Buy-Side Technology Awards 2017: Best Buy-Side Collateral-Management Tool—CloudMargin

Part of this year’s focus has been due to global rules on variation margin being exchanged on uncleared derivatives for the first time, in March 2017, leading to an industry-wide scramble to comply. Subsequent implementation phases for buy-side firms in both variation and initial margin are scheduled for the years ahead. However, CloudMargin has also witnessed the growing acceptance of cloud technology and its particular utility when it comes to collateral management, and has focused on cost reduction in middle- and back-office processes such as margin movement. 

Karl Wyborn, managing director at CloudMargin, says that when he started at the firm several years ago, there was widespread skepticism about cloud—but that has completely changed. “In the last two years, that’s moved through to acceptance, and then actually, people moving on to embracing it as institutions use it more and become more comfortable with it, as the knowledge and intelligence around what the cloud can bring increases,” he says. “Now, we’re seeing cloud as being central to many of the adoption policies of our clients.”

Clearly, CloudMargin is a proponent of the technology. But it’s also been earning its keep in the wider industry by forging partnerships with the Depository Trust and Clearing Corporation and Euroclear, connecting to the firms’ Margin Transit Utility in August, and adding to its existing exchange partnerships by inking a deal with Nasdaq Clearing in March. 

In June, IHS Markit unveiled its Collateral Manager product, built on CloudMargin technology, while the firm closed a Series A fundraising round some three months earlier. Wyborn says that it is examining some emerging technologies, and is working on a blockchain initiative, but that it is still a relatively young company and as such, needs to be aware of “scope creep.” However, he adds, it has a defined focus for the next one to two years on what it wants to deliver. “We believe strongly that a dominant provider of cloud-based collateral [management] solutions will emerge over what is now the next 12 to 24 months, and we believe there are two governing factors around who will emerge—feature functionality and market-wide integration, says Wyborn. “The concept is perhaps more important than any individual integration, and the intent is that the whole becomes greater than the sum of its parts.”