In the wake of the global financial crisis, packaged loan collateral management platforms have failed to keep up with heightened demands for sound risk management, Basel compliance, and portfolio optimization practices brought about by increased asset price-volatility.
In response, Misys has partnered with leading financial institutions to release a collateral management platform which enables today's lenders to approach new business with greater confidence.
Implemented in conjunction with Misys Loan IQ - Misys' market-leading solution for loan origination and servicing - lenders can now consolidate their system portfolios towards a unified commercial lending platform in order to benefit from substantial cost reductions and risk avoidance.
The global commercial lending industry is undergoing a transformation. Improving the cost effectiveness of originating and servicing loans appears to be one of the most certain available routes to improving profitability; meanwhile, a heightened focus on risk management across the financial institution means that the effective management and analysis of loan collateral and guarantees is now recognised as a crucial element in the lending process.
To underpin this transformation, lenders require a highly structured environment which assures comprehensive data-capture and compliance to procedure, yet is flexible enough to meet the requirements of diverse business lines, different geographical markets, and an evolving regulatory environment. While many packaged lending systems already offer extensive pre-defined collateral catalogues, the vast majority require costly customization (or have to be supplemented by 'local' systems) to meet the varying needs of business lines across geographies.
With clients ranging from small agricultural lenders to top-5 global banks, Misys Loan IQ is the proven leader in commercial lending. Now, with the recent release of Loan IQ v7.2, Misys has extended the solution's loan product coverage further by providing richer functionality, including the new Advanced Collateral Management module for lending. Incorporating configurable 'best practice' process flows, the new module delivers the control and transparency demanded by managers and regulators as well ass the efficiency needed by end-users; importantly, it does this within a single global deployment. This unique combination makes it an ideal solution for managing collateralized portfolios such as income-producing commercial real estate on a global basis.
Users can create, perfect, maintain, and analyse collateral and guarantees and track their relationship to covered loan obligations (a key requirement of Basel II and Basel III) in an environment which is at once highly structured, configurable, intuitive, and efficient. This disciplined approach to managing collateral insures that credit, risk, and portfolio managers have the visibility they need to ensure they do the 'right deal' with the 'right collateral'.
Ken Katz, Director, Misys Loan IQ Product Management, points out that in the current environment, reducing costs by consolidating systems is one of the most powerful levers financial institutions have to improve the profitability of the lending business, noting that the implementation of a unified commercial lending platform "is an important first step towards increasing transparency and reducing operational costs to a level unthinkable in fragmented lending system environments."
By enabling financial institutions to centralise and store standardised data and share a unified set of global processes and common infrastructure, lenders can create "economies of scale and scope, while attaining greater insight into the needs of their customers and the efficiency of their operations," according to Katz.
The new Java-based 7.2 release of Loan IQ makes significant strides in performance and scalability, and is delivered on a JEE architecture. Further, it is the first release to include support for Microsoft SQL Server, so offering a reduced total cost of ownership. According to Jim Long, Misys Loan IQ Head of Development, it is a solution that "increases consolidation and integration, is scalable, flexible, transparent and reliable, and has a global reach."
Misys Loan IQ v 7.2 also includes the first version of the Loan IQ Software Development Kit (SDK), designed to empower Loan IQ clients to customize the product to suit their individual organizational and client needs.