Genpact Limited and Lombard Risk Management plc have teamed to launch a solution to help financial services firms optimize their collateral management operations.
The collaboration between Genpact and Lombard Risk with CARDS and COLLINE addresses major cost pain points in the industry, and significantly improves margin and collateral management efficiencies with a true end-to-end solution.
Genpact will integrate its Collateral Agreement and Reference Data Services (CARDS) with Lombard Risk’s COLLINE® collateral, clearing, inventory management and optimization solution. This unique solution will enable both buy and sell-side firms to automatically digitize and capture the terms and conditions of various collateral agreements across asset classes, counterparties, and business silos, resulting in a margin and collateral rulebook by counterparty.
More specifically, the digitized data loads COLLINE’s agreement management database critical counterparty margin and collateral rules needed to efficiently manage and optimize margin and collateral, sharply reducing the time required to manually capture the information from existing and new agreements and amendments. Genpact’s service includes the data entry of custom agreement terms which are incapable of being extracted and digitized by CARDS, and management of the data.
In addition, the two companies are launching a joint business processing outsourcing (BPO) service for the collateral management function to include processes such as setup and management of agreements, integrating and verifying positions and inventory, processing of margin calls extending from issuance to settlement, and supported by aging analysis, dispute resolution, and failed settlement and customized reporting—together with comprehensive optimization and inventory management.
Real-time margin management and intra-day collateral management are rapidly becoming the table stakes for financial services firms to survive and grow. They must drive a number of key functions including managing dynamic margin, collateral eligibility rules, settlement systems, exchanges, collateral across multiple counterparties, and clearing venues with diverse margin and collateral requirements. They must also ensure their liquidity and funding capacity through collateral optimization as well as capturing, mitigating, and allocating collateral costs across products and COLLINE is the leading platform for collateral anagement and CARDS has the widest coverage of agreement types.
Monty Singh, senior vice president and business leader at Genpact’s Capital Markets and IT Services, said: ‘When combined with Genpact’s services delivery capabilities and CARDS platform which seamlessly manages collateral relationship, we are filling a huge gap in the market by enabling true collateralization.
‘This service helps firms advance their operating models and make operations more intelligent – able to capture data, execute transactions and provide visibility faster and more time effectively – thereby enabling companies to better sense, react, and continuously learn from their activities in the market.’
Lombard Risk’s COLLINE provides firms with a comprehensive collateral management, clearing, inventory management and optimization solution – supporting both house and client-clearing for direct and indirect clearers, and offers flexible functionality, with rule builders, to enable clients to manage their ongoing requirements.
Developed by Genpact’s Capital Markets business resulting from Genpact’s acquisition of Headstrong in 2011, CARDS is designed to provide financial services firms with a streamlined margin and collateral management process. CARDS helps banks automatically digitize and capture the terms and conditions of various collateral agreements across asset classes and counterparty types. It integrates this data with counterparty and security reference data and central counterparty (CCP) margin models as well as enterprise-wide collateral inventory sourced from systems across different lines of business. Finally, CARDS enables use of this information to drive effective downstream processes such as collateral allocation and substitution and collateral optimization.