The development cycle for these new financial products is usually measured in days and weeks. A bank would have teams of highly paid mathematicians who develop these new products. Traders, anxious to trade these profitable new instruments, are often frustrated on being told by risk managers that the products can only be traded once they are fully integrated with the institution's risk management computer systems. This then leads the traders to ask the systems developers how long the integration will take, only to be told it may be weeks or months, by which time the business opportunity for the product will be lost. Systems developers are placed in the unenviable position of a having to deal with a constantly changing and never ending specification for the systems they build.
New products come along with completely different and more complex data attributes.
New risk measures need to be analysed and reported. Whilst relational database technology is extremely well suited to the querying and reporting side of the risk management function, it does not deal well with two aspects of what is required by the derivatives markets. The first is the need for constant change and revision of the data model that is used to define a derivative instrument. The second is for the storage of data types that do not easily fit in a relational model, but are required in the definition of the financial product, such as arrays and matrices. The immediate response from traders when faced with the delays mentioned above was to attempt to manage the risks in these trades through spreadsheet analysis.