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By John Straley, Executive Director, Institutional Trade Processing, DTCC
Over the past several months, the entire financial industry, and the world, has had to radically adjust how we work together. This is especially true with crucial functions like managing margin calls. This topic has received greater attention than usual, in the same way that we often notice something when there is trouble – and when market volatility has created a perfect storm of asset sales and margin calls. The increased activity has highlighted that, in our age of digitalization, many still rely on faxes, emails, and phone calls to manage their margin call process, creating inefficiencies in the best of times, and now potentially higher error rates and financial losses.
The experience of dealing with the spike in margin calls at the beginning of the COVID-19 pandemic reinforced that this critical process should be fully automated. In response, firms should now adjust to the virtual “new normal”, while staying ahead of regulations and creating lasting efficiencies. Here we explore each of those areas.
The need to adjust to virtual procedures across the industry
The current margin call management process still relies heavily on manual processes such as emails, phone calls and …
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