Opening up new revenue streams

Transcription

1 FusionCapital Solution insight Opening up new revenue streams Creating a centralised infrastructure to monetise collateral flows

2 Disparate cultures, technologies and redundant processes Financial institutions must intelligently change and simplify their organisational structures if they want to optimise their collateral management.

3 Unlock the full power of collateral and optimise your inventory Higher trading costs are driving banks to look for additional revenue streams, such as optimising collateral placement against trades. The lack of an enterprise view is an issue when trying to reuse collateral, compute initial margins and make optimal use of inventory. Traders have to deal with the headache of looking for information on OTC portfolio and collateral positions that are usually held in multiple places and on different systems. The lack of interfaces and integration between functions is preventing banks from truly optimising their collateral depriving them of the visibility they need to get the most of their inventory. Misys FusionCapital enterprise collateral management 3

4 Manual computation With products running on different systems, it is difficult, if not impossible, to aggregate and analyse cross-asset positions and risk measures. Traditional solutions are either ad hoc add-ons or spreadsheet-based manual exercises that result in a swollen cost structure comprised of decades of disparate cultures, technologies and redundant processes. Innovation challenges Making changes to organisational structure must be done carefully, not just as a pure cost-reduction exercise, taking interdependencies and implications into consideration. These changes must incorporate innovation into your long-term strategy to cope with challenged revenue pools, complex legacy operations and technology, and rising regulatory requirements. Process integration The alignment and integration of cross-product collateral operations is critical for establishing the foundation for proactive, cross-product collateral management. However, the process of integration is not straightforward. Internal systems and vendor solutions have evolved to address the needs of specific products and markets rather than being adaptable to support multiple products. 54 % 77.7 % 65.9 % rise of total reported collateral for cleared derivatives transactions. ISDA Margin Survey 2015 use of delivered cash for non-cleared derivatives. ISDA Margin Survey 2015 of cleared house trades used central counterparty (CCP) agreements. ISDA Margin Survey 2015 Demands on versatility Financial markets are constantly shifting, due to tighter capital and liquidity constraints and the prospect of changing monetary policy. To cope with these demands, organisations must adopt versatile operating models so they can quickly scale in growth areas that will play an important role in their future, such as collateral management. Enterprise-wide adoption For an effective enterprise collateral management strategy to be put in place, it demands engagement from front-, middle- and back-office functions as well as supporting operations and technology structures. 4 Misys FusionCapital enterprise collateral management

5 FusionCapital for enterprise collateral management Driving operational efficiency by delivering an enterprise view of all margin calls and collateral. Decision-helping tools With decision-helping tools for optimal pledge from accessible inventory and better investment return, FusionCapital underpins your business activities. You can deploy available assets in the most efficient configuration to support your levels of business activity. Minimise total cost of ownership FusionCapital offers out-of-the-box connectivity to and from both frontand back-office systems, allowing for an enterprise-level view at minimal total cost of ownership (TCO). Dashboards for cross-margining FusionCapital provides you with three customisable dashboards to monitor counterparty exposures and optimise collateral. The enterprise collateral dashboard provides you with an overview of the net collateral requirement over all collateral agreements, highlighting breached limits. The agreement collateral dashboard gives you a detailed explanation of net collateral requirements for one single agreement, explaining the consumption of the exposure limit by trades and by collateral. The securities inventory dashboard speeds up decision-making, displaying indicators to quickly identify the cheapest collateral to pledge and the most effective to accept under constraints. The enterprise collateral dashboard Misys FusionCapital enterprise collateral management 5

6 FusionCapital for enterprise collateral management Optimising collateral management within the front office reduces funding costs whilst providing additional revenue streams. Legislation ready Increasing levels of regulation, including the upcoming IOSCO legislations, are demanding transparent activities, such as the execution, more clearing and reporting of over-the-counter (OTC) derivatives, as well as variation and two-way initial margin exchange. ISDA proposes a standardised method to compute the initial margin based on sensitivities and hard-coded formula that aims at diminishing disputes and easing reconciliation. Integrated workflow and automation As the number of agreements and frequency of margin calls between them multiply, a manual margin call workflow is fast becoming obsolete. FusionCapital offers an out-of-the-box interface with AcadiaSoft, the marketstandard e-platform for automated margin call workflow, strengthening your straight-through processing (STP) workflow. FusionCapital for enterprise collateral management provides access to margin computation, ensuring you are ready for these new business requirements. Position deal view 6 Misys FusionCapital enterprise collateral management

7 Proven, award-winning solutions Technology Implementation Awards 2015 Winner for Best Treasury Management Project FSTech Awards 2015 Winner for Best Trading System Structured Products Technology Rankings 2015 Winner for Trading Systems Credit Gartner 2014 Leader - Gartner s Magic Quadrant for Trading platforms Risk Technology Rankings 2014 Winner: Trading Systems Rates Winner: Trading Systems Equities Winner: Trading Systems Forex Winner: Systems Support AsiaRisk Technology Rankings 2014 Winner: Trading Systems Forex Winner: Trading Systems Equities

8 About Misys Misys is at the forefront of the financial software industry, providing the broadest portfolio of banking, capital markets, investment management and risk solutions available on the market. With more than 2,000 customers in 130 countries our team of domain experts, combined with our partner eco-system, have an unparalleled ability to address industry requirements at both a global and local level. We connect systems, collect data and create intelligent information to drive smarter business decisions. To learn more about how our Fusion software portfolio can deliver a holistic view of your operations, and help you to solve your most complex challenges, please visit misys.com and follow on Twitter. Corporate headquarters One Kingdom Street Paddington London W2 6B United Kingdom T Misys and the Misys globe mark are trade marks of the Misys group companies Misys. All rights reserved. 326 / 115