IN THE RIGHT PLACE, AT THE RIGHT TIME.
By Philippe Chambadal, CEO, SmartStream
SmartStream, the global software and managed services provider can boast more than 1,500 customers, including more than 70 of the world’s top 100 banks alongside the world’s leading asset managers, custodians and broker dealers. In this presentation SmartStream outlines both the acquisition and implementation of a collateral management solution into their suite of services.
In February, SmartStream acquired Algorithmics’ Collateral assets from IBM, enabling it to address funding and counterparty risk issues for customers from within its own post-trade software suite.
The Algorithmics Collateral package, which has been rebranded TLM Collateral Management, offers collateral lifecycle automation for our 1,500+ buy- and sell-side institutions, custodians and asset servicing customers. It will be integrated with the company’s own post-trade suite of services for cash and intraday liquidity management, corporate actions, reconciliations, data management and exception management.
I believe the integration will give customers a clearer picture of the true exposure of their equities, bonds and derivatives as well as their ability to mitigate counterparty risk and to respond to market changes in real-time. It provides a comprehensive and centralised view across a firm’s front- and back-office as well inventory and various other levels of exposure. I believe that having a consistent definition that both parties can agree to is a ‘must have’. I would add, that in addition to this, one needs to handle corporate actions properly due to the impact it can have on collateral management.
Although the deal may have happened quickly, a move into collateral management had been on the radar for a long time. We knew the product well, so when we were approached we completed the deal in very short order. We were very fortunate to be able to add a best-of-breed product with an impressive client base that was a natural fit with our existing solutions.
Looking ahead, I believe that collateral management is going to be a major utility in the post-trade world along with reference data management and fees and invoice management. The whole process is about managing different counterparties’ collateral, therefore the data and the processing should sit in the middle. This makes it an ideal candidate for a shared service utility and it is hard to imagine how efficiencies and cost reduction for the industry could be achieved if firms undertook the task by building their own, in-house solutions.
As this acquisition and that of Credit Suisse’s proprietary commission fees and expense management software last December show, we are committed to continuously searching for new solutions to develop or acquire, all in an effort to enhance our offerings in the marketplace and to better serve our clients.