Usage-based pricing model brings big benefits to clients of RiskSpan’s Edge Platform

Analytic solutions for loans, MSRs and structured products are typically offered as software-as-a-service (SaaS) or “on-prem” products, where clients pay a monthly or annual fee to access the software and its features. The compute needed to run analytic workloads is typically purchased in advance and is fixed regardless of the need or use case.  

However, this traditional pricing model is not always the best fit for the dynamic and diverse needs of analytics users. It is technologically outdated and does not meet users where they are – with varying data volumes, usage patterns, and analytical complexity requirements that fluctuate with the markets. It is simply wasteful for companies to pay for unused, fixed-fee compute capacity, year-after-year in long-term, set price contracts, when their needs don’t require it. 

Usage-based pricing is a trend that reflects the evolving nature of analytics and the increasing demand for more flexible, transparent, and value-driven pricing models.

RiskSpan has just announced the release of industry-innovating usage-based pricing that allows clients to scale up or down, based on their needs. Further, clients of the RiskSpan platform will now benefit from access to the full Edge Platform, including data, models and analytics – eliminating the need to license individual product modules. The Platform supports loans, MSRs and securities, with growing capabilities around private credit. Analyzing these assets can be compute- and data-intensive because of the need for collateral (loan-level) data and models to price, value, and calculate risk metrics.

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Usage-based pricing is an innovative alternative approach based on user-configured workloads. It enables RiskSpan to invoice its clients according to how much compute they actually need and use, rather than a fixed fee based on the modules they purchased during the last budget cycle.  

Usage-based pricing benefits RiskSpan clients in several ways, including: 

  • Lower Costs: Clients pay only for what they need, rather than being locked into an expensive contract that may not suit their current or future situation.
  • Cost-Sharing Across the Enterprise: Clients can share costs across the enterprise and better manage expense based on usage by internal functions and business units.
  • Transparency: Clients can monitor their usage and directly link their analytics configuration and usage to their results and goals. They can also better control their spending, as they can track their usage and see how it affects their bill.
  • Flexibility: Clients can experiment with different features and options of the Platform, as they are not restricted by a predefined package or plan.

Usage-based pricing is not a one-size-fits-all solution, and it may not be suitable for every organization. Based on needs, large enterprise workloads will require specific, customized licensing and may benefit from locked in compute that comes with volume discounts.

Bottom Line on RiskSpan’s Usage-based Pricing Model

CONS of Traditional Fixed Fee PricingPROS of Usage-Based Pricing
Flat-fee pricing models force customers to pay for unused capacity​.Lower Costs — Pay only for what you use, not the wasted capacity of a dedicated cluster
Unused capacity cannot be shared across the enterprise, which translates into wasted resources and higher costs.Cost Sharing — Costs can be shared across the enterprise to better manage expense based on usage by your internal functions and business units
Fixed pricing models make it difficult for customers to scale up or down as needed.Transparency — Transparent pricing that fits your specific analytics workload (size, complexity, performance)
Traditional “product module-based” purchasing runs the risk of over-buying on features that will not be used.Flexibility — Scale up and scale down your use as new and in-place features become useful to you under different market conditions

With the introduction of usage-based pricing, RiskSpan is adding core value to its Edge Platform and a low-cost entry point to bring its solution to a wider base of clients. Its industry-leading capabilities solve challenges facing various users in the loans, MSR, and structured portfolio domains. For example:

  1. Loan/MSR Trader seeks analytics to support bidding on pools of loans and/or MSRs. Their usage is ad-hoc and will benefit from usage-based pricing. Traders and investors can analyze prepay and credit performance trends by leveraging RiskSpan’s 20+ years of historical performance datasets.
  2. Securities Trader (Agency or Non-Agency) wants more flexibility to set their prepay or credit model assumptions to run ad-hoc scenario analysis not easily handled by their current vendor.
  3. Risk Manager wants another source of valuation for periodic MSR and loan portfolios to enhance decision making and compare against the marks from their third-party valuation firm. 
  4. Private Credit Risk Manager needs a built-for-purpose private credit analytics system to properly run risk metrics. Users can run separate and run ad hoc analysis on these holdings.

For more specific information about how RiskSpan will structure pricing with various commitment levels, click below to tell us about your needs, and a representative will be in touch with you shortly.