A number of the world's major banks, including ANZ, Barclays Bank, Citibank, JPMorgan Chase and Mizuho, have joined a working group initiated by Cable & Wireless to explore the adoption of new standards for real-time processing of nostro account information.
Real Time Nostro is a system developed by Cable & Wireless and software house Gresham Computing to address liquidity and risk management issues relating to account balances and transactions between banks. First posited three years ago by Gresham as a way for individual banks to move from overnight batch processing of intra-day settlement positions, the idea has since evolved into a market utility play in the shape of a shared repository for real-time nostro information. Banks signing up for the service expect to better manage their liquidity and see a corresponding decline in their use of collateral.
The scheme, which will be compliant with the SwiftNet XML schema for cash reporting, will be available on a $5000 per month subscription basis to participating institutions. Banks will be able to access data directly over the Internet or via SwiftNet. Access to each bank’s data is subject to interbank service level agreements and will be available via authenticated and encrypted links.
Nick Jeffery, chief executive officer, markets group, Cable & Wireless comments: “This service is designed to complement the major investment that banks are making to solve settlement risk, while spreading the benefits of real-time information to manage liquidity among global financial institutions.”
Andrew Walton-Green, CEO of Gresham Computing says the working group will initially agree on the exact details of delivery. “Much of the attention will then be focused on how each bank can extract the maximum value for itself and its customers from the use of this real-time stream of nostro account data.”