SunGard Identifies Five Key Trends in Collateral Optimization

SunGard has named five key trends to help financial institutions find cost savings and competitive advantages through effective collateral optimization:

– The buy side is also focusing on collateral optimization, and institutions are actively looking to build or buy new technology;
– Manually ranking assets based on preferences can no longer deliver optimal collateral allocation results; in a survey conducted by InteDelta and SunGard, only 3% of respondents reported that their collateral optimization process is “advanced” or “fully automated”;
– Firms that address the challenges of real-time data aggregation to gain a full view of collateral inventory will better achieve collateral optimization;
– Firms that choose an effective collateral optimization approach can align the true cost of collateral with the allocation process to develop a competitive advantage; and
– Firms are taking into account the cost of collateral in their trade pricing to ensure the true economic cost of the deal is reflected in the pricing, and as a result, collateral will continue to play an important role in trading activities for financial firms.

The full report can be downloaded here.