What are the most effective ways to use technology for collateral optimization?
Collateral optimization is the process of minimizing the cost and maximizing the efficiency of using assets as collateral for financial transactions, such as derivatives, securities lending, or repo. Collateral optimization can help reduce funding costs, improve liquidity, mitigate counterparty risk, and comply with regulatory requirements. However, collateral optimization is not a simple task, as it involves multiple factors, such as asset availability, eligibility, valuation, allocation, substitution, and transformation. Therefore, technology plays a vital role in enabling and enhancing collateral optimization. In this article, you will learn about some of the most effective ways to use technology for collateral optimization.