Collateral Management Solutions: Mitigating Toil, Trouble, and Collateral Damage in Uncertain Times

Create a vendor selection project & run comparison reports
Click to express your interest in this report
Indication of coverage against your requirements
A subscription is required to activate this feature. Contact us for more info.
Celent have reviewed this profile and believe it to be accurate.
3 June 2010
Cubillas Ding and Sreekrishna Sankar


In the “new norm” of capital scarcity and increased volatility, Celent urges firms to achieve higher responsiveness to counterparty credit deterioration, attain full reuse of collateral across products, minimize overcollateralisation, and realize funding efficiencies.

The rigors of a financial crisis can significantly strengthen the resolve of collateralization efforts. Mitigating counterparty credit risk has always been a necessity, yet recent market turbulence and high-profile credit failures have given the practice new relevance and urgency. Explosive year-on-year growth in collateralized OTC transactions is testament to this.

Cubillas Ding, Research Director at Celent and coauthor of the report, notes, “Collateral management continues to be the best form of defence against an uncertain eonomic backdrop and a prime focus area since the recent financial crisis brought the need for better mitigation of counterparty risk to the fore. However, despite ongoing emphasis to retool and upgrade capabilities, there remains considerable scope for improvement in the operational and technological aspects of this process. The need for a firmwide collateral management system has become critical, in order to enable firms to achieve new levels of efficacy and responsiveness in credit risk mitigation efforts. This is especially pertinent in an environment of tight capital and an uncertain economic landscape.”

“Institutions looking to achieve best practices in collateral management have to go beyond the technological and administrative aspects of managing collateral into a highly cohesive approach to integrating collateralisation processes strategically into a firm’s trading and risk architecture. It is critical for collateral management to be transformed beyond a reactive back office activity into one that is aligned with credit risk management functions and integrated proactively into front office counterparty, pricing, and limits decisioning,” notes Sreekrishna Sankar, Analyst and coauthor of the report.

In this new report, Celent analyzes the trends and practices in the collateral management industry. It looks at how the solutions in the market are catering to client requirements as well as gaps and improvement areas for solutions. Celent looks at the best practices in the industry and compares and contrasts the various kinds of solutions in the market. The report also evaluates solutions in the market and provides pointers to firms on which solution will fit their needs best.

This study examines six vendors which deliver solutions that underpin financial firms’ efforts to raise the bar on collateralisation capabilities. The vendors analysed in detail include: Algorithmics, Lombard Risk, Misys, Rockall Technologies, Sophis, and SunGard. The report assesses the solutions based on Celent’s proprietary ABCD evaluation framework.

This report is also intended to be a guide for banks, asset managers, hedge funds, insurers, and other financial firms that are planning their credit risk and collateral management risk technology initiatives.

Subscription required

Access to this content requires a Celent research subscription.

Subscribers should sign in to access this research.

If you are not a subscriber, register now or contact us to find out more about our subscription options.

Insight details

Capital Markets, Wealth Management
Subscription(s) required to access this Insight:
Risk, >>Financial Services Risk
Insight Format
Geographic Focus
Asia-Pacific, EMEA, LATAM, North America