Research & Thoughts

Collateral Management

More than ever, Collateral Management is central to regulatory compliance and commercial success

The role of Collateral Management (CM) is essential in any effective approach to dealing with change driven by regulation. But compliance is only part of the story. There are multiple, highly attractive business efficiencies and opportunities that a proactive and far-sighted (sell and buy-side) CM strategy can identify and exploit.

Collateral Management has never mattered as much as it does today. And in the near future, the stakes look set to rise even higher. The industry is working both to understand the scale of the changes that lie ahead and to get a real sense of the opportunities involved. One recent forum estimates the order of change needed in Collateral Management to lie between a $20m and $100m challenge, depending on the type of bank concerned, its situation today and its aspirations for tomorrow.

In fact, far-reaching regulatory developments and ongoing liquidity concerns have driven nothing short of a strategic imperative to revolutionise CM. Nor is the impact of change due exclusively to the demands of regulation. The buy-side is waking up to the new possibilities and choices that improved Collateral Management creates for them. In this paper – which takes the CM insights Capco published last year and applies them to the practical issues – we examine the keys to getting CM right, in a radically redrawn industry landscape.