Show me the money, Mate!

APRA, ADIs and Banking

In banking parlance, you probably have heard the words ‘clearing’ and ‘settlement’ – especially in the context of payments. Simply put, it denotes the step changes to fulfill the promise of transfer of material (in this case monies) from one party to another. When you extend this concept across geographic borders, currencies, time-zones, languages and deposit-taking institutes – you (eventually) get exposed to complexities of international trade!

While digitalization has driven exponential growth for Australian Deposit-taking Institutions (ADIs) by providing access to international markets, it also exposes them to international regulations and risks driven by instability (ease of doing business/political/climatic) in other markets and language barriers.

Australian Prudential Regulation Authority (APRA)’s guidelines clearly highlight the requirement for Australian Deposit-taking Institutions (ADIs) to actively manage their intraday liquidity positions to meet the payment and settlement obligations on a timely basis.

While APRA’s key driver is for ADIs to manage their liquidity risk exposure, ADIs are increasingly realizing additional benefits from the increased visibility and control offered by Axway’s Decision Insights offering. As an industry-leading business activity monitoring platform, Axway is helping ADIs proactively manage opportunity costs of holding excess liquidity vis-à-vis interest rate changes across currencies.

Some of the key capabilities of the Decision Insights platform include:

  1. Rich dashboard interfaces with alerting capabilities provide operational intelligence for the Command Operations Centre of the ADIs
  2. Baselining – intelligent learning of pattern behaviors to dynamically set thresholds, proactively detect anomalies
  3. Replay and analyze scenarios – in real-time and historically – offering deep insights
  4. Non-intrusive absorption of data into the platform from various source types

Benefits for ADIs

  1. Revenue generation – Near real-time access to Nostro balances ensures better cash usage to avoid uninvested funds and drive revenue generating opportunities
  2. Cost effective – The centralized platform provides near-real time view of payment statuses across geographies and currencies
  3. Managing risks – Improved insights on participant bank’s intra-day liquidity position to avoid over drawn balances
  4. Customer satisfaction – Proactive and timely settlement within SLAs

Axway is enabling ADIs to not just comply with regulatory requirements, but also helps create revenue generating opportunities through better cash flow management.

In essence, helping generate more economic activity while safeguarding and advancing interests of local businesses in Australia.

And as they say, show me the money, mate!

Open banking will herald a new era of innovation, but there remain significant challenges

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