Collateral Mobility: How do you complete the game?
My 8 year old son has recently started getting into computer games and off course this has meant me getting my old thumbs and fingers back on the controller to prove who is the number one gamer in the Crowther household! It turns out it’s not me ☹.
But, playing these games has brought back memories of my own journey through the pixelated worlds of late 1980s and early 1990s consoles.
Back then, progress was all about figuring out how to beat the next level: testing strategies, finding hidden shortcuts and even relying on the occasional cheat code to overcome the toughest bosses. Each new stage demanded sharper skills, quicker reactions, and smarter use of limited resources.
Looking at the challenges firms face today with collateral mobility and reusability; I can’t help but see the parallels.
Just as in those retro games, success in the financial “quest” isn’t simply about having plenty of resources available — it’s about deploying them at the right time, in the right way, to break through obstacles and unlock the path forward.
Mission Objective: Unlocking Collateral Mobility
Collateral is abundant but not always accessible. With more than $15 trillion of exposures collateralised daily, firms face mounting pressure to overcome market fragmentation, regulatory divergence and shorter settlement cycles. The shift to T+1 globally will compress timelines, while internal silos continue to restrict asset mobility. This article explores how greater visibility, stronger connectivity and smarter optimisation are redefining the way institutions approach collateral — turning a long-standing structural challenge into a potential source of strategic advantage.
Level 1: Collateral Mobility hits the Game shop shelves
For years, collateral management was viewed as a functional necessity: important to ensure margin calls were met, substitutions processed, and regulatory obligations fulfilled. But its role in global markets has changed dramatically. Today, collateral is one of the most critical levers for liquidity, capital optimization, and systemic stability. Securities finance and derivatives markets increasingly depend on collateral not simply as insurance but as the lifeblood of financial transactions.
Yet as collateral’s importance has grown, so too has its complexity. Diverse regional regulations, evolving market infrastructure, and accelerated settlement cycles are making it harder for institutions to unlock the potential of their collateral pools. The challenge of collateral mobility — moving the right assets, at the right time, across jurisdictions and business lines — has never been greater. The Bank for International Settlements estimates that over $15 trillion of daily exposures across repo, securities lending and derivatives are covered by collateral, underscoring the size of the task and the consequences of inefficiency.
Big Boss Battle: The Fragmented Realms
At the heart of the issue lies fragmentation. After the financial crisis, a wave of global rules was designed to reduce systemic risk. EMIR in Europe, Dodd-Frank in the U.S., SFTR’s reporting obligations, and the capital rules embedded in Basel III all enhanced resilience. But because each framework was designed within a regional or product-specific lens, the combined outcome has been siloed inventories and differing rules for collateral eligibility, recognition, and reporting. Much like trying to carry items between different video game worlds that each impose their own rulesets, what qualifies as eligible in one jurisdiction may not transfer seamlessly to another, restricting global mobility.
Accelerated settlement cycles are adding new urgency. The move to T+1 settlement in U.S. securities markets in May 2024 has dramatically shortened the window in which firms can mobilize collateral. According to DTCC, available time for settlement processes has compressed by as much as 30–40%, increasing the potential for settlement fails. Other jurisdictions are expected to follow, ushering in a new era where intraday collateral management will be the norm.
But fragmentation is not just a regulatory or infrastructure issue. Many institutions still operate with internal silos between repo, securities lending, OTC derivatives, and cleared derivatives desks — each with its own systems, counterparties, and processes. Collateral assets may sit idle in one part of the organization while another group faces a deficit, often leading to costly, last-minute sourcing. During recent market stresses, such as the margin calls in the European energy crisis or the volatility in UK gilt markets, these inefficiencies became painfully clear.
Heads-Up Display: Collateral Under Pressure
The pressure on collateral is visible across markets. ICMA estimated the European repo market at €9.2 trillion outstanding in December 2023, while ISDA’s annual margin survey revealed that firms are now collecting over $1.3 trillion in initial margin for uncleared derivatives portfolios alone. CCP requirements have also grown, with higher quality collateral increasingly demanded to maintain systemic resilience. At the same time, AFME reports that tri-party repos constitute around 40% of the European market, reflecting growing reliance on collateral agents, but also highlighting how assets can become trapped in specific infrastructures or geographies.
All of this speaks to the same issue: collateral is abundant, but not always mobile. The industry’s task is to break these dead-ends and create true enterprise-wide flexibility.
Unlocking Power-Ups: Core Skills for Mobility
The first and perhaps most fundamental requirement for collateral mobility is visibility. In many institutions, assets are still monitored desk by desk, with separate lending, repo, and derivatives functions each maintaining their own view of inventory. That fragmentation makes it almost impossible to know, at a group level, which collateral is genuinely available at a given moment. By contrast, some firms are consolidating those feeds into a single, real-time inventory. Broadridge’s platform, for example, is helping institutions create what amounts to a golden source of collateral truth, drawing together positions across business lines, regions, and custodians. Much like a video game player unlocking a full in-game map rather than stumbling forward blindly, this visibility transforms uncertainty into strategy. When clarity replaces guesswork, managers can begin to use inventory strategically rather than reactively.
If transparency is the foundation, then connectivity is what makes collateral actionable. Even with perfect knowledge of your assets, mobility stalls if they cannot move fluidly across markets, accounts, and time zones. This is where operational friction often bites: mismatched messaging formats, manual choke points, or constraints at regional utilities. As settlement cycles move faster under T+1, the cost of these frictions rises sharply. The answer lies in integration — not only within firms, but also between firms and the core market infrastructures they rely upon. By embedding secure, API-based links to triparty agents, custodians, and CSDs, Broadridge’s platform is enabling institutions to move assets on demand, in sync with compressed market deadlines, and with far less operational leakage.
Intelligence forms the third piece of the picture — the ability not just to move collateral, but to move the right assets in the right direction. In the era of higher rates and tightening balance sheet costs, pledging sub optimal collateral quickly erodes profitability. Leading firms are now running optimization continuously, weighing eligibility rules, haircuts, liquidity profiles and internal funding costs before allocating. What’s evolving further is predictive capability: the use of analytics to forecast where collateral will be required tomorrow or the day after, and to pre- position inventory accordingly. Broadridge has been helping firms to push into this territory, embedding optimization and forward-looking analytics into the daily workflow so firms can act before risks materialize. The result is a shift from firefighting to foresight — turning collateral management into a proactive liquidity tool rather than a passive one.
Pro Strategies: How the Top Players Compete
The leading edge of the industry is already showing what effective collateral mobility looks like. Several tier-one banks have successfully consolidated collateral across both trading desks and treasury, creating shared pools that allow them to allocate high-quality assets dynamically wherever they are needed. Others have begun to rely on predictive modelling to minimize last- minute funding calls. Meanwhile, tokenized collateral pilots have demonstrated how digital ledgers could expand the range of eligible assets and allow near-instant transfer across networks, though these remain in their infancy.
What binds these practices together is not simply technology adoption, but an organizational recognition that collateral strategy is a front-office imperative. No longer siloed in the back office, collateral management is increasingly part of treasury, risk, and client-service conversations.
Next Level: The Future Game World
Fragmentation in collateral markets will not disappear overnight, but progress is being made. Greater harmonization of eligibility frameworks, more widespread adoption of standardized messaging, and continued collaboration between regulators and industry are central if firms are to unlock full mobility. At the same time, the shift to T+1 makes clear that legacy, batch-oriented systems will struggle in the new environment.
The future will therefore belong to firms ready to invest in agile platforms that consolidate visibility, connect seamlessly to the external ecosystem, and optimize allocations with intelligence. Broadridge’s platform exemplifies how this can be achieved at scale, by combining enterprise-wide transparency with actionable optimization in one environment.
Game Over or Game-Changer: Turning Bottlenecks into Power Plays
Collateral mobility is one of the defining challenges of modern securities finance, shaped by fragmented regulation, shortened settlement cycles and rising funding costs. For firms that cannot master it, these forces will remain a source of operational risk and inefficiency. For those that can, mobility becomes a source of resilience and strategic differentiation.
The path forward is clear: firms need genuine visibility across collateral pools, seamless connectivity to market infrastructures, and intelligent tools that ensure the right asset ends up in the right place at the right time. By uniting these elements in an agile, front to back operating model, fragmentation can be transformed from a constraint into a competitive edge.
In a market where trillions of dollars’ worth of exposures are collateralised daily, firms that achieve this shift will be those best placed to preserve liquidity in stress, serve their clients more effectively, and deploy balance sheet with agility. Broadridge’s platform exemplifies how technology can bring these capabilities together — turning today’s collateral bottlenecks into tomorrow’s opportunities.
Much like the games I grew up with — where completing one level only unlocked the next, more complex challenge — the journey of collateral mobility is not about a final “game over” screen, but about continuing to play, learn, adapt, and get stronger with each stage cleared. The firms that approach it this way will be the ones best equipped to keep progressing, no matter how the market rewrites the rules of the game.
🎮 The market may set the levels, but it’s up to you to master the game.