Summary
Post Trade Solutions' Interest Statement Workflow, available through Margin Manager, enables streamlined interest operations by automating and standardising interest statement reconciliation across counterparties.
Daiwa Securities, a leading Japanese investment bank, is one of the first firms in the Japanese market to adopt the Interest Statement Workflow, achieving greater efficiency and enhanced control over its interest reconciliation process. In this article, Susumu Murai, Executive Director and Head of the Collateral Management Section, Global Markets Middle Office Department, shares the firm's objectives in adopting the workflow and the benefits it has realised through improved operational efficiency.
Client testimony: Daiwa Securities
Daiwa Securities Case Study — Reducing Operational Burden Through Automated Tolerance Management.
Prior to implementing the Interest Statement Workflow, whenever a discrepancy was identified during the reconciliation process, Daiwa Securities was required to compare interest statements prepared in its counterparties’ individual formats against its own records, investigate the cause of the differences, and reach bilateral agreements on amounts and value dates. These discussions were conducted primarily via email and involved a significant amount of manual effort.
Following implementation of the Interest Statement Workflow, both Daiwa Securities and its counterparties are able to set predefined tolerances for reconciliation differences. Items that fall within the agreed tolerance thresholds are automatically matched, significantly reducing the need for manual intervention. Even when discrepancies exceed the tolerance limits, users can respond quickly using the standardised rules available on the Margin Manager platform, greatly reducing the burden of the bilateral negotiations and adjustments that were previously required.
By implementing the Interest Statement Workflow, we have been able to reach agreement on both amounts and value dates much more quickly. Conducting reconciliations on a common platform has standardised the handling of tolerance thresholds and value dates, significantly reducing the operational burden associated with the bilateral adjustments that were previously required.
Susumu Murai
Background
As interest rates have risen globally, managing and processing interest statements has become an increasingly critical component of post-trade operations. The amount of interest calculated across collateral and margin balances has grown significantly, meaning even small discrepancies in interest earned or owed can create material financial, operational, and cost risks.
At the same time, firms today are managing higher trading volumes, more complex transactions, and greater regulatory scrutiny around operational risks and controls. These challenges are particularly pronounced in the APAC region, where firms often operate across a fragmented market landscape, navigating multiple currencies, regulatory frameworks, and interest calculation practices.
As a result, managing and processing interest statements has become a growing priority for firms seeking to improve efficiency and strengthen post-trade controls.
Existing market challenges
Historically, firms have relied on time- and labor-intensive reconciliation processes to manage interest statements, often scouring lengthy email trails and spreadsheets to identify, calculate, and track interest discrepancies.
Beyond consuming time, effort, and resources that could be better utilised elsewhere, these manual processes often slow the identification and resolution of discrepancies, compounding inefficiencies firm-wide. The lack of standardised processes across counterparties also increases the likelihood of miscalculation and reconciliation risk.
Post Trade solutions’ interest statement workflow
Post Trade Solutions’ Interest Statement workflow addresses these challenges by automating and standardising interest statement reconciliation across counterparties.
The solution enables both parties to submit interest statements into a common system, which then pairs statements, matches the data, and identifies discrepancies to produce a final, agreed statement.
Key features include:
- A standardised workflow that enables counterparties to agree interest calculations for a defined period (typically monthly)
- The ability to pair, match and finalise both parties’ statements by using an intelligent matching engine with tolerance-based matching at the counterparty level
- Detailed reconciliation of key data fields and daily calculations to quickly identify discrepancies
- A standard set of data fields agreed and designed by a working group of industry practitioners to ensure consistency across counterparties
- The ability to automatically write off or rollover the interest amount, reducing operational costs associated with processing large quantities of small payments
In addition to reducing manual efforts and freeing teams to focus on other high-value priorities, the solution’s agreed STP features significantly improve matching accuracy, supporting faster dispute resolution and greater processing efficiencies. By producing a final agreed statement to both parties and a full audit trail, it also enhances transparency, supporting stronger governance and compliance.
The solution is also designed to integrate into existing collateral management systems. Its user-friendly dashboard supports quick exception management and efficient user onboarding.
Margin Manager clients can leverage existing agreements and connectivity points for a smoother onboarding. The Interest Statements module is included in the subscription and can be deployed quickly with on-demand support from Post Trade Solutions’ dedicated team.
By leveraging Post Trade Solutions’ Interest Statement Workflow, firms can improve labor, operational and cost efficiencies while minimising reconciliation and financial risk.
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