CMF: "SaaS solutions are key for reducing costs" speaker says
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CMF: "SaaS solutions are key for reducing costs" speaker says 15 October 2019Amsterdam Reporter: Maddie Saghir
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Software as a service solutions (SaaS) can provide operational and economical workflow optimisation, which will be a vital piece of the puzzle for reducing costs for regulations such as the Securities Financing Transactions Regulation (SFTR), says a Fleming Collateral Management Forum banking panellist.
Massimo Salerno, director of treasury and risk services centre at Cecabank, gave a presentation on global collateral management and SFTR and provided a holistic point of view on collateral management for securities finance and derivatives transactions.
SaaS is a method of software delivery and licensing which allows participants to access the software online via a subscription as opposed to being bought and installed on individual computers.
Salerno said that as well as reducing costs, SaaS can free up business units to invest in higher-value tasks. “This allows users to concentrate on their core business,'' he told conference delegates.
Additionally, Salerno noted that SaaS can help achieve economies of scale, which is important from a cost and knowledge perspective.
“We are under a regulatory tsunami and we don't want the user to have to put a lot of effort into the operational compliance,” he continued. “This is why SaaS is important as it can also standardise processes, promote specialisation, improve control and increase efficiency and effectiveness of service.”
Salerno also touched upon further challenges associated with SFTR, which is due to come into force in April next year. He said that he expects the level three guidelines to be released by the European Securities Markets Association by the end of the year.
“SFTR is just a part of as the pillar of the regulation developed by the financial stability board after the global financial crisis, European Markets Infrastructure Regulation (EMIR) was the first,” Salerno continued.
“Then the Markets in Financial Instruments Derivatives was implemented to detect market abuse, and now its SFTR, which aims to try to put lights on so-called ‘shadow banking’.”
Salerno then reflected on some of the discussions made throughout the conference and highlighted that people have been talking about the 155 fields of data that needs to be sent for SFTR.
Salerno explained that out of these 155 fields to be reported to a trade repository, 117 of these fields will be economic and counterparty data, 20 fields will be collateral data, and 18 will be collateral reuse data.
For matching rules, Salerno affirmed that 83 fields will have no tolerance and 13 fields will have small tolerance.
He concluded: “At the moment there is a problem getting the data that is needed to report; different systems and different intermediaries are causing data fragmentation."
"What we are actually doing in our industry is providing so much data at so much cost and this is causing people to be overstretched and it is bringing too much cost for the whole industry.”
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