Baton Systems has teamed up with Citi to help build the bank’s treasury function for cleared derivatives. Baton’s platform will aggregate data from Citi’s banks and custodians and track collateral collected from its clients all the way through to CCPs. In addition, Baton will enable real-time visibility of excess/deficit calculations, collateral posted, and eligibility, haircuts and risk thresholds for specific clearinghouses.
Citi will be able to implement automated rules to optimize the movements of cash and securities to/from clearinghouses, eliminate manual entries into multiple systems, and reduce collateral risk and cut operational costs.
“Our integration with Baton will help drive greater efficiency across our entire collateral workflow process and significantly reduce the risks we typically see with manual intervention,” said Mariam Rafi, head of Financial Resources Management for Citi Futures, Clearing and FXPB, in a statement. “The automation and real-time view of collateral the system provides will enable us to more effectively deploy capital in the right place at the right time.”
“Managing and redeploying cash and collateral has always been critical for safe and economic performance of clearing members,” said Arjun Jayaram, CEO and founder of Baton Systems, in a statement. “As evidenced by the recent bout of volatility, it is even more critical for financial institutions to be equipped with tools that will help them effectively manage their intraday liquidity needs and reduce risk.”
Baton is extending its network across North America, Europe and Asia, and is in the process of expanding its office in New York and India.