Finastra has moved to streamline annuity risk management, adding automation and real-time analytics to its Fusion Invest software.
The updates include automating the dynamic hedging of annuity contracts, which the company said will improve transparency for risk and compliance teams and streamline operations.
Fusion Invest brings portfolio management functions into one platform and reduces manual data entry and reconciliation.
According to Finastra, this helps annuity carriers cut errors and increase efficiency in monitoring collateral positions, valuations and movements.
The platform also meets derivatives processing regulations, such as Swift ISO 20022, and improves collateral management workflows.
The system automates tasks from trade order creation through to compliance checks and uses real-time market data to model different scenarios.
Finastra said this enables annuity providers to identify opportunities within their product rules, including participation rates, caps and crediting methods.
The technology also supports cloud adoption for annuity carriers and includes multi-underlying indexed-linked derivatives modelling, cross-asset hedging and real-time analytics.
Julie Barthés, VP Product, Treasury and Capital Markets Business Unit at Finastra, said,
“The current economic climate and state of the retirement nest egg has driven life and annuity carriers to develop a wider range of investment options, including registered index-linked annuities (RILAs). Since RILAs are considered both an insurance product as well as a security, carriers must comply with regulations set by both FINRA and the Securities Exchange Commission.
The added complexity makes the right hedging and processing platform essential. This latest innovation in Fusion Invest covers the full scope of the annuity lifecycle, enabling annuity carriers to seamlessly coordinate front, middle and back-office functions, from trade decisioning, hedging and risk monitoring to collateral management, operations and hedge accounting.”
Wissam Khoury, EVP, Treasury and Capital Markets Business Unit at Finastra added,
“Fusion Invest offers enhanced portfolio management business agility that in turn drives significant value by optimizing revenue growth potential and streamlining operational efficiency.
The ability to bring it into this new market speaks volumes about the flexibility and strength of our technology.”
Featured image: Edited by Fintech News Singapore, based on image by thanyakij-12 via Freepik
