Overview

The events that unfolded during the worst days of the crisis showed the importance of effective short-term operational liquidity management. They also demonstrated the value of investing in such a capability - since those firms that had invested in systems and processes around the day-to-day management of liquidity benefited greatly from their earlier spend.

New regulatory frameworks are a leading driver for improved management of liquidity risk. But the business case to invest in real-time liquidity management goes beyond regulatory compliance and risk mitigation. Getting it right can save banks a lot of money, too.

Financial institutions therefore need more frequent and granular information to increase intra-day funds visibility. This will lead to reduced overdraft charges, intra-day credit lines costs and oversized liquidity buffers. Lack of intraday data can lead to a late identification of gaps between forecasted and real inflows, outflows and positions, resulting in substantial financial costs - due to intraday credit line costs, higher funding costs, overdraft charges and higher liquidity buffers.

SWIFT has a set of liquidity reports in MT and MX formats that provide intra-day transactional and account balance information.
You can build cash reconciliation by receiving a credit/debit advice (MT910/900) as soon as the transaction is posted on your account. You can also ask for a consolidated report at specific times or frequencies (MT942). Or combine both.

The ISO20022 MX messages can report 100% of movements. The Account Report message provides the most detailed view on transactions as well as on balance information.

SWIFT's Cash Reporting solution enables financial institutions to receive these reports on a real-time basis from their service providers. Several applications support this solution.