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Collateral Management

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CPMS supports and monitors all of your financial institution's approved collateral types

CPMS is library driven. Each collateral type can be defined easily and comprehensively in the library as well as have any attributes or data elements that the bank wishes to attach to it.

Once defined in the library, CPMS ensures that all of the required information is collected prior to utilizing the collateral for a loan (in compliance with the financial institution's lending rules). CPMS can then monitor collateral margins and allocations continually to ensure adequate coverage.

CPMS is the most functionality rich and flexible Collateral Management system on the market. It supports individual customers, groups of customers, cross-collateralization, collateral pools, priority charges and allocation of collateral across products and customers. Even collateralization of joint and master/sublimit structures are fully supported.

CPMS supports cross-borrower collateralization--common collateral pooling

CPMS has a powerful collateral mapping, allocation and tracking capability. A single collateral or pool of collateral can easily be used to support any number of joint borrowers or separate loans entirely. Allocation of collateral and its priority against other lenders is also managed.

CPMS will also manage margin control of the collateral and enforce any financial institution-defined restrictions for its usage--even if the collateral is in a different currency than the product(s) it supports.

The CPMS diary tickler subsystem will remind the responsible financial institution officer to ensure that collateral is adequately revalued and will automatically revalue any market traded collateral. Collateral may have fixed or floating charges with different priorities managed.

Management can monitor collateral concentrations through the monitoring and reporting subsystems to avoid overexposure and can also relate collateral (say the shares of Company A) to the users of that collateral (those clients that use Company A's share as collateral). This is very important not only for overall exposure of the financial institution to Company A's shares in general, but also to quickly adjust should something happen to Company A itself.

All types of Guarantees are also supported

CPMS enforces the financial institution's Collateral Grouping Rules as well as exceptions

The financial institution's rules for grouping (as governed by regulatory requirements) inevitably have exceptions that don't fall into easy categories of “part of group” and “not part of group” nor are they necessarily calculable. A typical example of this might be the grouping rule “all companies owned by another company must be grouped if that company owns 50% or more of the subsidiary company's common stock, but otherwise not grouped except if the owning company has effective management control of the owned company in which case it must be grouped if the owning company owns 20% or more of the common stock of the subsidiary.” CPMS can easily calculate the actual ownership of the companies from information entered into the system, but has no way of determining what “effective management control” is or when it occurs because that is a judgment that must be made by someone understanding the actual situation. CPMS allows the user to handle these grouping rules and include an otherwise excluded company from a group, or exclude an otherwise included company from a group while calculating and managing those rules that can be calculated--no matter how complex the group. This is done in the easy to use subsystem of CPMS.

CPMS utilizes single-entry data entry principle

CPMS was designed to mimic the paper-based credit file that financial institutions everywhere are familiar with. A major difference in CPMS is that that information is in an electronic format and can easily be stored and reused for multiple purposes without reentry being required. CPMS will even generate your own institution's forms so you don't have to become familiar with new ones that may not fully meet your needs.

CPMS is further designed to allow for multiple parties to enter separate information into the system to further mimic the way your financial institution divides its workload today. Initially, each required field in CPMS has data entered into it either manually or electronically from a data feed.

Once approved, however, CPMS allows a working copy of the officially approved credit file to be cloned. This significantly shortens the credit process from then on. We designed it that way after discovering that typically only 5 to 10% of the information in the credit file changes from one approval to another, so only those items need to be adjusted before moving the file on for subsequent approvals—dramatically increasing productivity.

Furthermore, certain information is updated between approvals, often daily, as in the case of outstandings and share and bond prices, so that users can always have an accurate picture of the client's situation at any point in time. This is crucial for on-going monitoring, reporting and auditing as well as margin control of collateral.

CPMS creates an electronic credit file

Once the data has been entered into CPMS (or loaded in from existing electronic formats) it is ready to be analyzed, reported on, monitored, or utilized in whichever way the financial institution requires, even simultaneously by several users.

The credit file is then processed through its approval and post-approval administration--continually until the customer relationship ends. Problem loans can be forced through special asset management protocols using intensive problem rectification techniques.

CPMS uses the financial institution's own credit rules to validate and ensure that all required loan information is captured in the proper format prior to allowing credit officers to submit proposals to higher levels of management for approval consideration. This allows for even greater efficiency by ensuring that only valid credit proposals make their way through the approval chain.
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