In response to market changes and new legislative mandates, financial institutions want to evaluate their current collateral activities, leverage current strategic initiatives, and be able to create an industry leading collateral solution for their clients across product and business lines. A new operating model will require fundamental changes to collateral management’s organizational structure, systems, processes, and people/skill sets. We understand that a financial institution’s primary objective for this type of project includes developing a leading collateral services strategy taking into account:
- Collateral management can be manually intensive, time-consuming and expensive.
- Need to achieve a consolidated view of positions across the bank.
- Current offerings, capabilities, organizational structure and potential linkages among collateral repurchase agreements and securities lending.
- Ensure liquidity levels are maintained and optimized.
- The regulatory environment and competitive offerings.
- Potential partnerships and acquisitions as a catalyst to support the strategy.
- Projected financial scenarios as well as capital and risk implications of potential service offerings.
The primary output of this engagement will include options and recommendations around specific collateral opportunities and product offerings. This project should also recommend an execution approach as well as highlight potential risks to proposed opportunities.
