Good Morning,
This month, we have attempted to put together a Monthly Focus that would be somewhat entertaining!
We hope you enjoy reading this edition, and invite you to share your feedback or even some myths that may come to your mind about LexiFi.
1. “LexiFi is a tool for European markets only”
Based in Paris, Europe has naturally been LexiFi’s first market. However, today our product coverage is cross assets and global. Whether you are based in Europe, the US or Asia, LexiFi Apropos is a suitable tool for you.
2. “LexiFi is only about pricing”
50% of our clients use LexiFi pricers actively, the second half focuses on other functionalities. Our clients include investment banks, private banks, brokerage firms, asset management firms and even financial technology companies! They use LexiFi as a product repository, an advanced reporting system, a lifecycle management tool, a document generation tool, or a software stack. Naturally, LexiFi is also used for pricing and structuring!
3. “LexiFi’s pricers are so fast, they must be shooting in the dark”
LexiFi’s pricing engine computes prices in record time. This is possible thanks to our unique software architecture and our experts in the quant and IT departments who are in a constant quest to combine accuracy, robustness and speed. The software includes tools that display pricing details which are easy to read and conveniently exportable for additional post-treatments. For a quick overview on our quantitative tools check out our previous newsletter.
4. “I have simple needs, LexiFi has too many functionalities”
Based on our experience, clients tend to underestimate the functionalities they need; either because it is not obvious or because their very needs tend to evolve over time. Let us give you some examples and true stories:
- A client who just wants to price products may think that there is no need for a lifecycle tool; however, lifecycle management is required in order to automatically and safely price a product from its issue date until maturity, without having to manually update the pricing script.
- A client who needs to generate KIDs may think that pricing or lifecycle management tools are unnecessary; yet, generating the KIDs requires inputs from these functionalities.
- A client bought LexiFi as a product repository. A few years later the company’s internal compliance department required to produce a regular report with portfolios’ risk metrics. LexiFi already computes such metrics, saving the client from spending resources on a new software, internal development and dedicated hardware.
- Another client bought LexiFi as a Lifecycle tool. After a while, the regulator asked to produce stress test reports. Luckily, LexiFi already provides these functionalities!
We have many other examples, of clients who expanded the use of LexiFi software to other activities. More than a simple addition of modules, we see the value of LexiFi’s software in the native integration between all the functionalities. Having the Quantitative, Reporting, Lifecycle and Document modules working hand in hand, allows to efficiently handle a great deal of business, compliance and regulatory requirements. Slicing down the offering in modules does not seem like a good response to the market specificities. Not to mention the difficulties of integration between independent systems, each one providing a different piece of the puzzle.
5. “LexiFi is doing bespoke or highly structured financial products only”
LexiFi software allows for managing the diversity of OTC derivatives and structured products from the simplest to the most complex. The underlying technology supports nearly all types of non-perpetual and bilateral financial products.
6. “LexiFi cannot adapt to our specific workflow”
Most LexiFi features are customizable thanks to our template language! For example, with the expressive power of this driving language, LexiFi may:
- generate advanced custom reports that trigger notifications
- aggregate data coming from various sources (product database, market data providers, external positions linked),
- define specific workflow for task sequences, automation, validation levels, user constraints, etc.
- extract information from past and future lifecycle of products (e.g. paid and upcoming coupons, barriers breached or about to be breached, etc.)
- trigger advanced quantitative computation (pricing, value at risk, Greeks, risk scenarios, etc.)
- interact with the users through custom interfaces by specifying action buttons and advanced input forms
- generate email notification
- customize interactive pages such as product capture screens
- and much more…
7. “The reporting tool in LexiFi is good, but kind of static”
The reality is that LexiFi’s reporting tools include fully customizable dynamic tables with different options such as the ability to:
- construct aggregated metrics using a broad range of built-in fields
- create dynamic reports or ‘views’ meeting in-house specifications or regulatory standards
- generate reports on a per-contract, per-trade, per-book and per-party basis
- trigger price or risk computations directly from a view
- implement alerts and custom notifications ranging from simple conditional formatting to email sending with custom body and attachments
Reports are exportable to Excel, PDF and HTML files. Once satisfied, users can automate the creation of documents containing these reports!
8. “LexiFi is exclusively an R&D company”
LexiFi invests 30% of its profit in R&D. However, our research is driven by both our clients’ day-to-day business challenges and capital markets’ dynamics.
9. “LexiFi is not for me: I do not want to deal with all these contract combinators and LexiFi algebra”
LexiFi is well-known for its algebra as Jean-Marc, the founder of LexiFi suggested the first formalized algebra for describing financial-contract payoffs. Some people think that they would need to code products in algebraic terms using contract combinators.
The reality is: you would never get to see LexiFi algebra if you do not want to. And there is a pretty low probability that your products could not be defined in LexiFi’s interfaces given the long list of instrument types we have available.
Even in this case, the software offers a few generic instruments such as the DIY allowing you to “Do It Yourself” by defining your product with custom periods, events and/or Excel-like formulas. If the product in question is frequently traded by your company, it might even be possible to ask our technical team to define a new entry-screen or extend an existing one.
LexiFi’s template language is another option before getting to the algebra. Power users, who were trained to use our template language, are able to define ad hoc products from scratch.
LexiFi clients who bought Instrument Box (LexiFi’s technology as a software component) have historically been the only ones to learn and code in LexiFi algebra. Nevertheless, this option is available to all clients.