The Synechron Blockchain Accelerator for Smart Margin Calls
The Synechron Blockchain Accelerator for Smart Margin Calls brings instant, unanimous completion to the margin call portion of the derivatives lifecycle, minimizing drawn-out back-and-forth inconsistencies and disputes. The accelerator’s smart contracts, built on a Hyperledger private blockchain network, are embedded with the transaction valuation logic. The final contract can be validated by both counterparties, eliminating the need for back-and-forth communications.
Synechron draws on its extensive knowledge of capital and currency markets and its investment bank system development experience to show you:
- Where blockchain can improve margin management immediately, without waiting for the completion of industry-wide consensus.
- How blockchain can reduce credit and liquidity risks by reducing manual process steps and lengthy collateral exchange cycles.
- How a blockchain-based system can handle the additional transactions due to upcoming regulations.
Reduce Margin Call Effort and Costs
Applying blockchain technology using smart contracts enables a bank to:
Reduce costs
- Automation of the extensive manual intervention required to source and move collateral — telephone calls, emails, papers or proprietary user identification systems.
Resolve disputes faster
- Smart-contract logic built using a private blockchain network ensures minimal to zero disputes. All transactions are validated, and all valid transactions are added once and only once.
Lower risks
- Banks can manage liquidity more effectively by timing cash flows more precisely and deploying collateral more effectively. More efficient operations also reduce settlement risk and human.
Manage higher volumes
- New rules are coming from regulators that have been scrutinizing OTC derivatives trades since the financial crisis. Existing manual processes are expected to choke on an expected 10-fold increase in margin calls for uncleared derivatives contracts.
