How much are operational inefficiencies costing your business?
A new survey from Accenture and Clearstream found that the financial services sector could save more than €4 billion (about $5.5 billion) annually in collateral management costs by addressing operational inefficiencies.
Clearly, collateral management has become a critical industry issue because 1) regulators have set more rigorous capital and liquidity standards, and 2) banks are confronting new cost and growth challenges in the wake of the global financial crisis. Done right, however, efficient collateral management can free up liquidity for banks, enabling them to meet new regulatory requirements while offering more products and services.
According to the Accenture survey, banks’ key collateral management challenges include:
- An incomplete view of all collateral and an inability to manage holdings centrally
- Suboptimal internal governance leading to a misalignment of objectives
- Inadequate internal transfer-pricing mechanisms
- A lack of optimization engines or the ability to deploy them effectively
- Inability to perform inventory projections
- Excessive staff costs as a result of process complexity
The highest potential cost savings, according to survey respondents, can be achieved by: (more…)