Redefining Collateral Mobility
Challenge
- Managing collateral across multiple locations and time zones is subject to a “spaghetti mess” of operational frictions and inefficiencies that result in staggering bottom-line costs.
- Cost drivers:
- Excess HQLAx buffers
- Optimization constraints
- Counterparty credit risk
- Operational risk
- Settlement costs
Solution
- Collateral management has truly become a strategic differentiator for firms that can do it well.
- HQLAX is a private permissioned digital ledger that facilitates the ownership transfer of securities whilst avoiding cross-custodian movements.
- Our proprietary platform is unique in coupling the benefits of DLT with legacy triparty and custody infrastructure services, making it easy for clients to improve collateral mobility without “big bang” change requirements.
- Cross-custodian movements consume intra-day liquidity and create settlement risks. Estimated cost savings for a global bank using HQLAX to enhance its collateral management activities are between €50-100 million per year.
Results
- Lower excess HQLAX buffer
- Full optimization
- Mitigated counterparty credit risk
- Reduced operational risk
- Lower operating costs
Why Corda?
- Chosen for its transparency, risk compression and privacy, as well as it being an established enterprise platform
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