Legacy Energy Trading and Risk Management (ETRM) systems, while offering extensive functionality and seamless integration into customers' IT landscapes, are too often hindered by outdated technology. This technological stagnation impacts critical activities and diminishes user satisfaction. We explore what user experience should now be deemed essential, and why have expectations evolved from a time when these systems were considered sufficient?
Today’s traders are encountering challenges that are markedly different from those they faced just a few years ago. Power markets for instance have grown increasingly in the short-term and real-time, rendering traditional reporting dashboards inadequate due to the rapid pace of information updates. Modern traders now require access and integration of diverse data types, such as weather data, which plays a crucial role in forecasting renewable energy production.
These diverse data needs highlight the necessity for advanced technological solutions capable of consolidating and analyzing multiple information streams in real-time. AI-based technologies and visualization tools play a crucial role by filtering and summarizing unstructured data, such as identifying related events, enhancing traders' situational awareness and supporting their need for rapid, actionable insights in fast-moving markets.
Adding to the challenge, the expectations of new industry entrants have shifted. Given that their employees have grown up with social media, gaming and advanced internet tools, these users demand systems with better visualization and interaction capabilities compared to most legacy ETRM software. These users expect the systems that they interact with to be smooth, intuitive, and timely.
A recent trend among vendors is the development of dashboards tailored to the user's profile and role. For example, market risk analysts need dashboards displaying PNL, VAR, and similar metrics, while credit risk analysts focus on credit exposure, CVAR, collaterals, or bilateral margin information. Each user group – from front office traders to risk managers and back-office personnel – require access to relevant key performance indicators (KPIs) displayed clearly on their screens. Additionally, individual users within each group may require personalized filtering and presentation methods.
Potential Solutions
The industry is currently experiencing a wave of improvements in data visualization. One key development is the creation of role-based, customizable screens that incorporate advanced graphics and are more intuitive. Additionally, there is a growing emphasis on making data within these systems more accessible for third-party tools like Python, PowerBI, and Tableau. Some vendors are exploring how AI can guide users through workflows, transitioning seamlessly between screens and even different systems to enhance productivity.
Moreover, some vendors are also looking at how Natural Language Processing (NLP) and Generative AI can improve the User Interface and Experience (UI/UX). These technologies aim to enable users to interact with their software via conversational inputs, effectively ‘talking’ to their systems. Such advancements promise significant enhancements in user experience and efficiency.
As the volume and latency of data has become so important, many trading companies are also exploring the establishment of data lakes to collect real-time data from various sources, not limited to ETRM systems. These cloud-based, scalable data lakes facilitate the organization, analysis, and integration of data into customizable dashboards utilizing the visualization tool of your choice. Specific examples include so-called risk aggregation platforms like those offered by RadarRadar, for example, that allows better visualization of enterprise risk data.
Choosing the Right Software
Selecting visualization software entails consideration of several factors. Ideally, the software should offer flexible tabular and graphical representations, support real-time monitoring, and allow for easy configuration with the ability to save individual screens. While open-source tools with a broad user bases are often preferred, licensed software remains a viable option. Cloud-based, scalable solutions with REST API-connectivity ensure seamless integration with existing systems and adaptability.
Users have the flexibility to configure dashboards themselves or engage third-party consultants to tailor solutions according to evolving business needs. Experienced teams proficient in specific visualization tools, such as Power BI, can efficiently construct dashboards for various customers, independent of the underlying ETRM system, offering customers a competitive edge.
Some vendors, like FIS, Quor, and Enuit, are addressing visualization challenges by developing modern visualization layers on the top of their legacy UIs. This approach allows users to transition gradually, leveraging both old and new interfaces. However, with this strategy comes challenges. The need to switch between interfaces during the transition can disrupt the user experience, and a complete transition may take years. Despite vendor investments in modernizing UIs, customers may decide to rely on external dashboards during the transition period, potentially undermining the efficacy of vendor efforts.
Conclusion
The evolution of data visualization in ETRM systems is at once a challenge and an opportunity. By embracing role-based customizations, leveraging AI and NLP, and integrating with third-party tools, the industry can significantly enhance user experience and productivity. Vendors must balance innovation with practical transition strategies to ensure long-term adoption and satisfaction.
