FNG Exclusive Interview… Jeff Wilkins, Managing Director of IS Risk Analytics (ISRA), part of the ISAM Capital Markets Group, talks to FX News Group about the firm’s significant growth in 2021 and ambitions for 2022.
FNG: Hi Jeff. Hard to believe we’re already well into 2022. How has IS Risk Analytics’ business evolved over the last year?
Jeff: ISRA’s business has evolved in a number of ways. We have expanded the risk products we offer, evolved our bridging technology and have introduced an MT5 white label offering to complement our MT4 suite. We have also made major investments into our infrastructure in both New York and London data centers, with a major focus on scale and security.
FNG: What have been your key successes? Where has your growth come from?
Jeff: We surpassed $1.8 trillion in monthly notional risk volumes and will soon celebrate hitting the $2 trillion mark. Our growth is attributed to the quality of our team. The service we provide our brokers is unparalleled in our industry and the vantage point we have over the industry is incredibly valuable to our broker clients.
Our client base at ISRA consists of brokers of all sizes across a wide range of geographic regions. Though many see different types of flow from one another, over the last year we have seen growth from brokers looking to smooth out P&L during times of low volatility. We have helped them create a more consistent revenue stream that gives the client better indications of future revenue to budget the rest of their business.
FNG: What do you think the key trends will be for 2022 in terms of risk management?
Jeff: Volatility in 2021 was low and exposed flaws in many brokers risk models. The 2022 focus for risk management desks is the revamping of risk models to monetize flow in any environment. We still see further consolidation in our industry, which means a pickup in M&A deals. For brokers to achieve the highest multiple, they absolutely must achieve a consistent revenue profile. We are helping brokers achieve this goal, but it is still an educational process with some of the smaller to medium sized players.
FNG: If there is one lesson to be learned for the year ahead, what should that be?
Jeff: The biggest lesson learned for brokers over the last year is that you simply cannot close your eyes and hope for the best when it comes to running risk. A reduction in volatility will expose a bad risk manager very quickly. Brokers are starting to learn the components of their trading income, and once markups, swaps and commissions were stripped out, the remaining risk revenue in 2021 was not great and highly volatile. This makes running a business very tough because revenue is unpredictable month to month. I believe that if many brokers rewound back to the beginning of 2021 and ran a more sophisticated risk model, they could have achieved enhanced results with much less stress.
FNG: What is the focus for ISRA in 2022?
Jeff: Coming off a year of strong growth, ISRA will be attacking 2022 with aggressive product and geographic expansion. Our core focus on risk management will remain the same and we look forward to hitting the ground running in 2022. We are targeting a minimum of 30% growth year on year. We will be releasing some key announcements over the next couple months and look forward to the continued acceleration of our growth strategy in 2022.
For more information about IS Risk Analytics, please contact us.