The list of clients for Lombard Risk’s Colline platform is on the rise. What’s the formula to this success?
The introduction of regulation for the uncleared over-the-counter (OTC) market caused many organisations to review their operational processes and consider what cost efficiencies could be found. Colline’s cross-asset functionality, on a single platform, which can be installed or hosted in the cloud, has proven to be beneficial in creating straight-through processing gains, silo reductions and infrastructure savings.
By working closely with our client base, regulators and major market participants, Lombard Risk continually adds relevant, critical functionality. The Colline solution and its team of dedicated collateral professionals strive to support its users with their needs of today as well as their requirements for tomorrow.
Lombard Risk is also adding on new features to Colline, such as a new exchange-traded derivatives module. What are the drivers behind this?
Our vision is to achieve enterprise wide-collateral and margining across all asset classes. Colline was originally developed as an OTC platform, but extended to include repo, OTC clearing, securities lending, and exchange-traded funds clearing. The addition of the exchange-traded derivatives (ETD) module was an obvious extension.
With the move towards more regulation in the uncleared OTC space, many clients, particularly on the buy side, were expressing interest in an ETD offering and asking whether we were prepared to support their requirements as they consider both OTC clearing and ETD offerings. The release of this module in Colline V15, which was delivered in January 2017, has seen several clients begin implementation.
Where will Colline going from here? Are new markets or services on the horizon?
We have an aggressive plan for delivery of additional functionality across all asset classes over the next 18 to 24 months as more regulation comes into force.
The deadline for updating master securities forward transaction agreements, due to stricter controls around to-be-announced trade margining, is scheduled for December 2017, while the second Markets in Financial Instruments Directive deadline is scheduled for January 2018.
As such, clients are requesting support in streamlining and automating processes as well as insisting on a greater level of interoperability among providers.
Additionally, there are many new participants in the market, especially multinational corporations that are now subject to these regulations. As a result, volumes continue to increase and the need to focus on control and operational efficiencies continues.
What are your clients highlighting as the biggest challenges they face?
Undoubtedly, regulation and the burdensome operational impact with the associated documentation requirements are creating the biggest challenge at present. This is true for buy-side clients that are still in the midst of putting the appropriate legal documentation in place.
Other challenges include streamlining of workflows to assist with increased volumes and complexities and ensuring the end to end connectivity for daily activities.
Are tight regulatory deadlines coupled with back-office budget cuts to be the primary reason for the rise in interest for Colline’s services?
It’s certainly a major factor, however, we have also seen an increase in the number of organisations looking to eliminate silos and provide consistent margining functionality to their own clients and counterparties—hence the need for a single enterprise-wide platform supporting multiple asset classes.
Colline’s modular approach enables clients to select the functions they require and adapt as their business grows or changes.