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| Asset and Trade Servicing |
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Asset and Trade Servicing
Challenges
- Unstructured documentation and limited bandwidth to perform end-to-end loan operations
- Performing periodic mark-to-market valuation of secured obligations
- Growing complexity of collateral securities posted by counterparties
- High uncertainty regarding credit rating of the collateral securities and counterparties
- Manual portfolio recon difficult due to increasing trade volumes & diversity of portfolios
- No structured approach to chase counterparties and internal stakeholders to resolve discrepancies
Solution
Loan Servicing
- Monitor the outstanding queues (in WSO) and ensuring that no transactions get spilled over beyond Effective Date
- Investigate & resolve cash flow discrepancies
Collateral Management
- Identify and evaluate paired trades as per their MTMs and identify collateral requirements
- Calculate the amount of collateral required to be posted
Collateral / Counterparty Monitoring
- Monitoring credit ratings of collateral security and counterparty on data sources like S&P, Moody’s, Fitch, Reuters, Bloomberg, etc.
- Developed in house tools like crawlers to search through databases like Factiva, Reuters, etc.
Portfolio Reconciliation
- In house developed reconciliation engine to identify breaks as per rules defined by client
- Additional audit check to ensure correctness of the pairing generated by tool & resolving the issues using ISDA / market standards
Benefits
- Compliance with industry initiatives and targets through focused, tech-enabled work streams
- Rule-based collateral calculations generated automatically based on recorded CSA/MA clauses
- Weekly / Monthly / Quarterly metrics highlighting the top collateral securities and counterparties with movement in credit ratings
- Dashboard displaying number of trades resolved/open – updating client on regular basis
- Liaising between client’s teams and CPs facilitating resolution
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