Wachovia Corporation

Wachovia Corporation

Problem:

Wachovia has a significant loan book secured by liquid collateral (stock, equities, bonds etc) in its consumer, commercial and private banking divisions. Other collateral (property etc) is also in the mix.

The organization was not tracking the eligibility or value of the securities on a mark to market basis and was never sure of the LTV for any particular exposure. Wachovia was not on top of “out of margin” positions where the margin between the total collateral held the overall exposure was too low. During markets dips there was frantic and costly activity to establish the position and to examine the overall risk. It also had limited means in tracking the portfolio risk where they may have been an over concentration of certain collateral types.

In summary Wachovia had no solution to track its exposure on a mark to market basis. Due to internal and regulatory pressures Wachovia need to source a solution to addresses its needs.

Solution:

Rockall’s Enterprise Collateral solution met many of the Wachovia needs in that it support many different collateral types and was easily extended to meet specific requirement of Wachovia. The key challenge was the integration of the solution with other systems within the Wachovia organizations. Such systems included, commercial loan servicing systems, commercial loan origination system, brokerage and trust systems, valuation feeds, customer systems, mortgage loans servicing systems, mortgage origination systems etc. The Rockall Solution proved open to accepting data from this variety of systems and bringing it together in one place to provide:-

  • A single point where the bank can get a mark to market position on any exposure or exposures.
  • A method for tracking and managing (through workflow) any situations such as out of margin, concentration breaches.
  • A method for corresponding with customers / other bank officials on any matter.
  • A portfolio view on its exposure / risk
  • A means to carry out renewals / client exposure reviews 8 times faster than previously.
  • The means to increase their loan book by 10 times in 2 years with reduced risk and significantly less manual management.

Quotation from Greg Jardine, Senior Vice President, Wachovia Bank

Managing Collateral to Mitigate Risk at Wachovia Bank

We created a team at Wachovia Bank to source a system to automatically track events that occur with marketable securities that are being used to secure loans. We invited Rockall Technologies to respond to a very detailed RFP. Their response was very focused and it appeared that they were the only company of the few we selected that had a system that could meet most of our requirements. It soon became apparent that Rockall had even more than a solution that met our immediate needs. They had the software functionality, which may meet future needs, including all types of collateral management. We examined Rockall’s financials in depth and we looked at their product from both a technical and functional perspective. This involved scrutinizing Rockall’s documentation, doing business and technical workshops and participating in multiple demonstrations of the product’s functionality. A team of four Wachovia Executives — two business and two technical — traveled to Ireland to conduct further due diligence. They met with the staff of Rockall and a number of Rockall’s more prominent customers in both Ireland and the UK. Very open and frank meetings occurred with Rockall’s customers, where Rockall was not present. Customers spoke extremely well of Rockall, not only about the functionality of their software but also about the diligent nature of their company. The key findings were:

  • Rockall’s product performed as they said.
  • Their solution could be configured easily to work in diverse infrastructure and in diverse ways.
  • Rockall was very proactive in defining requirements and they did not hesitate to be open and frank if they thought there were better ways to do things.
  • Rockall is a “can do, will do” company.
  • Rockall has excellent long-term relationships with their clients

We decided that this young and energetic company was the right one to deliver our solution. We are entirely satisfied that we made the best choice and that Rockall is delivering as promised on all aspects of the project.