centred ecosystem of best of breed providers around collateral management, by partnering with solutions such as SmartDX, Elixium & the DTCC to offer clients true front to back processing from legal agreement negotiation, trading & execution through collateral margining to settlement. Accordingly, in July 2017, Lombard and Smart Communications (involved in automating trade and relationship document
generation, collaboration and processing in the capital markets) joined forces to deliver end-to-end automated legal negotiation and margin call management, which enables data to be extracted from agreements negotiated in the SmartDX™ documentation solution and passed through to Lombard Risk’s COLLINE automated cross-asset collateral management platform. In August 2017, Lombard partnered with Elixium, a secure all-to-all marketplace, to create an integrated solution for Repo (Repurchase Agreements) trading and collateral management. In September 2017, DTCC-Euroclear Global Collateral Ltd (GlobalCollateral), a joint venture of Euroclear and The Depository
Trust & Clearing Corporation (DTCC), and Lombard Risk announced a multi-phased alliance that commences with agreement to link GlobalCollateral’s Margin Transit Utility (MTU) with the Lombard Risk COLLINE solution. Under the alliance’s first initiative, Lombard Risk COLLINE users will be able to access MTU message statuses directly from their user interface, enabling a straight-through collateral management process across all asset classes – from entering trades and positions, to managing the issue and receipt of margin calls, to matching collateral transactions in COLLINE and seamlessly submitting them for settlement in MTU. The integrated offering claims to improve efficiency in the daily workflow across multiple systems, reducing manual procedures, promoting data accuracy and increasing visibility in the collateral management lifecycle.
User experiences
Lombard Risk Management claims over 20 of the world's top 50 banks among its clients. This includes nearly half of all UK-based banks. A notable win was Fortis Investments in October 2007, which selected Colline to automate its collateral management space. Fortis began its search for a solution in June of the same year
and, according to Lorie Fairbrother, vice president of marketing at Lombard, required three key functionalities which Lombard was able to provide: flexible coverage of trading instruments for Fortis' wide range of clients; ease of use; and a background of expertise in collateral management. Fairbrother stressed that Lombard's team were ex-collateral management practitioners themselves, so 'have a keen understanding of collateral management from the ground up'. Moreover, Lombard was able to offer an implementation time of eight to twelve weeks, which Fairbrother described as 'a huge selling point'. Fortis was live with Colline before the end of 2007. In summer 2011, the vendor signed one of its largest deals for the end-to-end Colline implementation, at Société Générale Corporate and Investment Bank (CIB). It was expected to generate revenues in excess of £2 million ($3.2 million) in the first two years. The deal was won against Algorithmics, Sungard and Omgeo. SocGen CIB took Colline to support major financial product sectors, comprising OTC derivatives, repo and securities lending, as well as for full clearing and MIS reporting. The system was to be rolled out across six countries in Europe, Asia and the Americas to replace the bank’s home-grown software. Colline was taken to cover the full range of collateral management operations and would be integrated with both upstream and downstream systems at SocGen CIB, said Helen Nicol, Colline product director at Lombard Risk. This was one of the largest deals for Colline, she added.
'The bank was looking for a company that could work with it on a global basis, provide support on both technical and business sides, and also understand the integration process,' said Nicol. The latter, in her view, was a crucial aspect, as a collateral management solution has to collect the exposure
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data from the upstream systems (e.g. clearing house and trading software) as well as other market data such as credit ratings, FX and interest rates. The system then has to process it and make calculations and feed the data to downstream systems (e.g. GL, credit system and settlement engine).
In H2 2010, State Bank of India's (SBI's) subsidiary in the US selected REG-Reporter, having first moved away from the REG-Reporter regulatory software a few years before onto the FRSGlobal system. Raniere attributed the bank's decision to the desire to 'go local'. Other international locations of the bank under the FRSGlobal licence would continue to use it, FRSGlobal told IBS. REG-Reporter was interfaced to Infosys' Finacle (SBI's standard core banking system for international operations) and rolled out across the bank's three US locations in New York, Los Angeles and Chicago.
Other deals in REG-Reporter's traditional US international
operations sector have continued to come in since the business was bought by Lombard, one example being Bank Leumi in the US in mid-2013. The same goes for the STB-derived Reporter, with continued traction in the UK, such as at West Bromwich Building Society and Leeds Building Society in early 2013. Corep was cited as a driver for both wins. Leeds BS was a new-name for the vendor, with the Society
previously running its regulatory reporting on an in-house system. Reporter was taken to underpin a consolidated regulatory and MIS reporting solution at Leeds. It decided to turn to a specialist provider to comply with the pending regulatory changes in a cost-effective way, said Robert Markham, head of Reporter sales, EMEA, at Lombard Risk. It also wanted to minimise operational risks associated with an in-house development (particularly heavily relying on key individuals within the organisation). 'It saw our solution as a far more robust and flexible option, able to support them over a longer period of time. Also, it saw an opportunity of working with a vendor that has a lot of experience in understanding regulatory change and delivering software to meet it.' The first delivery was expected 'within weeks' of signing the contract. Reporter has been interfaced to Sungard's Ambit Treasury Management/ Quantum treasury software and the Tieto-derived Summit core system from Sopra Group Solutions UK.
Risk Management Systems & Suppliers Report |
www.ibsintelligence.com
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