Business processing specialist eClerx has launched a risk review solution for International Swaps and Derivatives Association (ISDA) Credit Support Annex (CSA) documents.
The solution is able to mine ISDA CSA documents for information which eClerx said will make it easier for financial institutions to manage their credit risk and collateral.
Information contained in CSA documents is essential for firms' credit risk management and planning, according to eClerx, with Basel III and rules in the US Dodd Frank Act leveling a greater burden for market participants to manage collateral and credit.
The review solution will enable the use of electronic records of agreement, which can be mapped and reconciled to client systems.
Currently, around 65% of agreements contain discrepancies compared against representations in client systems, and eClerx said its solution would enhance information accuracy. It includes a reporting suite summarising discrepancies between systems and CSA records, and can benchmark against industry standards and isolate legally unenforceable documentation.
Additionally, an analytics suite can be customised to suit the needs of various departments in financial institutions, including legal, credit valuation desk, client on-boarding and liquidity management.
Mahesh Muthu, associate principal at eClerx, said: "financial institutions can leverage the toolset and processes already developed and mastered, allowing their internal teams to focus on optimising day-to-day decisions with a more accurate, granular data set.
Managing credit risk and collateral is becoming increasingly important due to regulatory change in both Europe and the US, and Muthu said that firms will need to ensure they have a solution in place to manage their CSA documents while also keeping a lid on costs to remain competitive.