OSTTRA’s triBalance service has seen a record 107% increase in initial margin (IM) savings for its clients over the past 18 months, marking huge strides in how banks and investment managers manage their funds.

Initial margin (IM), the collateral financial institutions set aside to secure exposures with other firms, acts as a safety net to ensure both sides of the trade can fulfil their obligations. However, this “safety money” can tie up significant liquidity and drive cost, which companies would rather deploy elsewhere. triBalance helps to reduce the outstanding exposures facing counterparties and, as a result, the amount of IM firms needs to set aside, freeing up more resources for other trading activities.

According to OSTTRA, each quarter since mid-2023 has seen steady improvements in the amount of IM savings clients have achieved. In Q2 2023, the company’s clients saw a 57% boost in savings, and by Q3 2023, that number increased by another 26%. The upward trend continued into 2024, with companies benefiting from even more IM reduction each quarter. By Q3 2024, savings were up 107% compared to where they started 18 months earlier.

“In today’s market, margin and capital efficiency is critical,” said Erik Petri, Head of Optimisation at OSTTRA. “As financial institutions face tighter regulations and increasing costs, our triBalance service continues to help clients significantly reduce their IM requirements, freeing up essential liquidity and funding cost for growth and investment. By optimising IM, financial institutions can remain competitive without compromising on risk.”

Source: OSTTRA