A financial commodity trading firm faced a significant challenge with managing collateral margin requirements when clearing positions through brokers. Fluctuating margin requirements, ranging from 3-12% of a position’s notional value, were driven by market volatility, making liquidity management difficult. Low interest rates on margin balances meant that excess capital tied up in margin accounts was not being optimized. Moreover, the firm was using manual processes to reconcile broker statements, which delayed operations and increased the risk of errors.

The firm required an automated solution that would not only streamline margin calculation and reconciliation but also improve liquidity planning by providing real-time visibility into current and future margin requirements.