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Invite colleaguesModernising intra-day liquidity optimisation for commercial banks
Abstract
Commercial banks are facing a period of exceptionally difficult funding conditions amidst a challenging economic environment. To address this, banks need to optimise their liquidity flows and usage. But existing liquidity optimisation and management methods fall short of materially reducing liquidity costs and can generate large operational risks. This paper describes how advanced analytics and algorithms can be used to optimise liquidity flows and usage in a real-time environment through payment resequencing. This approach can enable banks to significantly and consistently reduce liquidity usage and costs, potentially turning more effective treasuries into profit centres. This paper also describes the fundamental requirements for embarking on a modern liquidity optimisation project and also presents some recommendations for best practices in operational and technological infrastructure.
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Author's Biography
Jeremie Feuillette is the Director of Commercial Bank Solutions at FNA. He has over 15 years of experience delivering finance and liquidity management programmes for large global systemically important banks (GSIBs), including HSBC and Standard Chartered, focusing on regulatory reporting, stress testing and intra-day optimisation.
Will Towning is the Strategy and Innovation Manager at FNA, where he is responsible for developing and coordinating the company’s go-to-market strategy. Prior to joining FNA, he worked as a journalist at Central Banking Publications, where he covered central banks, regulation and payments systems.
Kimmo Soramäki , PhD, is the Founder and CEO of FNA and the author of Network Theory and Financial Risk. He has over 25 years of experience working with central banks and financial market infrastructures. He is a frequent speaker at industry events and has written over 50 papers that have been cited in more than 2000 academic publications.