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Structured Guarantees
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Descriptions
The British Business Bank (BBB) is the UK economic development bank with an objective of making finance markets work better for small businesses. The BBB typically operates on a wholesale basis through the existing financial ecosystem with lenders partnering with the BBB in areas that increase the supply, diversity and regionality of finance for UK SMEs.
Structured Guarantees (SGs) is one of the wholesale product offerings provided by the BBB. It primarily supports the BBB's objectives by aiming to increase the availability of finance to UK SMEs and promoting competition within the SME debt finance market. It does this by encouraging lenders to increase their lending by, for example, addressing the high capital consumption associated with such lending.
SGs is branded as two separate programmes, but the underlying aims and structures are broadly the same for both:
1.ENABLE Guarantees: This programme is operated on behalf of the Department of Business and Trade (DBT). It was announced at the Government's 2013 Autumn Statement, with the first Request for Proposals (RFP) published in 2014. The programme was initially only open to banks but expanded to include non-banks in 2019. This programme is not limited in the types of lending it can support, as long as the underlying lending is targeted at UK SMEs. Examples of the types of lending supported include secured lending against commercial property to support a business's working capital or growth needs, dealer floorplan finance, and asset / invoice finance.
2.ENABLE Build: The programme was launched in 2019 with the BBB operating the scheme on behalf of Ministry for Housing Community and Local Government (MHCLG), the government department responsible for housebuilding. Unlike ENABLE Guarantees, the programme only supports finance going to smaller housebuilders.
Under both programmes, the BBB (acting on behalf of the government) take on a portion of the risk of a portfolio of debt finance to SMEs, in return for a fee. The guarantee is priced and structured such that a positive return is expected for government under all but the most adverse economic scenarios.
Lenders under the programmes are required to report monthly or quarterly on the performance of the transactions. They are required to submit loan level information across a number of fields, some of which are consistent across transactions and some of which are transaction specific. Currently, banks submit this data in three separate files, while non-bank financial institutions (NBFIs) submit all data in one file across separate tabs. NBFI submissions have consistently been poor in quality and format causing significant operational inefficiencies and risk exposure.
The three separate files submitted by banks contain loan-level regulatory data and BBB-specific fields, but data validation rules cannot be applied unless the data is merged, which is a manual and time-consuming process.
Currently all reporting by the BBB is being done manually via excel but given the complex nature of each portfolio, the Structured Financial Institutions Solutions (SFIS) team spend a significant amount of time managing each transaction to ensure adherence to the terms of the structure.
Each transaction is structured specifically for each lender which means the chosen supplier will need to independently acquire a detailed understanding of the legal documents and the terms contained within them, as well as of the underlying portfolio and data.
What are our goals
As the programmes scale, the BBB is looking for a partner to provide expert knowledge in structured finance transactions including independent interpretation of legal documents, translating them into automated rules which would feed into a technology solution accessible to both BBB, lenders, and a calculation agent. The objective is to streamline and de-risk the manual processes from both the perspective of the lender and the Banking Operations team.
Tenderers are also directed to the Specification for the Project Requirements, as set out in Appendix 6 (Specification) of the Invitation To Participate (ITP).
For more information about this opportunity, please visit the Delta eSourcing portal at:
https://www.delta-esourcing.com/tenders/UK-UK-Sheffield:-Portfolio-management-services./C3A25E6Z2V
To respond to this opportunity, please click here:
https://www.delta-esourcing.com/respond/C3A25E6Z2V
Timeline
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Tender Regions
CPV Codes
66151000 - Financial market operational services
66140000 - Portfolio management services
72600000 - Computer support and consultancy services
72310000 - Data-processing services
Keywords
asset management
investment portfolio
fund management
discretionary management
wealth management
portfolio advisory
financial asset allocation
investment planning
fund oversight
client portfolio services
trading operations
market operations support
transaction monitoring
trading execution support
platform operation
market data services
operational trading services
exchange operations management
market logistics
trading system support
data processing services
batch computing
automated data handling
IT operations processing
transaction processing
digital transformation workflows
data computation
real-time data execution
backend data processing
mass data management
IT support consulting
tech advisory services
systems assistance
computing guidance
technology troubleshooting consultancy
operational support advisory
technical IT consultancy
hybrid support services
professional tech consultation
systems aid
Tender Lot Details
2 Tender Lots
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Possible Competitors
1 Possible Competitors
