Milan, January 10, 2013 – CeTIF and TAS Group have completed their joint research, “Collateral Management: strategic and operational implications”. The study, involving 11 intermediaries operating in Italy, aimed to investigate the use of collateral to minimise risk in OTC derivatives negotiation and its more recent application in interbank liquidity management.
The research shows that all intermediaries involved in OTC derivatives rely on Collateral Management to mitigate counterparty risk and over 80% of them use it regularly in the majority of their transactions.
The use of collateral for liquidity management still has room for growth, as only 55% of intermediaries use collateral to improve funding operations and 27.5% for lending purposes. The main advantage gained by banks is the ability to collect more liquidity with lower funding and transaction costs.
The survey shows that the growing importance of Collateral is leading financial institutions to rethink the organisational role of the Collateral Manager; evolving from supporting function to a central role whose mission is to improve core business performance.
Information Technology emerges as a key area for improvement, enabling:
reduced operational costs and risks; reduced settlement costs and risks; evolution of the organisation towards a more integrated model.
These goals can be achieved through the implementation of more integrated IT systems, including even external triparty services, that reduce manual intervention and provide a single view to all organisational units which can be personalised according to their needs.
CeTIF promotes researches on the dynamics of strategic and organisational change in the financial and banking sector. Every year it manages more than 15 Competence Centre and workshops, attended by the 8,000 professionals who take part in the CeTIF network. International research projects are also provided, in collaboration with leading universities and industry experts. CeTIF institutional partners include: Bank of Italy, ISVAP, ABI, ANBP, ANIA and CONSOB. CeTIF is a founding member of FIT: European Association of research on finance and information technology.
TAS Group, listed on the Italian Stock-Exchange, provides software solutions for cards, payment systems and financial markets. TAS Group is an international group and serves Central Banks, major banking groups, leading processors and some of the world’s most renowned broker dealers.