ION Commodities puts customer engagement at the heart of its business

ION Commodities’ clients propel it to top slots in the 2022 Energy Risk Software Rankings. As well as forging deep client relationships, the firm is now helping clients connect with each other

Over the past 12 months, commodities firms have faced numerous challenges, from lingering Covid‑19 pandemic-related demand destruction – especially in China – to the deepening effects of Russia’s invasion of Ukraine and global inflationary pressures. Price spikes, security concerns and volatility continue to make the energy markets a challenging place in which to operate and one where it is essential that firms have effective risk management systems in place. In today’s environment of heightened geopolitical, market and counterparty risk, firms need accurate visibility into their current risk exposures and deeper insight into potential future exposures.

For ION Commodities, a technology firm with the world’s largest suite of commodities software, the immediate focus during these crises was assisting its approximately 1,200 customers on the risk management capabilities available to them in their existing commodity trading and risk management (CTRM) products. It then engaged clients to help them leverage these capabilities further in line with their individual needs in as streamlined a manner as possible.

“Many of our customers already had access to a wide variety of portfolio risk management tools – everything from scenario analysis to value-at-risk – and simply tweaking some of the key parameters in those algorithms and in their credit risk analysis systems meant that our customers were well placed to deal with the rising operational risks,” says Sunil Biswas, chief product officer at ION Commodities. “As the operating environment becomes more difficult due to rising inflation and interest rate pressure, it is critical to unlock valuable business insights and data analytics from the information buried deep in CTRM physical databases.”

Sunil Biswas

Appreciation of this close work with clients is reflected in ION Commodities’ strong performance in this year’s Energy Risk Software Rankings. In the survey, in which the users of commodities software vote for their preferred vendors across a variety of categories, ION Commodities appeared in an impressive 58 categories, gaining 16 first places.

The firm is constantly investing to develop and improve its offerings, including using artificial intelligence (AI) and machine learning to enhance its products.

“We are enhancing our offerings based around AI and machine learning to give customers predictive analytic capabilities,” says Biswas. “A recent example of that is the scheduling of natural gas movements over the North American Pipeline System.”

Another key product for ION Commodities is its Cargo Decision Analyser (CDA) for the liquefied natural gas (LNG) market, which it launched in 2021. Since then, sanctions on Russia and the tightening of Russian gas coming to Europe have made the CDA product even more pertinent.

“In addition to commodities price volatility and the macro drivers underpinning the shift towards renewable energy sources, as Russia’s energy superstore was gradually closed off the demand for LNG solutions accelerated,” says Biswas. “We have been investing in LNG capabilities across the value chain for several years, with CDA being launched before the Russian invasion.”

As LNG becomes more important to the global energy fuel mix, businesses require greater flexibility for their shipping routes and delivery options. Enabling traders and schedulers to optimise LNG cargo decisions by evaluating the available options based on existing contract and real-world constraints is paramount. “The CDA allows market participants to understand complex optionality in contracts while providing insights into risk, improving the users’ decisions to maximise profits,” Biswas says.

This ease-of-use concept and the facility to optimise the optionality in contracts has also been brought into ION Commodities’ approach to power purchase agreements (PPAs) and to renewable energy more generally, says Biswas. “The FEA Analyzer collates and analyses complex business data enabling informed, real-time decision-making while maximising profits across the value chain and is ideally suited for modelling the optionality on structured deals, such as PPAs and gas swing contracts, and recommending hedging strategies.”

In parallel to this, ION Commodities’ Aspect allows the seamless transfer of live market prices used to price trades and updates profit and loss within the CTRM, removing the risk of manual entry errors and missed price corrections. “Aspect is our integrated, all-in-one platform delivered as software-as-a-service in the cloud, which enables rapid deployment, controlled costs, and immediate return on investment,” says Biswas. “Aspect primarily addresses the needs of customers in the crude and refined products, and metals industries through our global teams and partner network. Support for carbon markets trading was recently introduced too.”

At the core of ION Commodities’ product development is continuous and ongoing engagement with customers. To further enhance these efforts, the firm has developed ConnectION, its customer engagement platform.

“This is a key part of our drive towards creating and consolidating a true community of users and getting them even more connected, not just to us but to each other,” says Biswas. “ConnectION allows us to exchange ideas and best practices, discuss industry trends and tackle critical topics, such as market standardisation and energy transition, with our community of 30,000 users.” He gives a recent example of a discussion about how best to adhere to European standards on electronic confirmations and electronic settlements.

“Bringing customers together into a community, we believe, will ultimately serve to lower costs, increase efficiency, and bring greater standardisation to commodities-intensive corporations,” he concludes. 

See the full Energy Risk Software Rankings 2022 results

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