Does Your Management Information System Show Real Time Intraday Liquidity Positions For True Cash Visibility?

The coronavirus pandemic and the ensuing economic disruptions underscored the need for safeguarding business continuity and solvency. This is achieved with greater visibility and the reliability of key data to help drive critical business decisions—especially during times of crisis.

In order to meet both operational and regulatory requirements, there is a need for a consistent, concurrent and real time single view of ADI’s liquidity position.

Liquidity Management is Expensive

Although ADI learned lessons from the 2008 financial crisis, and developed new best practices to ensure liquidity and capital, the current pandemic has made many ADI realizing deficiencies in their current cash management strategies. E.g. a mismatch in funding structure, a mismatch in cash flow, an increasing cost of carrying liquidity reserves, overdraft fees/commissions, and operational expenses that cover redundant and manual activities.

ADI bound by intraday liquidity regulations and the intraday aspects of liquidity strategies have received attention from regulators in the areas of compliance reporting, contingency funding, plan/resolution planning, stress testing and expensive liquidity buffer requirements (LCR, NSFR).

"To achieve real time, concurrent and consistent cash forecasting, ADI must enhance/upgrade from Excel spreadsheets and other stand-alone tools that provide a limited snapshot of data."

Types of ADI

An ADI business model determines the usage of intraday liquidity in payment and settlement systems as well as its vulnerability to intraday liquidity shocks. There are a number of ADIs with significant cash positions within main currencies. In any 24-hour period, these positions can vary significantly.

Key Challenges for ADI

ADI have generally focused on complying with APRA’s guidance (APS 210) rather than on developing more comprehensive and sophisticated intraday liquidity management capabilities. An effective intraday liquidity management strategy would be to reduce intraday liquidity costs by 15-20% through optimal efficiency, improved risk management and timely decision-making.

In the absence of both a single source of data and real time monitoring tools, ADI often face two common challenges:

  • Underfunded Accounts: To avoid time-sensitive payments lining up, a liquidity deficit might force the ADI to rely on intraday credit lines, incoming flows or liquidity transfers.
  • Overfunded Accounts: Surplus cash that’s better leveraged elsewhere.

These inefficiencies, resulting from either overfunding or underfunding, can last indefinitely (T+1, T+2).

ADIs are saddled with multiple data repositories and warehouses with their own data architecture /access APIs (e.g. treasury, payments and settlements, collateral management, etc.) It becomes challenging to source the data from multiple systems on an intraday basis for investigating/analyzing key metrics. Most of these challenges can be attributed to the poor alignment of internal processes, where internal banking systems can’t facilitate real-time data access.

Any system output that can’t provide data with an intraday time stamp is useless for intraday liquidity monitoring and reporting purposes. Efficient business operations require working with multiple financial service organizations across different markets. Complex banking structures and sprawling geographical footprints make complete, current balance visibility difficult. It also makes it difficult to measure the accuracy of cash forecasting.

Summary of Challenges

Six Pillars of Effective Intraday Liquidity Management

  • Treasury Organizational Structure
  • Process Operations and Controls
  • Treasury Analytics
  • Stress Testing
  • Product Management
  • Automation

Treasury Organizational Structure

Governance structures in treasury function should go beyond risk management. It should support the identification of opportunities, the evaluation of tradeoffs and investments and the supervision of capability implementation. ADIs should create focused intraday liquidity teams within treasury function, with the mandate to manage the calculation and drive optimization of its day-to-day operations (including contingent intraday liquidity). This means deploying resources with the operational capability of managing the ADI’s day-to-day intraday processes and contingency actions. Treasury shall engage with ADI’s businesses to help identify drivers of BAU, contingent intraday liquidity needs and actions needed to reduce those needs.

Process Operations and Controls

ADIs should continue to optimize/enhance strategies that either increase the supply of client cash/collateral or reduce the demand for funding from external sources/ markets. For instance, ADIs can redeploy existing liquidity sources, require pre-funding of select transactions or implement offsetting/netting of transactions (like foreign exchange transactions). In addition, these actions should be paired with optimizing money market/interbank account structures. Treasury should specify intraday liquidity usage frameworks - counterparty/product/ regional limits - thereby managing an abnormal upswing in demand.

True intraday control is achieved when an ADI can monitor its actual account activity, compare it to expected activity and manage any discrepancies/risks in real time. This allows an ADI to capture, control and optimize its intraday cash, collateral, and liquidity positions at any time of the day.

Treasury Analytics

An accurate prediction of liquidity positions can help an ADI proactively normalize peaks and identify opportunities to optimize intraday liquidity usage. Intraday liquidity costs should be baked into fund transfer pricing to get a complete view of profitability at a granular level. These costs help the business managers and senior stakeholders make informed decisions to optimize intraday liquidity and credit usage.

Stress Testing

An ADI must understand the intraday account balance as well as expected and outstanding payments. An ADI must also understand stress scenarios such as unavailability of funds, a reduction of secured funding and higher counterparty risk. Some of the intraday liquidity stress scenarios include:

  • A lack of available intraday liquidity at the beginning of the day to cover the expected, timecritical obligations or unexpected intraday outflows
  • The amount of intraday liquidity available at the beginning of the day is small relative to the potential impact of a stressed intraday liquidity event
  • The amount of available intraday liquidity sources at the beginning of the day is consistently lower than the expected intraday liquidity usage
  • Corresponding banks become vulnerable to liquidity stress when other banks are relying on corresponding bank services for their payment activities
  • Banks that consistently delay intraday payments directly or indirectly (mostly in LVPS cases)

Customer Management and Product Development

An ADI should use intraday liquidity analytics for customer management (e.g. charge customers for intraday credit lines or alter product design/options to limit intraday cash flow mismatches.) If a customer wants prioritized payments - a prepaid fee proposition – it would translate into a new revenue stream. (This also depends the on the customer’s relationship status.)


For true cash visibility, an ADI must monitor all intraday activity. Analytical tools for liquidity management and real-time intraday control provide guidance for maintaining compliance with regulatory requirements. Many ADI rely upon aggregate views that lack detail, significantly curtailing their ability to identify opportunities for active management. It’s imperative that ADI have analytical tools that can separate data and “slice and dice” it across several dimensions like customer, product, account, payment purpose, time, entity, etc. An intraday liquidity tool provides comprehensive visibility into an ADI’s settlement activity across all of its direct and indirect accounts. Analyzing balances, turnover and transactions throughout the day provides real-time intraday insights like external intraday advice, EOD statements and alert monitors. ADI should report intraday liquidity usage to front-line and finance decision-makers, even when those reports are subject to a time lag.

Employing automation, with artificial intelligence solutions capable of identifying patterns, spotting outliers and proposing resolutions/actions, will provide a more futuristic vision for an ADI. It enables employees to focus more on strategic concerns, while managing exceptions that slip through the system.

Key Reports for Intraday Liquidity Management

Daily maximum intraday liquidity usage

  • Report the three largest net (positive and negative) cumulative balances between payments made and payments received under normal conditions. Also report the average during the reporting period
  • Monitor all cash flows, both in and out, at various times throughout the day. (Opening balance with RBA or corresponding bank)
  • Minimum amount of intraday liquidity must be at least equal to the largest net negative balance

Available intraday liquidity at start of business day

  • Report the three lowest values of intraday liquidity available at the start of the business day, by constituent, as well as the average during the reporting period
  • Provide enhanced transparency on intraday liquidity sources such as:
    • Reserve (cash) balances at RBA
    • Collateral pledged with RBA that can be freely converted into intraday liquidity (cash)
    • Unencumbered assets on ADI’s balance sheet that can be freely converted into intraday liquidity via money market funds
    • Secured and unsecured funding sources from other banks (committed or uncommitted credit lines)
    • Balances with other banks available for intraday settlement
    • Payments received from LVPS participants, other payment systems or through corresponding banking services (3rd party)
  • Breakdown intraday liquidity sources into its constituent elements

Total Payment

  • Report the three largest daily values of gross payments, both sent and received, as well as the average during the reporting period
  • Measure the overall size of the ADI’s payment activities each day

Time-specific and critical obligations

  • Time-critical obligations include:
    • Time-specific intraday deadline obligations
    • Obligations required to settle positions in other payment and settlement systems
    • Market activity obligations (e.g. margin requirements)
    • Payments critical to the ADI’s reputation
  • Report the three largest cumulative values of the time-specific and critical obligations intraday, as well as the average over the reporting period
  • Monitor and combine the time-specific and critical obligations during the day

Value of payments made on behalf of corresponding bank customers

  • Report the three largest daily gross values of intraday payments made on behalf of customers who use the bank’s corresponding banking services, as well as the average during the reporting period
  • Enhance understanding and calculate the daily gross value of payments the bank makes on behalf of all its customers using corresponding banking services

Intraday credit lines extended to customers

  • Report the three largest total amounts of intraday credit extended to customers (secured, committed and peak usage)
  • Monitor the total amount of intraday credit extended to customers each day

Intraday throughput

  • Report the daily average of the percentage throughput that settles each hour during the day
  • Monitor the percentage of outgoing payments (relative to total payments) that settles on specific times during the day

Benefits of Cash Visibility and Intraday Monitoring

Although it takes a lot of time and effort to achieve full cash visibility, the benefits of real-time intraday liquidity monitoring outweigh the investment. Complete, accurate, and up-to-date snapshots of current cash positions and future flows can enhance operations. These benefits include:

  • Timely and confident decisions about investments, borrowing and cash
  • Concentration and hedging
  • Less external borrowing with a clearer view of cash available
  • Strategic investing with a clearer picture of current and future flows
  • Reduced bank fees from closing or combining redundant bank accounts and/or negotiating with banks from a position of knowledge
  • Reduced external borrowing and minimized debt and interest expenses from making the best use of internal cash
  • Optimized borrowing and lending operations
  • Increased effectiveness of hedging from ensuring decisions are based on accurate information
  • Freed up excess cash from identified tangible financial savings, optimized and minimized liquidity buffer requirements and reduced intraday credit and funding costs
  • Ensured regulatory compliance aligning with APS 210 guidelines and evolving global regulation
  • Sharpened risk management that provides unique insights into reducing operational, credit, liquidity and exposure risks
  • Real-time information that provides live control over operational funding, cash and liquidity management activities

EXL’s Digital Transformation Capabilities

Our digital specialists understand both technology and the context in which it is applied. We can orchestrate complex and interdependent technologies – AI, robotics, analytics, machine learning and more – to deliver targeted solutions. Our three-pronged approach on data management enables us to deliver with almost any kind/state of data present within an organization.

Illustrative – Sample Monthly Max Usage Metrics for Intraday Liquidity Monitoring

Available Intraday Liquidity at the Start of the Business Day

Largest Positive Net Cumulative Position

Illustrative Case Study - Electronic Payment Authorization

EPA automation manages the end-to-end workflow of the customer authorization/approval process for all Automated Clearing House (ACH) debit transaction requests received by the bank. It’s integrated across multiple core banking systems to drive process efficiencies.

Business Problem

  • A global bank’s client service team manually retrieves data. It also creates, updates and closes cases within the bank’s internal case management system
  • Extensive email usage with no platform to manage cases
  • Unavailability of management information and reports
  • Nonstandard outreach to clients for approval of debit requests (emails, telephone, etc.)

Features of Solution

  • Central client contact database
  • Single platform shared across client services that connects to internal case tracking system
  • Automation of standard emails
  • Automated data extracts, aging and report creation

Illustrative Case Study – Intraday Liquidity Monitoring

EPA automation manages the end-to-end workflow of the customer authorization/approval process for all Automated Clearing House (ACH) debit transaction requests received by the bank. It’s integrated across multiple core banking systems to drive process efficiencies.

Business Problem

  • Increase capabilities for real-time monitoring of intraday liquidity
  • Need for a real-time dashboard capturing account balances
  • Additional MI reporting for Basel III regulatory reporting requirements (BCBS 248)
  • Need for an automated reporting process that translates into a near “touch-free” experience

Features of Solution

  • Auto extraction of IDLM data by customized bots from disparate systems (web based/ mainframe/ desktop apps)
  • Tivoli work scheduler for data aggregation, clean up and data-merge processes
  • Self-service tableau dashboards
  • Automated distribution of reports to stakeholders that’s accessed via emails (pdf attachment) or an intranet link as requested

Illustrative Case Study – ALCO Pack Review

EXL supported ALCO reviews at a leading Singapore bank. EXL refreshed BAU dashboards and reports and implemented industry best practices in BI reporting for product portfolios like deposit and secured lending.


  • ADI – Authorized Deposit Taking Institution
  • ALCO – Asset Liability Management Committee
  • APRA - Australian Prudential Regulation Authority
  • BAU – Business As Usual
  • BCBS - The Basel Committee on Banking Supervision
  • EPA – Electronic Payment Authorization
  • FTE – Full Time Employee
  • IDLM – Intraday Liquidity Management
  • LCR –Liquidity Coverage Ratio
  • LVPS – Large Value Payment System
  • NSFR – Net Stable Funding Ration
  • RBA- Reserve Bank of Australia
  • TAT – Turn Around Time


  • Basel Committee on Banking Supervision, Monitoring tools for intraday liquidity management, April 2013
  • BAFT Europe Council Intraday Liquidity Working Group, Intraday Liquidity Management in Europe: Industry Briefing, May 2019
  • Transaction Banking Citi Academy, Citi Intraday Liquidity Monitoring, Citibank, July 2015
  • Real-time cash-balance reporting: No need to wait, Deutsche Bank ,September 2019
  • Cash and treasury: Best practices for navigating uncertain times, Infor, August 2020
  • Intraday Liquidity Standard Recommended References Mapping and use cases, SWIFT, May 2017
  • Intraday Liquidity Reporting – Survey findings, SWIFT, May 2017




Nitin Tripathi
Senior Assistant Vice President, Analytics




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