On How Dataflow is transforming Risk Management: Interview with Devin Graham
“With multi scale dataflow computing, we adjust the structure of the computer to the problem, rather than spending countless hours molding the problem into a computer language which is then interpreted by a microprocessor in an endless game of “Chinese whispers”. The poor microprocessor has no chance to figure out what the original problem might have been. We take a specific problem and program your computer to only solve that problem, or teach you to do it yourself. This means that the microprocessor does not waste energy, time and power on trying to figure out what needs to be computed next.”–Devin Graham.
I have interviewed Devin Graham, in charge of Finance Risk Products at Maxeler Technologies. We covered in the interview the challenges and opportunities for risk managers and how dataflow technology is transforming the industry.
Q1. What are the typical functions of a chief risk officer?
Devin Graham: To minimize risk across four categories; market risk, operational risk, credit risk and regulatory risk. For market risk you are trying to maximize the potential profit of your institution whilst ensuring you have the lowest amount of volatile risk. With operational risk you need to look at your business processes and ensure you have systems and controls in place that minimise any negative financial impacts to running your business. To manage credit risk you need to minimise the risk of the exposure of your assets and profits to your counterparties. Regulatory risk management involves ensuring the business is aware of and follows regulations.
Q2. What are the main challenges at present for financial risk management?
Devin Graham: The data sets you are dealing with now are very large. The challenge today is meeting the complexity and vastness of this data with speed – in real time. The velocity of data also poses challenges around security, particularly with threats of intrusion and spoofing attacks which are much harder to detect when there is so much data to analyse. Your computer needs to work out the patterns of serial spoofers, and CPUs with standard software stacks are overwhelmed by the challenge.
Q3. In which way can data flow technology be useful for risk management for the finance industry?
Devin Graham: Our dataflow technology provides complex calculations at maximum speed, for running analytics on large scale data sets and for line rate processing of trade flow and matching, as well as data enrichment. Multiscale Dataflow provides the technology to bridge over today’s financial capability gap, providing real and measurable competitive advantage.
Q4. What exactly is dataflow computing?
Devin Graham: With multiscale dataflow computing, we adjust the structure of the computer to the problem, rather than spending countless hours molding the problem into a computer language which is then interpreted by a microprocessor in an endless game of “Chinese whispers”.
The poor microprocessor has no chance to figure out what the original problem might have been. We take a specific problem and program your computer to only solve that problem, or teach you to do it yourself. This means that the microprocessor does not waste energy, time and power on trying to figure out what needs to be computed next.
In a financial context, multiscale dataflow makes it possible to analyse risk in real time, rather than off-line, looking at risk in the future, rather than computing the risk of the past.
Q5. What are the main differences in performing dataflow computation, from computing with conventional CPUS?
Devin Graham: The main difference is that dataflow provides computational power at much lower energy consumption, much higher performance density and greater speed at tremendous savings in total cost of ownership. It is ideal for dealing with Big Complex Data.
More technically, CPUs solve equations linearly – through time. Dataflow computes vast numbers of equations as a graph, with data flowing through the nodes all at the same time. Complex calculations happen as a side effect of the data flowing through a graph which looks like the structure of your problem.
Q6. Do you have any measures to share with us on the benefits in performance, space and power consumption?
Devin Graham: Maxeler’s Dataflow technology enables organisations to speed up processing times by 20-50x when comparing computing boxes of the same size, with over 90% reduction in energy usage and over 95% reduction in data center space. Taking one of our customers as an example. They were able to run computations of 50 compute nodes, in a single dataflow node. Such ability brings 32 Maxeler dataflow nodes to an equivalent of 1,600 CPU nodes, delivering operational cost saving of £3.2 million over 3 years.
In a financial risk context the advantages of Multiscale Dataflow Computing enable the analysis of thousands of market scenarios in minutes rather than hours. A Tier 1 investment bank recently delivered portfolio pricing and risk in seconds, down from minutes.
Q7. What is the new paradigm for financial risk management defined by Maxeler Technologies?
Devin Graham: The new paradigm shift resulting from Maxeler’s technology enables traders and risk managers with a super power: real-time data analysis. The technology is available right here and right now, as opposed to other technologies which remain on the horizon, or require a datacenter to be cooled down to 0 Kelvin to compute a few bits of results.
Dataflow computing works at room temperature, without the need to cool things down to the point where even the smallest particles stop moving.
Since we describe Dataflow programs in Java, it is easy to learn how to program Dataflow Engines (DFEs). Financial analytics experts are learning how to program their DFEs themselves — putting power back into the hands of financial experts, without the need for help from external sources. That is very exciting!
Devin Graham, Senior Risk Advisor, Maxeler Technologies
Devin Graham, former partner and Chief Risk Officer at a multi-billion dollar hedge fund has spent his entire career in the financial services industry, managing risk, technology and businesses for large hedge funds and leading investment banks.
As Chief Risk Officer, Devin established and chaired the risk committee, was a member of the executive committee and investor relations management team. During his tenure, the fund achieved market leading returns with minimal return volatility.
Previously, Devin developed and managed multiple new technology driven businesses at a leading investment bank including Prime Brokerage, Derivative Investor Products, and Risk Analytics.
Devin received his B.S. in Biomechanical Engineering from MIT
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