SIX Securities Services adds US equity and fixed-income securities on the CO:RE trading platform
Research reveals real-time settlement is critical for collateral optimization.
83% of financial organizations say real-time settlement is the most important factor when choosing a collateral management provider.
Research from SIX Securities Services reveals the importance of real-time settlement when it comes to choosing a new collateral management provider. Four in ten (40%) respondents report that their organization has replaced or added a new collateral management provider in the last 18 months, with a further 18% in the process of doing so. Real-time settlement was viewed as the most important factor during the selection process (83%), followed closely by central counterparties (CCPs) collateral acceptance (75%), real-time reporting (63%), flexibility to meet regulatory changes (54%), and transparency of collateral pools regardless of whether collateral pools are published (25%). Only 21% of respondents cite cost as an extremely important factor when deciding to choose a new provider.
The views between IT decision-makers and collateral management experts differ slightly. All collateral management experts cited real-time settlement as the most desired feature, while only 73% of IT decision-makers agree. The biggest gap between IT decision-makers and collateral management experts shows in the question on collateral pools: 7% versus 56%, respectively, of respondents consider it extremely important when moving to a new collateral management provider.
Those who retained their current collateral management provider say their reasons for doing so come down to IT interfacing problems (61%), closely followed by the complication element (55%), and the length of the on-boarding process (55%).
About the research
The study surveyed 60 professionals in the UK, Germany, France, the Nordics and Switzerland. 30 respondents were IT decision makers and 30 collateral experts from buy-side and sell-side financial services institutions. The number of respondents from buy-side and sell-side organizations was evenly split with 30 respondents from each. The average value of respondents’ organizations’ assets under management is USD 323 billion.