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RTGS Global rolls out stage 1 of liquidity visibility network

RTGS Global rolls out stage 1 of liquidity visibility network

In collaboration with Microsoft, cross-border transaction network RTGS Global has launched the first stage of its operational rollout to boost visibility of interbank liquidity.

In conversation with Finextra TV, Nick Ogden, CEO, RTGS Global tells Richard Peers that when originally considering the firm’s key objectives, “we wanted blistering speed and transactional volume.

"We wanted to be able to do 30,000+ transactions per second, multiplied by 180 currency corridors with each transaction taking circa 50 milliseconds. Scaling this globally is really very difficult and wouldn’t have been possible a couple of years ago.”

With the launch of its first phase, it seems that RTGS Global is on the way to meeting its lofty goals.

Ogden explains that RTGS Global’s tool will be offered as an automatic add-in to Microsoft Azure, and is available to 43,300 banks around the globe. The technology functions by checking in to banks’ liquidity, confirming the available liquidity, and locking in this liquidity for the beneficiary bank. This means that as soon as the transaction is agreed, the exchange takes just 50 milliseconds - almost instantaneous.

“That might seem incredibly simple and something that one might have assumed has happened before, but it didn’t,” observes Ogden.

“The beneficial ownership of the funds is changed securely, and it is replicated in what we call synthetic central bank money. This means that the real funds are tied back to central bank reserves, ensuring the transaction is immutable.”

The advantages are manifold for businesses and consumers. While the clear benefits of 24/7 instant cross-border payments are well documented for both payers and beneficiaries, Ogden elaborates that the tool will allow banks to vastly improve their customer service interactions as a result of liquidity transparency. Capital savings in relation to the construct of accounts created is also flagged by Ogden as a key attraction of the service.

Explaining the development process, Ogden furthers: “The challenge that we have faced is how to operationally sync this into various institutions. While money is money, the way banks deal with money is different with each and every bank.”

RTGS Global is currently working with a number of groups to discuss these operational complexities and is now moving into the technology testing phase and smoothing out the operational interlinks. Following this the technical integration will be scheduled-in before the commercial roll-out in 2021.

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