Mastering Financial Resource Management with the success story of a Tier 1 UK bank

Learn how a Tier 1 UK bank’s Group Treasury Department partnered with Opensee to create a robust Financial Resource Management platform for fast and effective liquidity and capital reporting.

Christophe Rivoire
April 11, 2024
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Financial institutions are under pressure in regards to capital adequacy, liquidity, and risk management. Despite the increase in regulatory requirements over the years, aggressive interest rate hikes since March 2022, aimed at taming persistent inflation, precipitated a significant regional banking crisis in 2023.

This response, while necessary, brought about an overwhelming regulatory reaction and substantial capital costs. It was a reminder, if one was needed, that efficient capital and liquidity risk management are crucial for financial institutions to ensure stability, regulatory compliance, and effective risk management. This cannot be done without powerful analytics solutions that centralize fragmented datasets and provide comprehensive insights, scenario analysis, and real-time monitoring. In a previous blog, we covered the importance of cross-risk analytics in the context of Financial Resource Management (FRM) and six principles which are critical. 

Let’s explore how Opensee answers these requirements, especially around liquidity risk, and look at an example of a real implementation. 

The Importance of Efficient Liquidity and Capital Management

As an integrated Data Platform combining data management at scale and real-time analytics,  Opensee has been at the forefront of revolutionizing how financial institutions navigate the complex landscape of risk management and capital and liquidity resources with the need to leverage ever-growing datasets.

In the Asset-Liability Management (ALM) and treasury area, Opensee's platform offers a wide range of features from cash flow and scenario analysis, to handling diverse and non-linear  calculations, like NSFR (net stable funding ratio), LCR (liquidity coverage ratio), and other internal liquidity metrics. But more than the calculations, the solution offers the explainability of all these numbers with multi-dimensional analytics capabilities on the full data history and a sophisticated data versioning module allowing ‘what ifs’. This empowers treasurers to manage liquidity with precision, simulate future positions, and explore new possibilities with embedded AI data quality and data exploration tools.

Opensee does this at great speed, all while providing users full autonomy and, eliminating trade-offs between volume, performance, and granularity of datasets. The platform leverages horizontal scalability of disks, offering virtually unlimited capacity on a cost-effective infrastructure while maintaining RAM-like speeds. Beyond providing full access to the whole dataset and dynamic reporting features to multiple users, Opensee enables the understanding of what is relevant, leveraging native custom data quality checks and Python calculator capacities that can be easily updated.

Opensee goes beyond traditional approaches by centralizing multiple datasets around risk metrics, profit-and-loss information, liquidity and capital, and collateral usage. This centralization allows for a simultaneous, comprehensive view of the impacts on all dimensions, optimizing the entire 'utility function' rather than individual metrics. The enhanced data capacity offered by Opensee represents a groundbreaking shift that enables banks to optimize their resources efficiently and strategically.

In this challenging landscape, Opensee tackles the operational and data silos that impede effective Treasury Risk management, by encouraging domain-level ownership and governance. 

By embedding self-service analytics and decision-making tools within the domain of the professionals who use them, Opensee helps each domain own and quality-control their data, leading to more accurate risk models, predictions, and ultimately, decision-making.

Success story of a Tier 1 UK bank

A Tier 1 UK bank’s Group Treasury Department partnered with Opensee to create a robust Financial Resource Management platform providing better liquidity and capital reporting.

The objective was to significantly reduce response time to business demand and ensure comprehensive real-time visibility across all risk and liquidity measures. Opensee’s platform allowed the standard processing time to be cut down from weeks to less than a day, enabling re-runs with full confidence in completeness, for liquidity, interest rates, and banking book metrics.

“With Opensee, we’ve boosted our query performance across very large volumes of trades and flows, which was originally very slow, possibly resulting in time outs,” said Group Treasury  Department Director.

Opensee’s cloud-native architecture and ultra flexible data modeling, empowers queries in seconds across billions of data points. Users can dynamically adjust dimensions in real-time, eliminating the need for repetitive data extracts.

The bank also faced complexity due to numerous legal entities, each requiring the same regulatory reporting framework with local specificities but with unique what-if scenarios. Opensee’s platform combines datasets from liquidity (LCR, NSFR…), IRRBB (NII, EVE…) and RWAs, with the ability to group by products, business hierarchies, FX translations, and to drill down to the account or deal level.

Beyond Management Information with multi-dimensional analytics capabilities, the Group Treasury team has identified other applicable use cases for the FRM Data Platform including:

  • Impact Assessment (analysing the effect of selling or buying certain types of loans and securities for the Asset / Liability Committee, modeling the effect of macro events very quickly, such as FX depreciation in a stress testing exercise)
  • Resource Management could complete the capacity to assess the impact of managing actions and simulate the allocation of identified buffers to different categories (for example see the overall LCR percentage, the Liquid Asset Buffer, the Net Liquidity Outflows,…)

Opensee’s solution not only addresses the challenges faced by financial institutions in managing capital requirements and liquidity risk but goes a step further in optimizing financial resources comprehensively and efficiently. 

About the author: Christophe Rivoire joined Opensee in 2019 as Senior Advisor before becoming Head of Strategy and UK Country Manager. Before joining Opensee, he spent more than 25 years in the Banking industry and especially in Fixed Income Trading in Europe and in the US. He started his career at Louis Dreyfus Finance before joining HSBC in 1998 where he held various responsibilities. Combining Risk, Trading, Technology has always been at the centre of his interests

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