Transparent rating of collateral creates liquidity and limits risks

10 December 2008

Bad Homburger Inkasso GmbH (BHI) has suc-cessfully completed a pilot implementation project for the CreditRisk Ma-trix (CRx) package solution from Cellent Finance Solutions AG. The inno-vative software for optimizing the distribution of recoverable collateral could be integrated in the existing BHI claims management system inside of just six months. The optimized distribution of statistics raises liquidity through the rating of available collateral. At the same time, the transpar-ent visualization at portfolio level effectively cuts down the risks involved.

With the successful pilot study at the beginning of December 2008, the distribu-tion of collateral statistics as an integral component of the CreditRisk Matrix (CRx) package solution has passed the practical tests and attained full market readiness. The software can be used either in a package with the collateral management system integrated in CRx or as a stand-alone solution in combi-nation with other systems.

Following an in-depth probing of the market, BHI decided in favor of the Cellent Finance Solutions software in the spring of 2008, becoming the first collection company to do so. The decision was made during the course of the establish-ment of the new "property collection" business sector, as well as in conjunction with the replacement of the old host systems at the parent group, Deutsche Leasing. With the help of the software, recoverable collateral can be ideally visualized and distributed at portfolio level using a complex mathematical algo-rithm. The representation gives a transparent overview of unsecured shares and the utilization of recoverable collateral. Additional liquidity can be created through the use of freed-up collateral components. The transparent visualiza-tion at portfolio level enables risks in the collateral structure to be more readily identified.

Michael Orth, managing director of Bad Homburger Inkasso, expressed his satisfaction with the pilot project: "Both the collateral management system as well as the distribution of collateral statistics could be smoothly implemented within the scheduled time frame. Following careful planning and implementa-tion, the pilot deployment at the beginning of December 2008 ran extremely successfully," said Orth. "This solution has given us a clear advantage over our competitors," he resumed. Thomas Wild, CEO of Cellent Finance Solutions AG, also reflected positively on the co-operation: "This project is of strategic significance to us. Together with our partners we have been able to success-fully position this new solution for distributing collateral statistics on the market as an all-in-one package together with our collateral management system."

The integration of CRx in the claims management system at BHI took place with the aid of the model-based integration platform, E2E Bridge. This innova-tive technology originates from the Basle-based software company E2E. Wild considers the modern integration approach to be strategically significant for the market launch of CRx: "E2E Bridge allows us to integrate our software for the distribution of collateral statistics quickly, transparently and in high quality in operational IT landscapes, as well as in existing collateral management sys-tems where required. We have now demonstrated this at Bad Homburger In-kasso." For Serge Gansner, CEO of E2E, this opens up access to the impor-tant German financial market: "The partnership with Cellent Finance Solutions has enabled us for the very first time to apply our in-depth experience of com-plex IT integration projects in the German banking industry with regard to indi-vidual customer requirements," he concluded.

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