Automation of OTC confirmation document generation process to improve accuracy and reduce document generation time
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
- 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