In the current regulatory environment, it is essential that organisations have access to systems that address their needs across three key dimensions, namely proven and stable, secure and easily accessible.
In recognition of the above drivers, SmartStream has developed its Collateral software-as-a-service offering (SaaS) to address these specific challenges.
Proven and stable
The SmartStream Collateral solution has been developed with leading global financial institutions to provide industry-leading control, compliance and cost control. It is now available in the cloud with SaaS deployment. It continues to aid our clients to meet time-critical regulatory deadlines, but with reduced costs associated with hardware, maintenance, installation and upgrades. Clients will experience rapid implementation and upgrades while having access to Transaction Lifecycle Management (TLM) Collateral’s proven best-in-class, feature-rich functionality. This includes end-to-end workflows and connectivity to handle not only the Uncleared Margin Rules (UMR) but also complex scenarios of regulatory arbitrage. Unlike the more traditional modes of deployment, this model is vastly cost-efficient to the end client.
Rapid upgrades: TLM Collateral is developed using the agile methodology of software creation. As such, production-ready software is available every two weeks. However, we do not force our clients to take every upgrade as we understand that there is due diligence testing that our clients may need to do before taking an upgrade. Our clients can opt to take a release only when it suits them. TLM Collateral SaaS is fully aligned with our clients availability and timing.
QA testing as a service: The quality of our software is very important to us. We understand that software issues not caught during development can cause a lot of wasted time and disruption not only to our clients but to our process as well. We also have to maintain the confidence of the financial institutions that rely on us to ensure that they are in compliance with regulations. To that end, we use test-driven development as part of our agile process.
We run thousands of automated test every time our software is checked in, and we collaborate with our clients to incorporate their tests into our builds. Importantly, we publish those tests results to our SaaS clients so that they can see how things change, reduce their testing effort, and use it to satisfy their internal compliance needs. For clients who have more specific needs, we can supply personnel who can test on their behalf using their scenarios on their test data shapes. Our clients benefit from our rigorous user acceptance testing (UAT) regime, which reduces internal costs, builds confidence, and shortens time to market.
UAT environments: We supply client-specific UAT environments where important data is not commingled. Clients can have access to our latest builds to test and see our latest software enhancements. These UAT environments allow clients to get first sight of what is going on, provide feedback and perform their own testing should they desire to do so. Given that the data again is stored in separate databases for each client, there is no risk of competitors accessing or accidently seeing that test data.
Support: The TLM Collateral Support members have been with the company for more than 10 years now and know our product and clients very well. They are able to help our clients with the software and be a conduit for new sources of functionality for our product managers. SmartStream has been providing SaaS on the cloud since 2009 and has a diverse international client base that includes investment banks, hedge funds, asset managers, service providers and retail brokers with users across the globe. We provide hosting that in various locations across the world so that we can comply with any local regulatory requirements. Our Singapore clients who are supervised by the Monetary Authority of Singapore can fully comply with local regulations to host within Singapore, whereas our European clients can fully comply with the General Data Protection Regulation requirements because we can host in Europe for them.
Leveraged expertise: SmartStream has an innovations lab which pioneers artificial intelligence (AI) and machine learning applications. TLM Collateral clients benefit from the innovative efforts of our data scientists as they collaborate with our product experts to bring online practical strategies for collateral management.
SmartStream is always looking at improving and incorporating innovative technologies and practices to improve the user experience and we envision ourselves as a company that continually invests to provide quality software for our clients.
Secure segregated data
In an effort to provide cloud-based solutions in a cost-effective manner, most cloud offerings take advantage of comingling data and consequently rely on inherent application and database security to protect the data assets of their customers. SmartStream has chosen a different approach for the collateral solution and intentionally segregates each client’s data in a totally separate database. Our clients in the financial industry all understand the dangers of data breaches where proprietary data might be accidentally shared or seen by another party or competitor. SmartStream takes the security concerns of our clients as being paramount, particularly in light of recent breaches in comingled cloud incidents.
Security
The OnDemand (SaaS) team operate with a robust information security framework. They have intrusion detection systems, distributed denial of service protection, and all appropriate web application firewalls. Furthermore, each and every client instance is fully hardened and client’s environments are regularly scheduled for penetration testing. SmartStream is ISO27001 certified. We also have SOC1 Type 2, SOC2 Type 2 and SOC3 certification and are compliant with the latest European Banking Authority regulation around the requirement to perform audits on the physical locations of the data centres.
We partner with AWS, the largest cloud services provider with the most mature product offering like AWS Shield and AWS Cloudwatch. This means we can offer instant scalability and active disaster recovery management. With our experience in cloud deployment comes robust business continuity planning procedures and disaster recovery tests which are run on a regular basis. Our data centre staff comprises of certified AWS practitioners with years of experience. Clients no longer have to worry about the daily management of the platform as that is transferred to SmartStream. SmartStream provides the management of the hardware, reduces the need for local DBAs, and reduces the need for application support personnel. All of this allows our clients to focus on running their business and revenue generation while they leverage our expertise to help lower costs and risk.
Easily accessible
By providing our solutions in association with AWS, we provide our clients with quick and easy access to an environment that satisfies their control, compliance and cost requirements. Furthermore, it gives access to a mature and battle-tested collateral system that meets all regulatory requirements and is connected seamlessly to the market
Connectivity: The collateral environment today requires connectivity to the whole OTC derivatives ecosystem. We partner with companies and service providers to provide agreement creation services, standard initial margin model and sensitivity calculation services, margin call messaging services, reconciliation services, and clearing services. We also have public application programming interfaces that enable our clients to seamlessly connect TLM Collateral to their upstream and downstream internal systems permitting essential straight-through processing and automation.
Compliance and UMR: TLM Collateral is up to date with all the required functionality for The Basel Committee on Banking Supervision and the International Organization of Securities Commissions Uncleared Margin Rules including Phase 5 and Phase 6. Our experienced product managers who comprise of former industry practitioners participate and speak at various working groups, industry conferences while soliciting feedback from both our buy and sell-side clients to build consensus around interpretation and execution of these regulations. The software has best in class workflows, as well as a sophisticated agreement warehouse allowing for complex variation margin and initial margin agreements with advanced eligibility and concentration limit features. Complex trade matching rules can be accomplished efficiently and templates of agreements can be stored to quickly onboard similar credit support agreements. TLM Collateral is not limited to uncleared over-the-counter derivatives, as we also support cleared derivatives, as well as repo and stock borrow loan. There are also advanced reporting and management information dashboard capabilities to help monitor and report externally and internally.
Don’t settle for second best
Collateral management is a business-critical function. If not done correctly it can affect a firm’s reputation and its bottom line. Firms should insist on the best. Do not accept commingled data. Do not accept poorly tested software. Do not accept forced upgrades. Furthermore, do not accept limited functionality, speak to SmartStream.
