Problem statement

• OTC Confirmations for Structured products are currently drafted manually and involve significant bandwidth requirement. Given the complexity of products, bank is facing 3 key issues w.r.t. the manual drafting process for these products
  
  • Low Accuracy
  • High cycle time
  • Improve the volume handling capacities to assist business growth
    

CRISIL's solution

• Defined the prioritization of the Structured Product trade types based on product volumes
  
• Configuring the Confirmation Automation System
  
  • Confirmation Automation system was configured to capture all of the parameters and price schedules for Structured products from the Risk Management System (RMS) feeds
    
• Automation of Confirmations
  
  • Analyzed payoff methodologies for identified RMS models 
  • Created templates for capturing all of the RMS payoff scenarios
  • Included STP control events for rarely booked parameters, which were not coded, to prevent auto-STPs and improve accuracy rates
  • Applied existing business rules governing the trade non-economics
  • Included counterparty specific exceptions for Special Handling cases
    
• Documentation & Audit
  
  • Established Maker-Checker procedures for template reviews & signoffs
  • Documentation of the project’s progress, Automation Roadmap, Procedure Documentation
  • Established MIS Reporting, Governance & Escalation Frameworks
    

Client impact

• STP Rates improved from 35% to 80%
• Confirmation generated with high accuracy
• Volume handling capacity increased to support growing businesses
  

Questions

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