The Collateral domain has undergone major, positive evolution in recent years, with end-to-end infrastructure uplift driven by heavy regulations and improved market solutions.
However, a rising funding cost base and long-term market volatility have increased attention on Collateral, including its profit impact and resiliency to stress events.
All firms today should own a clear and tailored Collateral target operating model (TOM), to ensure a scalable, future-proofed operating model and sustainable cost base. Collateral TOM foundations will always include maximised end-to-end process automation and near real-time data.
Key TOM components to achieve those goals may include a combination of new collateral workflow platform, enterprise data golden sourcing and data management, leveraging of AI, cross-product asset inventory, pre-trade analytics, collateral optimization, asset tokenization and DLT solutions, outsourcing or offshoring strategies…..and more.
On the Clearing side, despite being a more mature industry operating model, more aggressive firms continue to identify plenty of opportunities for profit growth and cost optimization, via improved IT, operational and funding solutions.
Clearing product scope also continues to expand, with Sponsored Clearing one such model receiving plenty of attention from the buy-side, due to capital, liquidity, trading capacity and risk benefits.
Come chat to hear more about our Advise, Transform, Educate and Operate services under Margin Tonic.