According to the current draft version of the Basel Committee’s guidelines on intra-day liquidity, financial institutions in member states will be compelled to align their practices with newer, more stringent reporting requirements. Even those institutions already on the road to compliance with Basel III will need to revise their plans, which likely do not yet include intra-day liquidity, “funds that are accessible during the business day, usually to enable financial institutions to make payments in real time.”
To be compliant with the new intra-day liquidity guidelines, banks must be able to:
Based on the approval history of past guidelines, banks can expect to see finalized guidelines before the end of 2012, and be required to fully comply between 2015 and 2018.
The requirements will have a significant impact on the data collected, stored, and accessed at affected organizations: not only must more data be collected from payment and settlement systems (which will need a significant overhaul), but ETL procedures must be ramped up to provide near-real-time data. Further complications include adapting to transaction time differences and various currencies, and, critically, a consolidated view of positions across multiple operational systems at multiple lines of business (retail, wholesale, etc.).
This is not the first time we’ve heard about near-real-time, and it won’t be the last. Future business and regulatory requirements will most certainly include some degree of near-real time data. Organizations that want to meet requirements, and stay ahead of the competition by exploiting the business benefits of near-real-time data, are advised to upgrading their Information Management sooner rather than later.
The challenge is complex, but with the right approach, your current infrastructure can be adapted. Consider getting the advice of an organization with a deep understanding of financial services organizations and regulatory regimes, as well as the Information Management expertise to move your compliance initiative forward.