23 April 2014

Data management issues delay liquidity risk progress - Swift

19 August 2011  |  7581 views  |  0 Risk

Data management issues continue to impede the efforts of financial institutions to develop effective strategies for dealing with liquidity risk, according to a survey from Swift.

In an in-depth survey of 40 cash, liquidity and liquidity risk managers at financial institutions around the world, the financial messaging body found six key data-related issues facing the industry.

Of those polled, 93% say they lack a view on intraday cash position across currencies; 91% ready-made liquidity risk analytics and business intelligence; and 89% advanced interactive cash and collateral management functionalities within payments infrastructures.

Meanwhile, 88% say they lack the ability to build predictive positions; 88% an intraday view of unencumbered collateral positions including margin calls; and 82% an ability to manage and report liquidity positions at a firm-wide level.

However, Swift says respondents also think that these problems can be addressed through "collaborative developments" suck as industry best practice for intraday cash reporting and common reporting standards and liquidity monitoring and control standards for use across high-value payments systems.

It also cites the introduction of a standard margin call solution to support the implementation of intraday feeds in liquidity management applications; industry best practice for collateral reporting for liquidity management purposes; and a central "payment tracker/adviser" platform providing transactional statuses.

Luc Meurant, head, banking, supply chain and corporate markets at Swift, says: "The business and regulatory pressure for financial institutions to improve their liquidity risk management cannot be ignored. The industry has to find solutions to data management challenges and, in addition to internal integration projects, the answer lies in collaboration. Industry-level initiatives to address these issues are already starting to appear."

You can read the Swift white paper here:» Download the document now 638.1 kb (PDF File)

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