More recently, Goldman Sachs has opened up its risk management system called SecDB to clients in a range of apps to help clients customize derivatives or other instruments.
J.P. Morgan’s effort, which went live earlier this year, is the bank’s first external product based on Athena. Others may follow: It’s looking to offer related services in the future, including risk management systems for regional and foreign banks.
Athena was created with help from some of the same engineers who designed Goldman Sachs’ SecDB in the 1990s. Goldman’s program was seen as the bank’s secret sauce for trading because it allows for a unified, real-time view of risk across a bank’s trading positions. SecDB is credited with helping Goldman navigate the 2008 financial crisis better than other banks, which typically relied on a network of cobbled-together programs across trading desks.
At J.P. Morgan, Athena replaced nine separate systems in the fixed income division and later spread to include equities.
Clients targeted for J.P. Morgan’s IAP include pensions, endowments and insurance companies. Those asset owners are assuming more investing duties to save money, said Heitsenrether, a 30-year J.P. Morgan veteran who took over the custody bank in 2015. While big asset managers already have sophisticated tools to examine their holdings, pensions and others don’t, providing an opening for J.P. Morgan, she said.
“They don’t have a good way to aggregate all that info across multiple external portfolio managers, and may discover that they have an overly concentrated position in Apple because everyone owns the same stuff,” Heitsenrether said.
The move puts J.P. Morgan at odds with products from industry vendors including MSCI, Bloomberg and even client BlackRock, she said.
The bank declined to provide revenue projections for the program; it’s seen more as a way to attract and retain clients to the custody business than as a stand-alone operation, according to a person with knowledge of the firm. Custody helped generated $3.9 billion in revenue last year, a 9 percent increase from 2016. So far this year, revenue in the business has climbed 11 percent.