A Big Controlling Idea

Here I wrote what a thrilling innovation must have (for UnRisk CM). It assumes that the innovations manages the obligatory rules, conventions, tasks well and apply innovative methodologies and technologies. Conventions often lead to obligatory tasks. Think of risk management in UnRisk…combine valuation and data management, multi-model and method approaches…lead to tasks like instrument construction, market data import, model calibration, model validation…

Only if this works well the system can manage portfolio across scenario analytics, VaR treatment, tail risk analytics…

A Big Controlling Idea

Today, I want to emphasize on the Big Controlling Idea. The incident is a meeting last week that opened an exciting opportunity. Two partners decided to integrate their key technologies to make something new for the financial market (too early to disclose details). The technologies are working very well and have been sold successfully.

What the hell is big controlling idea? Is it just the combination of the two…?

The controlling ideas describe how the innovation meets the desires, objectives, (quantitative) requirements…From the controlling ideas we derive our key messages. If we understand the general what-and-how we can put the big takeaway into a few words.

The controlling idea

  • cannot be longer than a one-sentence statement
  • it must describe the value of the whole innovation 
  • it must be specific enough to explain how the value is made possible.

Careful choosing the most advanced mathematics, mapping every practical detail…we built automated risk analytics solutions that are development systems in one

The controlling idea is big when the value is high in a high confidence interval…

An insightful risk management process is indispensable for a financial market participant. It has many enemies…some hide in the problem (market risk) the others in the operations…"Wealth or death" is the possible outcome.

A system supporting must run scheduled tasks and perform individual valuations, for faster time-to-insight it must run blazingly fast valuation and risk engines, have all practical details implemented and avoid every risk that is not problem-based…and difficult enough it shall be programmable atop...