Collateral management has become a business critical function within all financial institutions from multiple perspectives – such as risk management, optimization of funding costs and operational streamlining.
The post-crisis regulatory developments (arising from the G20 agreements) have served to significantly increase this importance. Financial institutions are responding by re-engineering their end-to-end collateral management processes to create integrated organisational structures, processes and systems which are able to effectively manage both counterparty risk and optimize funding costs.
This is a major challenge for many organizations, requiring amongst other things:
- Integration across collateral silos including OTC and Exchange Traded Derivatives, repo and securities lending
- The set-up of enterprise wide secured funding capabilities within the front office covering collateral, repo and securities lending activities
- The implementation of new systems capabilities to support effective management and optimization of collateral and firm-wide inventory
- Full operational straight-through processing of the operational collateral process from margin calculation through to margin call through to settlement
- The ability to calculate initial margin in a robust and transparent manner
InteDelta works with banks, hedge funds and asset managers to enhance their collateral management functions in order to design and deliver industry best practice. Our overall consulting offering to the collateral management industry forms the InteDelta Delivery Lifecycle for Collateral Management.
The InteDelta Delivery Lifecycle for Collateral Management encompasses the following specific services and tools:
- Business Case Definition for Collateral Management
- Collateral Management Benefit Assessor
- Target Operating Model Definition for Collateral Management
- Business and Functional Requirements for Collateral Management
- System Selection and Solution Definition for Collateral Management
- Collateral Management System Select
In addition to our services for financial institutions we have a range of services for system vendors and outsourced providers of collateral management services – see vendor services.