Intraday liquidity management has been a thorn in the side of financial institutions for many years, and it became even more problematic following the financial crash of 2007/08. Whether it is liquidity to fund wholesale market business operations or for the provision of funds to corporate clients, financial institutions are under increasing pressure to ensure they effectively monitor and manage liquidity.
The retrospective management of liquidity, where banks rely heavily on forecasts, is now deemed to be insufficient; banks can no longer afford to have funds languishing unused in accounts. But cost is not the only driver; to prevent a repeat of the global financial crisis, regulators have put pressure on banks to move from daily liquidity reporting to effective real-time liquidity management and monitoring.
