Technology

SmartStream Technologies, the financial Transaction Lifecycle Management (TLM ) solutions provider, today declared the launch of its Intraday Liquidity Stress Testing module, part of the TLM Cash and Liquidity Management suite of products.

Carrying out a stress test and running it can take up to eight weeks, with the new module it enables banks to run this in minutes which is vital for refining the scenario, making real-time decisions, reporting and risk analysis.

SmartStream commissioned research from Baringa Partners, a management consultancy firm, and the report highlighted that if a bank could cut its liquidity buffer by $6bn, it may save as much as $50m per year.

There is a definite need for banks to carry out stress trial to increase profitability and decrease the operational effort to meet the regulatory requirements.

With these considerations in mind, SmartStream received the new module to implement stress test results immediately.

The product is prepared as standalone or via the cloud.

The pandemic and chaotic situations have made this type of stress, examining more crucial and re-enforced the value of such a solution to banks.

Nadeem Shamim, Head of Cash and Liquidity, SmartStream, states: The investigation carried out by Baringa Partners in conjunction with the construction of our new module has created a great deal of interest in the market, we are currently having many detailed conversations with banks where the ability of a comprehensive solution with the flexibility of testing different stress scenarios is critical.

Also, the current turmoil in the market has had a notable impact on a banks liquidity so the capability to illustrate the possible effects of such circumstances is no longer merely a regulatory box-ticking exercise, but a matter of self-protection and even of survival for many financial institutions.

Simon Gray, Director, Baringa Partners, says: The study identifies that its no longer about reaching intraday liquidity reporting requirements, banks are now understanding the value in stress testing and having the tools to carry out complicated situations with a high level of certainty for making more well-informed decisions.

Also, the findings unveiled that it has gone from being an administrative burden to creating a robust, active framework within which to manage liquidity risk.

By simplifying the intricate and time-consuming testing process, SmartStreams solution allows banks to run a variety of stress scenarios in a short space of time, which is critical.

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