RiskTech100® Winner’s Profile: Bloomberg

In today’s complex and volatile financial markets, accurate and independent pricing is essential. Bloomberg’s evaluated pricing service, BVAL, wins the award in Chartis’ RiskTech100® Evaluated Pricing and Data – Fixed Income category for the third consecutive year, while the firm itself achieves a top 20 ranking.

BVAL utilizes over 100 million pieces of data every day to supply evaluated pricing for over 2.5 million securities across all asset classes, including thinly traded and hard-to-price fixed-income securities. It stands out for its high-quality data, sophisticated methodology and the transparency of its valuation process and data inputs.

Fixed-income markets have evolved dramatically in the past few decades with the introduction of streaming quotes, exchange-traded funds (ETFs), electronic trading and ever-increasing compliance and regulatory requirements. BVAL has evolved to meet these changing needs and is used throughout organizations, from front-office traders and investment professionals all the way to the solution’s origins in the back office and end-of-day valuations.

Transparency and ease of access

As Stephanie Sparvero, Global Head of BVAL, comments: ‘We bring our clients market-leading quality, an innovative and transparent methodology, seamless operational integration and unrivalled customer service.

‘Our clients need a consistent pricing source that can be used throughout their organizations, how and when they want it. With the increasing need for all parts of an organization to understand providers’ prices, BVAL’s focus on transparency is also highly valued by our customers,’ she explains.

BVAL details and explains the valuation process and provides insight into its data inputs and algorithmic methodologies. ‘BVAL provides visible information about the pricing on our screens and metadata in our files, for our clients to better understand our pricing so they can justify how valuations are derived,’ says Sparvero.

BVAL’s pricing and models are available on the Bloomberg Terminal or as an enterprise data feed. Customers are able to receive pricing data as snapshot, tick-level or bulk delivery and as ad-hoc or real-time requests.

Tackling the scaling challenges of volatility

The outbreak of the coronavirus pandemic created a range of challenges for pricing providers. ‘Throughout 2020, pricing providers faced a really hard challenge with respect to managing the significant uptick in pricing challenges and exceptions at scale,’ says Sparvero.

‘Following the market volatility experienced during the first half of 2020, we invested in our platforms to ensure that we could handle the scale required in terms of both computational and processing power. As a result of these investments, we have been able to navigate a more volatile and unusual 2021 seamlessly for our clients. Looking ahead, fixed-income markets are facing the challenges of inflation and rising interest rates. This need for scale to balance volatility concerns will be increasingly vital,’ says Sparvero.

For Bloomberg, however, Sparvero explains that these investments accelerated pre-existing plans rather than taking BVAL on a new or different path. ‘I started leading BVAL in July 2019, then when the pandemic hit in March 2020, we realized that the technology advancements we had been building and testing needed to be immediately implemented for clients. So heading into that COVID-19 period we already had an idea about where our strategic investments would be. We looked at our quality, new data science techniques, scale, computation and our challenge process. During times of market volatility, we are able to integrate into our clients’ systems seamlessly, on demand. The quality that we are able to provide through that volatility is significant,’ she says.

Client partner innovation

Bloomberg will continue to actively invest to help its customers navigate the demanding and volatile market environment. ‘Our clients are managing risk and making decisions under uncertainty. Our goal is to support them by building upon our strengths to develop new and enhanced pricing solutions as markets evolve,’ says Sparvero. ‘Our clients know they can rely on us for stability in volatile and changing environments; our methodology and structured pricing approach remain consistent. But we are also continuously evolving and improving our models and our client experience.’

Bloomberg prides itself on partnering with clients in its innovation and product development. ‘Strong relationships with our clients mean their needs are embedded in our design process. We use their feedback to improve quality and delivery. Clients can depend on us for creativity in delivering solutions no matter what the future holds,’ Sparvero concludes.