Investment Operations

Innovation in Collateral Management: A Forward-Looking Perspective

Collateral Management

The latest Aite Group report finds that firms have taken a transformational approach to developing innovations in collateral management.

The 2008 financial crisis and the years following had a drastic impact on collateral management and elevated the importance of its operations as evidenced by many firms’ initiatives to create operational and technological efficiency in collateral management. As a result, collateral management is one of the few functions that is making a dramatic shift from the back office to the front office—a key evolution in a post-COVID-19 pandemic world.

Innovation in Collateral Management: A Forward-Looking Perspective, a new Aite Group report, focuses on what service providers’ roadmaps and value propositions might look like in the next 12 to 18 months and how that might mold future practices and tech spend.

“Financial institutions are adopting a holistic, enterprisewide approach to the collateral inventory management system by combining trading books and banking books to unlock the value of collateral in pre-trade and post-trade optimization,” explains Vinod Jain, senior analyst at Aite Group.

This report examines top innovative trends in collateral management adopted by central banks, institutions managing banking books and trading books, and the buy-side. It is based on qualitative interviews with over 30 market participants conducted in the second and third quarters of 2020. It also profiles 21 firms engaged in the collateral markets ecosystem: AcadiaSoft, ApPello Limited, Bloomberg MARS, BNP Paribas Securities Services, Broadridge Financial Solutions, Calypso Technology Inc., Cassini Systems Limited, Citi Markets and Securities Services, Finastra, FIS, Genpact, Hazeltree Fund Services Inc., Margin Reform, Margin Tonic, Murex, Pirum, SmartStream, State Street Global Markets, Transcend Street Solutions, Vermeg, and Wipro Limited.