DLT ‘perfect solution’ to deliver real-time liquidity management
R3 believes distributed ledger technology (DLT) could be the answer to overhaul the necessary infrastructure.
Market participants are crying out for real-time visibility of their cash accounts, as the velocity of money in the financial system increases.
R3, a distributed database technology company, believes DLT could be the perfect solution to overhaul liquidity management infrastructure, harmonizing trade booking and reconciliation into a single process.
However, realising such an idea is about more than building a new trade booking platform and convincing institutions to buy it.
“There are a number of obstacles facing the treasurer looking for more efficient liquidity management, and they are not all to do with technology,” says Craig Ramsay, head of innovation for global liquidity and cash management at HSBC.
“Other challenges include differences in the regulatory environment, clearing times and data requirements, which can all vary by country.”
Open banking will continue to improve the real-time accessibility of this information - Craig Ramsay, HSBC
The regulatory implications in particular are immense.
If HSBC wants to move money between branches in Hong Kong and the US, from a technology perspective this requires no more than a simple click, but the need to clear a number of regulatory hurdles around things such as anti-money laundering can delay the transaction.