Fewer than four in 10 banks (39%) have their payments confirmed in real-time by their Nostro service providers, a survey by SWIFT suggests. This is despite it being a critical step for banks to meet the intraday liquidity monitoring rules set out by the Basel Committee on Banking Supervision (BCBS) in April 2013.
SWIFT’s survey of 150 industry professionals evaluates the implementation status of the BCBS monitoring tools for intraday liquidity at financial institutions (FIs). The survey also captures market views on collaborative solutions as a means to drive down implementation costs.
With banks expected to start using the monitoring tools from January 2015 and full implementation to be completed within two years, only 68% of respondents have started a project of which 31% of banks surveyed are at the implementation stage.
Meanwhile, 37% have started an initial evaluation of their readiness, leaving 32% of banks currently without a process. The survey also shows that many countries have not yet translated the tools into detailed requirements, steering the industry towards a short term pragmatic approach.
Additional key findings from the report include:
- Seventy-four per cent of banks will use the credit/debit confirmations (MT 900/910) in the first instance to build their liquidity monitoring tools.
- Forty-two per cent of respondents confirmed that they do not have a global view of the intraday liquidity usage for their Nostro accounts.
- Eighty-nine per cent of market participants surveyed are supportive of a collaborative approach to reduce the overall implementation cost for the industry and speed up issues resolution.
“The industry is moving in the right direction, but with a large number of banks still evaluating or without a plan for their BCBS liquidity monitoring project, there is a lot more progress to be made,” said Catherine Banneux, senior market manager at SWIFT.
“SWIFT can help banks with these projects by providing a set of pragmatic solutions that leverage existing infrastructures and data formats.”
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