Collateral and limit management: Exposure monitoring for US commercial bank

  • 100% adherence to credit policies

  • 40-50% reduction in collateral management costs by improving efficiencies

  • Early warning mechanism established to identify exposure collateral

  • 18-20% more client-facing time


CLIENT CHALLENGES
  • Risk events due to miss in generating early warning signals
  • Inconsistent methodologies followed by staff leading to inaccurate collateral tracking
  • Manual process leading to inefficiency and ineffectiveness
  • Talent management and knowledge retention issues, with 50% attrition in a single month
OUR APPROACH
  • Conducted a detailed white-boarding session to identify business requirements in order to provide client with an advanced collateral and margin offering
  • Analysed and documented current collateral and margin processes across business streams and products
  • Coordinated collateral and margin projects with change teams from different functions, e.g. Treasury, Risk Management and Client Management
  • Set up a pyramid-based offshore team considering the complexity of work
IMPACT DELIVERED
  • Prepared detailed standard operating procedures to ensure compliance with credit policies and client processes
  • Standardised approach to collateral tracking, with room for borrower-specific adjustments
  • Established an end-to-end collateral management programme covering perfect lien, collateral analysis, covenant validation and limit availability analysis
  • Provided project management support to the Global Collateral and Limit Management Teams with management reporting and customised dashboards for exposure management to mitigate risks and issues
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