SunGard has launched Ambit Liquidity Optimisation to help banks minimise the impact that cautious liquidity reserve strategies are having on their return-on-equity (ROE). The technology will help banks identify opportunities to release available funds for revenue generation, reveal intra-day investment opportunities for better returns, and refine cash and payment processes.
Ambit Liquidity Optimisation will help banks optimise liquidity usage and revenue generation, while remaining within liquidity guidelines and policies through accurate stress and contingency planning, liquidity buffer calculation, and transfer pricing. It will also help banks reveal ‘hidden’ cash by providing an enterprise-wide view of liquidity and risk and real-time validation of cash flows and liquidity positions. Finally, it will help banks refine how they move cash through the business, facilitating real-time validation of cash flows and liquidity positions.
“Satisfying the requirements of new regulations comes at a significant cost to banks and the implications of meeting regulation go well beyond the direct costs of adoption. In addition, proposed regulatory amendments from regulators such as the UK’s Financial Services Authority [FSA] may require banks to hold even greater intra-day liquidity, placing further limits on the investment options available for maximising revenue generation. This excess liquidity requirement represents a potentially significant loss of revenue or, at a minimum, an opportunity cost to the business,” said Christine Barry, research director with Aite Group.
David Hamilton, president of SunGard’s banking business, said: “As banks reduce their appetite for risk post-financial crisis and seek to comply with new regulations, many are now holding excess liquidity to guard against possible market volatility and further regulation. Ambit Liquidity Optimisation gives banks clarity on their ‘cost of cash’, to help ensure that while regulatory requirements for capital adequacy are met, cash and liquidity reserve strategies are not limiting organisational profitability and growth objectives.”
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