24 October 2017
Talking Cash Management
Steve Scott

Talking Cash Management

Steve Scott - Temenos

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Effective Liquidity Management tools at your fingertip?

23 July 2009  |  3953 views  |  0

·         What’s the latest balance?

·         What’s arrived that I’m not expecting?

·         Has what I’ve paid settled?

·         What’s in the queues?

·         How are my counterparties performing?

·         Where are my risks?

·         Where can I get more liquidity?

·         Where’s my liquidity gone?

After reading on FT.com the piece by Fundtech’s George Ravich likening the need to have SOA strategies like a playlist for an MP3 it made me think of other similes for risk managers.

Mobile internet has evolved and overtaken the desktop browser as the medium to rapidly retrieve information from the web.  Equipped with a touch screen phone I can tap an icon that will for instance give me a list of restaurants near me.  And behind this Icon is an application that works out where I am using the inbuilt GPS, searches the web for nearby restaurants and provides them in a list sorted by distance from where I’m standing.  Another tap dial’s the restaurant from the phone and another gives me directions to get there.

Slick and seamless presentation of relevant and timely information.

On a standard car dashboard you have a fuel gauge and a speedometer.  A glance tells you roughly what’s left in the tank and your speed at the moment that you look at it.  Is that enough on a long journey?  Modern cars have built in Sat Nav’s and processors that at a touch can combine data, compare historic information (speed over time) and show on current speed how long before my fuel runs out and where the nearest petrol stations are on the planned route as the time to fill-up approaches.  The processor can also tell you if a variable is changed what the effect will be e.g. how much further you could travel at a lower speed?

Rapid presentation of disparate data facilitates effective decisions.

Whether it’s the touch screen mobile phone or touch panel in a car dashboard, the application behind the icon or button collects data, aggregates it and transforms it for display.  The data required for the display already exists but, the sources are disparate e.g. units of quantity, speed, position, distance; answers to ready made queries at the touch of a fingertip.

Instant data retrieval and presentation is today’s must have “Gadget”.

Getting at data should be the same for those managing settlement, liquidity and credit risk.  The data exists to answer all of the questions above and more and it can be extracted in real-time.  Accessing information in this way as a risk manager should be as standard as real time updated rate screens are to traders.

Is it too difficult to do?  I don’t think so, not easy but not impossible.

Will it cost too much?  The solution will only be too much when it costs more than:

·         Current inefficient use of liquidity

·         Current errors in funding accounts

·         On-going over provision of collateral

·         Lost trading opportunities due to poorly monitored credit lines

·         Impact on organisation of risk management processes that don’t stand up to regulatory scrutiny.

Innovation in data retrieval was a differentiator in mobile phone technology, but has rapidly become commodity.  Did this happen so fast that we just forgot to think about the way that it works and how the same technology can be applied to improve our working lives?

TagsRisk & regulation

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job title Product Manager, CorporateSuite, Cash Management
location London
member since 2008
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Responsible for Cash Management Solutions in Corporate and Transaction Banking. All views expressed are my own.

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