Silicon Graphics Inc., a Mountain View, Calif.-based provider of high- performance computing systems, has come out with a set of hardware and software tools designed to improve banks' risk management using three- dimensional graphics.
The tools, collectively called Silicon Exchange, combine third-party programs and risk management software with Silicon Graphics' multimedia desktop systems, data base servers, and advanced software tools.
Silicon Exchange builds upon Silicon Graphics' experience in interactive three-dimensional graphics and digital multimedia technologies used in manufacturing, scientific, and entertainment markets.
Just as these technologies enable a structural engineer, for example, to see a design flaw in a product model, a financial engineer can identify market irregularities by using graphics that represent massive amounts of numerical data, officials said. Using these tools, risk managers can display multiple market positions and capital risks.
They can also integrate a variety of third-party software applications, such as data mining tools that allow users to discern patterns and use the information to market services and develop products.
Nearly 100 third-party software providers offer products that work with the Silicon Exchange.
Such sophisticated tools are needed in the financial services market because of the complexity of derivative instruments and global risk management systems, said Kirk Lovenor, vice president and general manager in the market solutions division.
Displaying information graphically makes it easier to describe and understand compared to the limited view offered by numerical tables, said Jim McCrory, Silicon Graphics manager for financial services marketing.
With graphics, banks can create financial landscapes showing such variables as price and time, and use color as an alerting device, highlighting, for example, a high-risk position or other anomalies, he said.
One Silicon Graphics customer that uses three-dimensional modeling is Toronto-based Bank of Nova Scotia. The bank developed its own derivatives application that works with Silicon Graphics multimedia workstations and graphics utilities.
According to Mark Engel, manager for derivatives products at the $135 billion-asset institution, three-dimensional visualization enables the bank to get a clear picture of computational results, and get a better sense of the risk that exists for particular portfolios or instruments.
The main benefit of the graphics, said Mr. Engel, is the ability to easily spot trends, overviews, and patterns in data. "Before, we were looking at pages of numbers," he said.
The bank is considering Silicon Exchange tools for use in the derivatives area, Mr. Engel said.
Silicon Graphics' hardware systems, including desktop computers, servers, and supercomputers, form the foundation of Silicon Exchange. All the systems offer interactive three-dimensional graphics, digital multimedia capability, and data analysis.
The systems integrate with a bank's existing computers, enabling financial institutions to make the transition from standard graphics, such as spreadsheets, to three-dimensional graphics, according to company officials.
Silicon Exchange also allows users to create text and graphics documents for posting on the World Wide Web, the multimedia portion of the Internet.