Note: This case is written based on the use of X-Ray by China Oil for the sake of client privacy and business confidentiality. Specific details have been partially fictionalized, focusing on demonstrating the value and solutions of the product’s features.
Challenge:
Ms. Chen, a core member of the risk control team in a bulk commodity trading company, is responsible for monitoring the risk of the iron ore spot group. One of her challenges is to effectively monitor and manage the optimization of hedging profits and losses, ensuring the financial stability of the company, and being able to take prompt action in case of risk events.
Solution:
Ms. Chen turned to the monitoring alert and limit management features of X-Ray System to help her better understand the risk situation and ensure the financial stability of the company. Here is how she utilized these features:
- Set Monitoring Objectives: Ms. Chen first set the monitoring objectives in the limit management module of X-Ray as “Iron Ore Spot Group,” specifying the business unit she needed to monitor.
- Specify Monitoring Object: She selected “Optimization of Hedging Profits and Losses” as the monitoring object to ensure that the company’s profits and losses are within a manageable range.
- Set Monitoring Path: Ms. Chen set the monitoring path as “Iron Ore and Related Business Group” to ensure coverage of relevant data sources.
- Use Formulas and Fields: She chose “Iron Ore Daily Report” as the reference formula and specified the field to monitor as “Profits and Losses.” This ensured that she was monitoring profits and losses related to iron ore business.
- Set Authorization Scope: Ms. Chen set specific numerical ranges for this monitoring project to inform traders of their operational limits.
- Receive Alert Notifications: She provided her email for receiving alert notifications, ensuring that she would promptly receive alerts if the limits were exceeded.
Results:
After Ms. Chen’s settings took effect, she received an alert notification from the system one day. This allowed her to quickly understand the risk event, and she subsequently took appropriate actions, notifying relevant departments and reporting promptly. This ensured the company’s timely response to risks, minimizing potential risk losses. Ms. Chen successfully utilized the monitoring alert and limit management features of X-Ray System, ensuring the financial stability and efficient risk management of the company.
X-Ray System Monitoring Alert and Limit Management Features:
Monitoring Alert Feature:
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- Real-time Risk Monitoring: Enables real-time monitoring of traders’ specific trading activities and risk situations without manual checking of each transaction, facilitating quick detection of potential risk events.
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- Automatic Alerts: The system automatically assesses whether abnormal conditions exist based on set limits and monitoring conditions, generating corresponding alerts. This reduces the workload of risk control personnel and ensures important information is not overlooked.
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- Alert Notifications: Once an alert is triggered, the system notifies risk control personnel through the X-Ray System dashboard and designated email addresses. This ensures timely awareness of risk events, allowing risk control personnel to take immediate action.
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- Historical Records: The system retains daily alert records, allowing risk control personnel to review and analyze historical trends of risk events, supporting decision-making and reporting.
Limit Management Feature:
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- Precision Control: Allows risk control personnel to set monitoring limits precisely based on specific business needs and risk situations, enabling the company to control risks accurately and within acceptable limits.
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- Customized Monitoring: Risk control personnel can set different monitoring limits for different business groups, monitoring objects, data sources, report calculations, and selected fields. This flexibility helps meet the needs of different departments and traders.
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- Authorization Scope: By setting authorization scopes, the company can explicitly inform traders of their operational limits, reducing the risk of errors and non-compliance.
In conclusion, the monitoring alert and limit management features provide powerful tools for risk control personnel like Ms. Chen to monitor risks in real-time, alert potential issues, and precisely control risks. This helps maintain the financial stability and reputation of the company while improving the efficiency of risk management. This is particularly crucial for bulk commodity trading companies, especially when dealing with high-risk and complex transactions.
