Clients can now streamline complex processes, enhance straight-through processing, boost operational efficiencies, and reduce costs and risks with the launch of Baton’s new intelligent, automated, real-time collateral management workflows.
Selecting the right assets for collateral delivery is a critical and complex task. Collateral providers require complete transparency over their cash and non-cash collateral and a thorough understanding of eligibility criteria. Without these key insights, optimal collateral placement becomes a costly and risky gamble. With a decade of experience as an Optimisation Liquidity Manager, I’ve experienced firsthand how immense the challenge of swiftly gathering these inputs for effective analysis and action can prove.
When done manually, selecting assets and then instructing their movement can prove time-consuming, error-prone, and inefficient. Challenges like a lack of real-time visibility, meeting complex eligibility criteria, and mobilising assets across multiple venues can slow down operations and hinder strategic decision-making. Baton’s advanced intelligent workflows enable financial institutions to automate and optimise these processes with precision and ease.
Collateral Management: The Need for Change
For too long, firms have had to rely on outdated and often manually intensive solutions that fail to aggregate collateral requirements effectively or provide real-time data on asset availability. The inability to adapt these processes leads to unnecessary costs, increased risks, and missed opportunities for financial resources to be optimally deployed. Addressing these challenges requires innovative, scalable and extensible solutions able to automate tasks, eliminate inefficiencies, and provide actionable real-time insights.
Increasing collateral management workflow efficiencies
Baton’s Core-Collateral® enables firms to streamline operations by providing real-time visibility into collateral balances along with comprehensive eligibility criteria. The direct two-way connectivity allows users to efficiently instruct collateral movements across multiple venues via a single, consolidated interface. However, we’ve now taken our collateral management system to the next level by introducing an advanced low/no-code rules engine to automatically determine and propose the ideal assets to pledge or recall in real time. It does this following the pre-set criteria selected by the user.
This means clients no longer need to manually analyse and allocate assets based on complex conditions. Instead, they simply define the rules they want our collateral management software to follow, and it seamlessly handles the rest.
What once required active monitoring and manual decision-making is now fully automated, saving time, reducing errors, and optimising efficiency.
“Clients no longer need to manually analyse and allocate assets based on complex conditions. Instead, they simply set the rules, and our collateral management software does the rest.”
Optimisation with intelligence and control
Here’s what this means in practice.
Optimisation should generally result in the nominal “cost” of the collateral placed being as low as possible. Once a firm has accessed its real-time balances and the relevant collateral eligibility criteria it can then determine where and how its collateral could be best placed to achieve the lowest cost. The firm might also need to consider specific “house rules” like keeping 10% extra collateral at a particular venue for instance – its specific strategy will ultimately depend on how it utilises its overall collateral portfolio.
With the introduction of Baton’s intelligent collateral management workflows, clients can use an optimiser tool and activate specific rules to identify the collateral that needs to be delivered to a venue on a given date, thereby helping the firm achieve maximum return with minimal risk.
Intelligent workflows powered by low-code configurable rules
Baton’s intelligent, automated collateral management workflows are configurable, enabling business users to easily create custom no-code rules without the need for a developer. These could could include, for instance, setting specific rules for accounts involving multiple currencies or for determining whether collateral assets should be substituted or recalled.
“Baton’s Management Dashboard consolidates real-time data on collateral sources, uses, and balances alongside other critical metrics into one customisable interface.”
Real-time visibility with Baton’s Collateral Management Dashboard
Visibility is a critical component of effective collateral management. Baton’s newly introduced Management Dashboard consolidates real-time data on collateral sources, uses, and balances alongside other critical metrics into one customisable interface. Providing a comprehensive overview that can include views of available collateral across all venues and real-time customisable alerts, teams across the business can monitor sources and uses of financial resources as well as the completion of key operational tasks at a glance. They can track performance and ensure that appropriate collateral management strategies are being executed in alignment with the firm’s goals throughout the day.
How providing intelligent, automated, real-time collateral management workflows benefits our clients
Integrating intelligence into our automated workflows offers the potential for clients to unlock considerable financial and operational efficiencies. We know Core-Collateral is already empowering our client’s operations teams with significant time-saving capabilities. With the ability to set the parameters for automated collateral handling, this enhancement can help clients make smarter liquidity management decisions faster—offering a clear edge in an increasingly complex financial landscape.
Keen to learn more about our recent enhancements to Core-Collateral? Reach out directly via our contact form and we can arrange a time to speak.