Broadridge Financial Solutions has beaten its deadline to bring collateral management products based on Lombard Risk Management’s technology to market and set out plans covering development of the product line.
The company made its alliance with Lombard Risk public at the end of March 2014 and said products would follow at the end April or early May, but in a shorter timeframe it has introduced CollateralPro, a global solution with an optional optimisation module that can be either licensed for in-house deployment, integrated with Broadridge or other vendor systems, or used as a managed service. Commenting on the accelerated timeline, Jerry Friedhoff, managing director of Securities Financing and Collateral Management at Broadridge, says: “Many market participants are making decisions on collateral management so there was no time to waste in bringing our solutions to market.”
Broadridge’s first CollateralPro module is available immediately and builds on the knowledge invested in its FinancePro securities financing solution and Lombard Risk’s OTC derivatives capability to deliver a collateral management solution covering fixed income and OTC derivatives. A second module, which is due to be delivered within the next three moths, will cover equity securities lending and repo business. Longer term, Broadridge has a foreign exchange collateral management solution scheduled for release in early 20145 and has put exchange traded funds on the roadmap it shares with Lombard Risk.
The company suggests CollateralPro improves on solutions from other providers by being real-time rather than batch operated, and based on a single global database rather than multiple regional databases. These aspects allow firms to manage and allocate assets globally while meeting the requirements of local regulation.
Friedhoff expects the addition of CollateralPro to Broadridge’s global infrastructure and support network to be attractive to global clients that could benefit from a single vendor solution. He also sees traction beyond the company’s traditional sell-side client base and explains: “We are experiencing interest in CollateralPro from buy-side firms that are interested in collateral management. These firms are outside our usual client base and include asset managers and insurance companies that must collateralise their assets and mitigate counterparty risk on a daily basis.”
Returning to market participants’ decisions on collateral management solutions, he concludes: “We see a lack of confidence around collateral management with issues being raised around regulatory change, profitability and options on technology solutions. Broadridge is in a good position to resolve these issues and remove the lack of confidence and risk in the collateral management space.”