Clearstream, a subsidiary of the Deutsche Börse Group, has announced the launch of its collateral management tool, Own Selection Criteria with Automated Reasoning (OSCAR).
The company says the tool was developed in partnership with Brussels-based fintech company Intelli-Select. KU Leuven also collaborated on the development of the tool.
OSCAR Comes With A Lot Of Automation Features
According to Clearstream, OSCAR is the first collateral management tool that will combine different artificial intelligence techniques. These include natural language processing, machine learning, as well as knowledge representation, and reasoning.
The custody firm stated that OSCAR will offer several features for market participants by the fourth quarter of the year. Clearstream noted that OSCAR will allow market participants to develop, define, negotiate, and exchange optimized eligibility profiles of collateral baskets. While commenting on the development, Chief Executive Officer of Intelli-Select, Bart Coppens, stated that OSCAR provides the avenue for the development of insights based on natural language inputs.
The company further explained that it has been a time-consuming and complex experience for people to create and manage collateral baskets. As a result, it has brought a major operation burden on market participants.
OSCAR Will Speed Up Performance
In the past, they had to compare and review the different of multiple triparty agents manually, while keeping up with the rapidly changing regulatory requirements, market conditions, and business requirements.
But with OSCAR, they can reduce the time required for these activities without affecting performance. Head of Investor Services & Financing at Clearstream, Samuel Riley, stated that organizations can reduce the negotiation time for a collateral bank from weeks to hours.
This means that Clearstream can offer a massive relief for client operations that can create individual and machine-readable collateral baskets to increase the value of the business collateral.
Clearstream also pointed out that OSCA can enable the users to define their intelligent eligibility standard while ensuring consistency at the same time. Additionally, the tool enables easy interoperability with different counterparts, which improves reconciliation, negotiation, and true collaboration, Clearstream pointed out. It also increases speed, scalability, and flexibility while ensuring operational efficiency.