Share these talks and lectures with your colleaguesInvite colleagues
Banking book collateral transformation
As banks strive to find ways to increase profits against headwinds that include continued low interest rates and intensive regulation, they are compelled to look within all areas of the organisation for efficiencies that result in cost savings. Fierce competition from traditional competitors and the emergence of financial technology (Fin-Tech) in traditional banking areas are further pushing organisations to reduce costs, eliminate credit risk loses and optimise capital utilisation. For too long, commercial and corporate lending (‘banking book’) businesses have been hampered by manual processes, fragmented systems and multiple data sources. As a result, banking book lending is exposed to increased operational and credit risk and inefficient business decision making — impeding their ability to scale efficiently and therefore eroding profits. Loan collateral mitigates credit risk while also providing the opportunity to mitigate pressure on banking book performance through efficient use. To achieve these goals, however, automated and holistic collateral management operations are mandatory: to, specifically, reduce counterparty and operational risk; eliminate manual processes; improve capital efficiency and provide the accurate datasets required for capital reporting and management. Transformation to an automated and holistic banking book collateral management operation also enables the deployment of digital technologies including machine learning (artificial intelligence) and distributed ledger technology, adding further to the potential to improve risk management, operational efficiency and scalability across the banking book.
The full article is available to institutions that have subscribed to the journal.
Manan Shah joined PwC in 2011 and he is a senior Manager in PwC’s Banking & Capital Markets management consulting practice. He has more than 10 years of experience as a practitioner and consultant in strategy, process and operations consulting for large and mid-size buy side clients, broker dealers and custodian firms. He has successfully led multiple large and complex projects in areas of collateral management, derivatives processing and settlement netting and leading financial institutions. Prior to joining PwC, he worked for technology departments at Lehman Brothers and Barclays Capital. Manan holds an engineering degree from Mumbai University, India. In addition, he holds two Masters degree with a Masters in Business Systems Analysis and Design from City University (Cass Business School), London and a Masters in Information Systems Management from Carnegie Mellon University, USA.