Collateral Management

 

Collateral management: from experts – for experts

As a financial expert, you need a uniform, central collateral registry and analytics provider. Loxon Collateral Management System enables you to register collaterals at an actual value and to connect them to the related deals. Thus, you can implement a reliable and comprehensive management system supporting the quantification of your credit risks.

  • Provide you with a unified integrated deal and
    collateral registration system
  • Support the entire collateral workflow from inception
    to collection stage
  • Evaluate your collateral portfolio on regular basis
    using sophisticated evaluation models
  • Allocate collateral values to exposures in order to
    minimize RWA, provisions or large exposures using
    mathematical allocation models
  • Calculate coverage on deal, customer, customer
    group level
  • Support your appraisal and physical monitoring
    processes on movable and immovable collateral
    objects
  • Collect, calculate, maintain and provide collateral
    related information necessary for Basel compliance
  • Support automated portfolio revaluation rules
  • Improve data accuracy
  • Inform you about any necessary actions required to
    maintain or periodically update collateral data
  • Bring along several years’ implementation experience
    and best practices
  • Improve the efficiency of your Bank’s provisioning and capital allocation
  • Optimize your regulatory and economic capital requirement by optimizing your collateral value allocation
  • Manage risk concentrations
  • Control your appraisal and physical monitoring processes
  • Ensure appropriate data quality
  • Be fully Basel II/III compliant on collateral side, with a possibility to incorporate your specific regulations as well
  • Segment and analyze your collateral portfolio
  • Implement and enforce standard business processes in collateral management, possibly different by business lines or internal objectives
  • Have your collateral portfolio monitored and revaluated on a regular basis
  • Generate collateral related documents
  • Capture and track property insurance data in the built-in insurance module
  • Rely on our experience and know-how to start walking an implementation journey together
 

How does the Collateral Management System work for you?

The quantification of credit risks can be carried out for you by the Collateral Management System in thorough connection to the banking workflow and in a process oriented approach. The System supports the indirect load of collaterals and deals from primary registry systems (e.g., transmission of shares from the Securities System of the Bank) as well as direct collateral and deal storage.

Providing complex and full range support to the legal collection of collaterals, the Collateral Management System also supports execution of the collaterals connected to defaulted deals and liquidation of bankrupt deals’ collaterals.

The collateral registry handles more than 40 types of collaterals and numerous collateral groups. The software contains real estate and insurance (life and assets insurance) information as well.

One of the most important system features is establishing connections between deals and collaterals in reporting, exposure and bank risk aspects. Having the connection established, the distribution of collaterals to connected exposures takes place in real time.

 

More benefits in collateral management

The Collateral Management System calculates the optimal allocation with a mathematically proven optimal distribution method using deal weights, collateral weights and client weights to provide the highest possible compliance level with domestic and international regulations.

In addition to the built-in collateral value distribution logic, a logical framework helps the incorporation of any arbitrary collateral value distribution method, in order to meet specific requirements of internal or external regulators.

Thus, the Collateral Management System secures sophisticated monitoring of actual collateralized exposures of your Bank at any point in time. This registry constitutes a basis for the periodic reports to be submitted to the supervisory authorities and to your bank’s management. Reports can also be routinely generated with our Collection System software.

Our system for collateral management extensively supports the value date accounting technique required by the accounting standards, thus the accounting date and the validity date of any transaction can be distinguished. Obviously, the four-eyes principle as required by the prudence of banking is also a core feature.

 

Bonus features

The System contains several validations, automatic processes and correction algorithms. Due to the diversity of deal and collateral management algorithms used by the different Banks, the application may be extended by any optional routines.

The parameterization of the application reaches out far from the traditional master data management, i.e. the expansion of the sets of fixed value parameters, by enabling editing error messages and helping messages be displayed on the user interface.

The algorithm parameterization, i.e. the changeability of calculation rules of algorithms, is considered to be a unique system feature. That means that the number of arguments and the function of the calculation itself can be altered run-time, in accordance with the given authorization. Thereby the Loxon Collateral Management System provides full flexibility and adjustment to the changing legal framework and economic rules.

 

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