Transcend Hires Former CTO of ENSO Financial

Kayur Parekh to lead expansion of Transcend’s technology
for the buy-side

NEW YORK, NY (January 24, 2020) – Transcend, a leading provider of real-time collateral and liquidity optimization technology, has hired Kayur Parekh to join Transcend’s technology leadership team. He will focus on accelerating Transcend solutions and capabilities on the cloud and refining the solutions for the buy-side. Parekh brings more than 18 years of technology and financial markets experience.  

Before joining Transcend, Parekh was Chief Technology Officer at ENSO Financial, a leading SaaS-based solution company providing insights and analytics to the buy-side and prime brokers. At ENSO, Parekh spearheaded the technology transformation of the next generation of ENSO solutions focused on cloud and microservices based architecture. Prior to ENSO, Kayur held a number of impactful roles including Senior Technology Director at NEX (now part of CME Group), Senior Solutions Architect of the initial technology platform at Transcend, and Senior Vice President at Citi, where he implemented and managed trade capture and STP systems.

“Transcend is experiencing explosive growth for our analytics, optimization and regulatory solutions,” said Bimal Kadikar, CEO and Founder of Transcend. “I have known Kayur for years and his expertise in developing advanced, scalable systems on the cloud and for the buy-side will accelerate our strong technology capabilities and momentum.” 

“I look forward to joining Transcend and leveraging my extensive experience in delivering state-of-the-art technology for cross-asset collateral, funding and liquidity management,” said Parekh. “I am excited to work with the talented Transcend team to help solve our clients’ complex challenges.”

A Connected Collateral Ecosystem

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Recent advances in collateral management technology – from algorithms to advanced analytics – are revolutionising the opportunities available to firms seeking optimisation at an enterprise-wide level.

Firms are increasingly realising the advantages of adopting a more centralised and harmonised approach to managing collateral, and utilising the latest software solutions to inform decision-making. Bimal Kadikar, CEO at Transcend, says: “Forward-looking firms have recognised that optimising collateral and liquidity across an enterprise, as well as within business areas, can drive efficiencies and deliver wider strategic benefits.” Read more

Collateral in 2020: Driving Optimization in an Evolving Ecosystem

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In this Global Investor Group Special Report, Collateral in 2020, Bimal Kadikar outlines the steps firms can take to optimise collateral at an enterprise-wide level and explains how a connected collateral ecosystem can be utilised to inform decision-making. Read more

Connected Data: The Opportunity for Collateral and Liquidity Optimization

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The function and definition of collateral and liquidity optimization has continued to expand from its roots in the early 2000s. Practitioners must now consider the application of connected data on security holders to operationalize the next level of efficiency in balance sheet management. A guest post from Transcend. Read more

Finadium report on ISDA’s Common Domain Model and the Digitization of Collateral

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Finadium recently spoke to Bimal Kadikar, CEO of Transcend, regarding the adoption of ISDA’s Common Domain Model (CDM) by market participants. Finadium’s new report, published by Josh Galper, Managing Principal, evaluates the role of CDM to solve business problems for collateralized trading markets and its potential to standardize data elements across the derivatives lifecycle. Bimal commented on the pace of industry adoption:

Read more

Centralized collateral management becoming a reality

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Collateral management has transitioned from an ancillary service to a core competency, largely as a result of the sheer breadth of activity from front to back office and horizontally across silos and asset classes. This has spurred a marked shift towards centralization of collateral management, providing organizations with a centralized view of inventory as well as funding and collateral optimization decisions.

But the move to a more efficient and centralized model is not without challenges. Inefficiencies and the cost of errors are magnified by the multiplicity of internal and external relationships that need to be managed and the requirement to control positions more frequently, even in real-time.

This requires a fundamental shift from managing assets only for margin purposes to managing assets for value, cost and balance sheet purposes.

Moving to a centralized collateral organization is a difficult step for many reasons and as a result, some firms are decoupling their business organization from their technology capabilities.  They are instead focusing on building a centralized, horizontal technology strategy for inventory and collateral management.

In either case, the end goal may be the same – a holistic infrastructure that can yield the benefits of centralized collateral and inventory management coupled with sophisticated analytics and firm-wide optimization capabilities. Fortunately, today’s technology enables this ultimate goal as well as the smaller moves in this direction.

Steps to collateral optimization

Regardless of the approach taken, there are a number of best practices for firms looking to increase the efficiency of their collateral and liquidity management:

  1. Achieve visibility into inventory across multiple business lines and regions. This centralized view is extremely important.
  2. Ensure all collateral schedules and legal agreements are easily accessible as these will impose constraints on decision-making.
  3. Take a centralized view of different types of obligations and requirements to enable good decision-making.
  4. Establish targeted analytics and Key Performance Indicators (KPIs) to measure and monitor progress of these initiatives.

These are vital foundational steps towards achieving an optimized collateral management environment.

Connected data: The key to better decision-making

Of course, bringing the data together is just one part of the process – the next step is to connect the data so that algorithms and analytics can be applied to it. Firms understand that the information is there for them to make better decisions, but they face a challenge in getting useable information and putting it to work.

The main obstacle, in most cases, is that they have built their operational structures and technology around specific areas of the business. To achieve a view across the whole enterprise, these businesses require coordination and connectivity across a large number of different internal and external systems – not easy to accomplish.

The solution lies in implementing a system that is easy to integrate and is targeted at connecting and harmonizing this data.

Avoiding costly re-engineering

There are sometimes negative connotations around the phrase ‘legacy technology’ but this is not always accurate. A firm’s existing securities lending or repo or margin systems may be good, but they will more often than not have been built as separate systems. Rather than re-engineering all these systems, what the firm needs is a layer that pulls these disparate systems together to ensure they are seeing a holistic and harmonized view of inventory, positions and obligations.

Most firms have taken some steps to improve their inventory management, but there is a wide difference across the industry in terms of the strategies adopted to achieve this objective. Some organizations are trying to address the issue in a tactical way, fixing one system at a time to see whether this gives them greater visibility, but this approach does not have much longevity from a strategic perspective.

The larger organizations have usually taken a more strategic approach. Some see it as primarily an internal engineering effort, while others are talking to firms such as Transcend as they seek to harness real-time data, collateral and liquidity.

Regardless of the approach taken, being able to optimize collateral and liquidity decisions at an enterprise level has huge benefits. The sheer number of firms and analysts that have explored the scale of these benefits underlines the significance of the opportunity, and we find that most firms are actively taking steps towards achieving these capabilities.

Optimization models can be implemented with a rules-based approach or even using more sophisticated algorithms (i.e. linear and non-linear programming models). These all have a vital role to play in monetizing the connected data across the firm.

Scaling the benefits

Being able to optimize collateral across business lines is an obvious benefit, but there are also advantages to be gained from reducing internal errors and fail rates. In addition, funding costs will fall because firms will be managing their funding operations more efficiently: improving securitized funding leads to a reduction in more expensive, unsecured funding.

Whether or not firms embrace centralization across all aspects of their business, it is clear that rationalizing complex systems and harnessing fragmented data sets provides for informed, confident and compliant decision-making. And once centralized funding and collateral management are fully achieved, the benefits of efficiency, cost-savings and liquidity attain even greater scale for the firm.

This article was originally published on Global Investor Group.

View and/or download Article PDF

In five years, 90% of funding will be done by machines

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You may disagree with the number of years or the percent, but everyone understands that automation in the funding and collateral space is occurring at a fast pace. The question is how you prepare for this inevitable future? Our view is that connecting data from disparate sources is the key to the next evolution in the funding markets. A guest post from Transcend. Read more

Transcend shortlisted for FTF News Technology Innovation Awards ‘Best Collateral Management Solution’

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As firms look for ways to increase efficiency and reduce risk across the business, collateral often remains gridlocked. Transcend’s Collateral Management & Optimization solutions help firms completely redefine how they manage collateral – leading to increased liquidity, lower costs and greater compliance.

In recognition of our innovative approach, FTF has shortlisted Transcend for ‘Best Collateral Management Solution’ in the FTF News Technology Innovation Awards 2019, which celebrate noteworthy progress and achievements in operational excellence over the past year.

You can help decide who wins by voting here – look for Transcend Street Solutions in category 7, ‘Best Collateral Management Solution’. Voting closes on April 12.

Many thanks for your support!

Collateral management: A path littered with obstacles

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As collateral rules have grown in complexity, so has the need for greater optimization – But as Tim Steele [of Funds Europe] discovers, achieving that can be painful.

Collateral has long been used as a tool for mitigating counterparty risk and obtaining credit, but now more than ever, it is the key determinant of an institution’s ability to engage in financial transactions in the cash or derivatives markets….

“If you optimize every pool or silo individually, as a firm you will by design not be optimized,” says Bimal Kadikar.

Read the full article from Funds Europe

QFC Recordkeeping Compliance: Top 5 Challenges, and Even Greater Benefits

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With 2019 upon us, the first deadlines for banks to comply with the QFC Recordkeeping regulation are just around the corner. The final rule, detailed under the Dodd-Frank Act, will provide US regulatory authorities visibility into firms’ financial exposures and counterparty relationships to reduce the market risks and potential impact in the case of a major institution failing. Read more