Managing Intraday Liquidity Risk

2023 events marked a watershed moment for intraday liquidity risk management, revealing vulnerabilities no institution can ignore. Market dynamics have shifted significantly and financial institutions now operate in an increasingly interconnected and time-sensitive market. With the European Central Bank’s (ECB)’s publication of sound practices for managing intraday liquidity risk serving as a benchmark, many institutions are now focused on further mitigating the risks posed by gaps in intraday liquidity.

This white paper explores how the sound practices outlined by ECB Banking Supervision in November 2024 are shaping intraday liquidity risk management expectations. It discusses the challenges banks face meeting these risk management principles due to legacy constraints and how using Baton Systems advanced, modular technology financial institutions can not only implement the tools and capabilities to address the ECB requirements with confidence and ease, but also enhance operational and financial resource efficiency and position themselves as leaders in financial resilience. Download our white paper. 

The Challenges of Intraday Liquidity Risk Management

Intraday liquidity shortfalls present immense operational and systemic risks, demanding real-time solutions for timely decision-making. Yet, many institutions are constrained by outdated legacy processes and siloed systems generating fragmented data, leaving them unable to attain enterprise-wide, real-time liquidity visibility or accurately forecast intraday liquidity demands.

Baton’s next-generation technology addresses these inefficiencies head-on, empowering institutions to accurately predict and plan for demands on intraday liquidity, more effectively meet payment obligations, prioritise outflows, and achieve operational efficiency even in volatile conditions.

Intraday Liquidity Risk Management Tools and Capabilities Designed for Financial Institutions

Baton’s platform bridges the gap between compliance mandates and operational excellence, delivering unparalleled intraday liquidity risk management tools and capabilities including:

• Real-Time, Enterprise-Wide Liquidity Visibility: Gain a 360-degree consolidated, enterprise-wide view of all liquidity positions across the entire organisation via a single dashboard.
• Precision Forecasting Tools: Predict the timing of inbound payments and accurately forecast the impact on intraday liquidity demands using historical data and real-time insight.
• Intelligent, Automated and Conditional Payment Execution Controls: Prioritise and execute the sequenced release of payment outflows, to help users meet obligations on time.
• Identification of Available Liquidity Sources: Real-time payment reconciliation capabilities enable users to rapidly identify and redeploy recently reconciled unencumbered liquidity.
• Scaleable Governance and Alert Mechanisms: Benefit from real-time alerting to unusual payment activities, configurable dashboards providing role-specific insights and key intraday liquidity risk metrics and access to automated decision-support tools.
• Comprehensive Stress Testing: Simulate adverse market scenarios to evaluate financial resilience and refine intraday liquidity risk management strategies.

Read the managing intraday liquidity risk white paper to learn more

Why Choose Baton?

With Baton’s next-generation technology, institutions can address the ECB’s intraday liquidity risk management sound practices through one integrated platform. Built for flexibility and scalability, it’s a modular and interoperable solution designed to integrate seamlessly with an institutions existing systems to deliver enterprise-wide risk management improvements. Key benefits include:

• Meet ECB Banking Supervision Expectations: Address multiple aspects of each of the ECB’s seven sound practices for intraday liquidity risk management using a single solution.
• Proactive Risk Management: Stay agile in unpredictable markets with real-time liquidity monitoring, alerts and early warning notifications.
• Scalable & Modular Platform: Adapt quickly to changing market conditions with a low-code, cloud-based platform.
• Enhanced Financial Resilience: Operate at the cutting edge of intraday liquidity management to fortify your institution’s financial stability.

Take Control of Intraday Liquidity Risk Today

Adapting to the ECB’s principles doesn’t have to be complex. Baton’s cutting-edge technology simplifies the process, enabling financial institutions to not only comply but thrive. Download the white paper today to explore how Baton is redefining intraday liquidity management enabling banks to prepare for a stronger, more resilient financial future.