Automating Collateral Management Processes for T+1 Transition

This document is a technical report discussing the automation of collateral management processes in light of the upcoming transition to T+1 settlement for US securities, effective May 2024. It outlines the potential impacts on firms' existing collateral management systems and emphasizes the need for improved efficiency, accuracy, and timeliness. The report details the current state of banks' automation efforts, highlighting that some institutions have fully automated their processes while others still rely on spreadsheets. It identifies key challenges firms face, particularly regarding system interoperability and the manual aspects of collateral management. The report also describes the necessary functions of a collateral management system, including trade-related data automation and efficient fails management. Additionally, it presents SmartStream's solutions, such as APIs for real-time data exchange and automation utilities that enhance the margin call process, ultimately aiming to streamline settlements and improve operational efficiency.