
	Historical and Forward-Looking Simulation
	Simulate the execution of a contract through time for a given market scenario, either historical or forward-looking, and analyze the contract's cash flows and performance. Historical scenarios reflect the past evolution of a contract's underlyings and are used to quantify the performance of the product as if it had been acquired in the past. Hypothetical, forward-looking scenarios may reflect the customer's view, the bank's view, or a consensus forecast. The simulated execution of a contract provides an intuitive understanding of the candidate transaction and, ultimately, helps to validate an investment idea. Simulation of Down-and-In Autocallable Note For each simulated acquisition date, contract and scenario, the LexiFi solution calculates cash flows and summary metrics such as the annual yield or the effective life of the contract, and provides a detailed audit of the contract's execution. Click image to enlarge. The LexiFi solution also handles the simulation of products with discretionary options. Simulation of Multicallable Corridor Note The simulation tool inspects all potential contract execution paths and returns a result (i.e., cash flows, summary metrics, audit trail) for every call and non-call possibility. Click image to enlarge.
	Marketing Documents
	Rapidly assemble informative and consistent marketing documents that consolidate product definition, simulation, pricing, and event planning information. The LexiFi solution ensures the consistency among all data elements. The production of marketing documents may be scheduled and automated. Marketing Documents Create informative marketing documents and term sheets with Microsoft Excel. Himalaya Analysis Click image to enlarge. Corridor Analysis Click image to enlarge.
	Portfolio Maintenance
	Automate the maintenance of structured product portfolios: systematically detect and process events such as payments, fixings, option exercises and barrier crossings in a portfolio of complex products, keep a full history of events, perform the required simplifications as a contract progresses in its life cycle, and visualize future events.
	Client Reporting
	Create tailored client reports that summarize structured product activity and holdings. Information about contract terms and conditions, life cycle events, and portfolio or trade-level metrics can be inserted into broader reports. The LexiFi solution helps adapt reporting to client needs, a key service differentiator in private banking. Tailored Client Reports Monitor the execution of structured products and insert a summary of salient life cycle events in client reports. Click image to enlarge.
	Market Data
	Import market data snapshots (required for pricing) and historical time series (required for backtests, the estimation of certain valuation model inputs, and portfolio maintenance) from Microsoft Excel documents, text files, SQL databases, or in-house services.
	Asset Allocation
	Produce all inputs required to include structured products in an asset allocation framework.
	A Real System, Not a Spreadsheet Add-In
	LexiFi provides much more than a spreadsheet add-in: the LexiFi solution is powered by the Modeling Language for Finance (MLFi), a precise, award-winning formalism developed by LexiFi for exhaustively describing financial contracts. Transactions are stored in a SQL database and may be queried in a multi-user environment. The LexiFi solution integrates with a number of technologies and standards, including C#, C++, C, Java, and XML.