WHY SHOULD THE FIRMS AIM FOR A CENTRALISED COLLATERAL MANAGEMENT INFRASTRUCTURE?

Collateral Management Question Series

Many organisations still operate separate collateral pools to manage margin. Often this means the structure does not enable margin netting and compression to realise collateral and cost efficiencies for revenue-generation opportunities and can result in sub-optimal use of collateral inventory. If you include bilateral margin calls and settlement liquidity, then there is potential to utilise your triparty collateral arrangements to service a wider pool of business needs.

The ability to break-down product silos and provide a holistic, cross-product view of risk to optimise firm-wide collateral inventories gives rise to competitive advantages which are not only proving to be critical to the success of any institution but for the financial industry as a whole. Therefore, the belief is that a centralised collateral management infrastructure, such as Colline, is critical and should be at the forefront of any solution provided by fintech companies.

RICHARD GOMM
HEAD OF EMEA COLLATERAL MANAGEMENT SOLUTIONS