Collateral management solution of the year: Adenza

Asia Risk Awards 2021

Gil Guillaumey
Gil Guillaumey, Adenza

Adenza – formerly Calypso Technology – is a leading provider of cloud-enabled, cross-asset, front-to-back solutions for the financial markets. Boasting 40,000 users in more than 60 countries around the world, the company has been actively growing its Asia-Pacific base, and now has more than 40 clients across the region. It continues to look to enter new, strategic and fast-growing markets, such as the Philippines, Indonesia and India.

Adenza’s platform for collateral management and margining was designed to provide customers with a real-time, single, integrated and open platform to support a multitude of strategic users, including front office, middle office, risk, treasury, compliance, collateral management, securities finance, clearing, and margining through to post-trade processing, across both cash and derivatives products.

The Adenza collateral management solution assists both buy- and sell-side customers, with its cross-asset scope and integration for middle and back office. The solution supports all types of collateral agreements, enabling clients to manage their collateral within a single solution – including over-the-counter derivatives and exchange-traded derivatives, securities finance, asset-backed securities and mortgage-backed securities, as well as the creation and redemption of exchange-traded funds.

Adenza says that clients choose its platform as a way to solve both classic and new challenges in the industry.

“The first challenge is really to understand the regulatory context, which is driving the sophistication in the field of margin and collateral management, and also in keeping up to date with the regulatory changes,” Gil Guillaumey, head of strategy, capital market solutions at the firm.

[During the Covid-19 crisis], all collateral management systems were put under pressure for accessing inventories: our customers had access to real-time inventory and the back trade

Gil Guillaumey, Adenza

He explains that when you buy software such as the Adenza platform, you also get a complete service, which manages and maintains that software, helping to keep it up to date in addressing the latest regulatory changes.

From a more general margin and calculation standpoint, the Adenza platform helps clients compute the margin, connect with custodians, and handles any issues that may arise when integrating with third parties or tri-party agents. Guillaumey goes on to explain how “everything around the lifecycle of the margin call is completely managed by Adenza on behalf of their customers: the solution is completely managed so they literally just turn the key and get the benefits of all the features”.

The platform is cloud-enabled, and Adenza strives to provide different modalities of distribution to suit the various needs of its clients. Clients can use the solution on-premises, where they implement Adenza using their own architecture, or they can use the cloud solution and outsource the management of the platform entirely to Adenza, or opt for a hybrid mode.

The end-to-end aspect and integrated nature of the Adenza solution makes it stand out in the market. Guillaumey explains how the firm has a truly end-to-end solution: “It’s not only about computing and exchanging margin, it’s really upstream – enabling traders to access the inventory, simulate the impact of the activity before actually trading, hedging, pledging, then offering a single inventory to cover all the margin calls, through to cash and back-office reconciliation, and all the security news of the institution in one place and through one platform.”

He points out Adenza’s resilience during the Covid-19 crisis, when collateral management systems were under great pressure and clients were dealing with massive volatility in the market: “All collateral management systems were put under pressure for accessing inventories: our customers had access to real-time inventory and the back trade.”

Throughout this time, the firm continued to address the key regulatory challenges facing the industry, and clearing house clients in particular were able to use the platform to manage everything around initial margin, making sure the intraday market data was properly collected and backtested.

In July, Calypso Technology merged with AxiomSL, another technology vendor, with the merged unit renamed Adenza. Guillaumey says the integration of the firm into the business will be a key area of focus over the next 12 months.

“We see a lot of potential benefits for our customers by leveraging the native integration between the two solutions,” he says. “Based on Adenza data, customers can transparently run Basel III, Basel IV capital numbers or special drawing rights, net stable funding ratio, which are two areas where the collateral and the data around it is key.”

From a technical perspective, the application programming interfaces will remain a key focus for the next 12 months, as well as Adenza working to integrate with richer ecosystems. The firm is modernising the user interface because it recognises that, as frameworks constantly evolve and the market further digitises, this is what its clients will demand.

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