In the ongoing climate of growing interest rates, “market participants are placing a renewed focus on collateral management,” stated Priya Sharma, head of data and connectivity at Clearstream, in a press release. Looking closer at the subject, the Luxembourg-based firm developed the solution after observing that traditional manual processes lead to more inefficiencies, higher costs and errors, and that more could be done to increase collateral capacity and to grab potential revenue gains if these hurdles were addressed.

The Collateral Mapper features a dashboard summarising a set of reports on collateral usage, and provides a complete view of the user’s collateral position. It also relies on historical data to create an overview of present and future positions, and end-of-day data updates to ensure that the latter are as accurate as can be. The aim: “enable [users] to maximise their collateral pool across different asset classes,” said Sharma.

“In these challenging times when your high-quality assets are scarce and liquidity is decreasing, we need to ensure that resources are used to their maximum potential,” Clearstream stated. The dashboard should identify where there is space for inventory rebalancing that could lead to gains.

“Providing our clients with reliable and scalable state-of-the-art solutions that reduce the frictional costs of trading through transparency and automation is core to our collateral management strategy,” said Marton Szigeti, head of collateral, lending and liquidity solutions at Clearstream, in a statement.

Clearstream is the Deutsche Börse Group’s international central securities depository. In 2022, the firm developed a tool to automate collateral management that relies on artificial intelligence to support the definition of intelligent eligibility criteria for collateral baskets.