ETRM: An Outlook of its Applications
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ETRM: An Outlook of its Applications

By Capital Markets CIO Outlook | Friday, November 30, 2018

Europe has seen continuous growth in energy and risk management (ETRM) and has begun to address the adoption of automation technologies. The 1990s gave birth to the Brady ETRM in connection with the Northern European markets - the time when firms like Sinergetica and Energeya had a great market share from southern Europe. Various technology offerings such as SaaS, cloud services, real-time data usage, and complex sensitivity analysis have strengthened the traders, and their trust in ETRM is continuously improving. According to Market Research Engine, the market is expected to increase about 3.5 percent between 2015 and 2020.

Allegro, developed in the U.S. since 1984, is one of the best ETRM platforms in the market which provides risk management solutions to organizations with large commodities and energy management. Horizon is the most recent software product company which provides solutions for oil, gas and power traders. Horizon manages the front office as well as the back office and ensures flexibility in the accounting department of an organization.

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OpenLink, another software platform in the ETRM space, deals with both financial as well as physical operations. OpenLink’s MTM detailed summaries reduce the complexities and risks of the traders. The risks in discount factors, history, P&L shifts, and FX rates are the areas this platform aims to address. Eka Software Solutions deals with the billing function which manages all the transactions from the front office to the back office. It also concentrates on the regulatory and compliance facet. It reduces complexities in pricing formulas, enhances product quality, and organizes structured transactions.

Brady’s ETRM software makes providing data to industry veterans much easier by using market standards and conventions. While making use of MTM, traders are able to generate their own pricing formulae with the help of some methods such as volatility, free forward curves, and index formulae. FIS, another risk and regulatory management company, focuses on reducing risks which come in relation to the traditional energy products as well as renewable energy products. FIS provides a broad platform to both of the two energy products to reduce risks and do compliance management. The organization’s Aligne reports deal with the Dodd-Frank Act and other European requirements. Like some of the other software providers, it controls energy risk management from the front office to back office. Such software applications will indeed become an asset for the organizations in the landscape, and it’s high time businesses begin to take advantage of their solutions.

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