The challenge

Macro trends including an increase in oversight and regulation, and new disruptive technologies, are forcing FMIs to invest in the future:

  • 75% of central banks now run assessments with international standards (24 PFMIs)
  • 91% of central banks perform FMI oversight on an ongoing basis
  • 81% of RTGS systems are now 12+ years old, many with outdated liquidity and risk algorithms
  • New entrants to the ecosystem (challenger FMIs, cryptos, stablecoins) will be regulated and overseen
  • A $5bn blockchain market is forming a new global financial infrastructure

The FMI Lifecycle phases

  • Monitor activity and detect anomalies via automatic alerts and real-time views of payment flows – for operators, members and regulators
  • Stress test your system and its members for liquidity, operational, and concentration risks
  • Validate your system design by benchmarking its performance and risk controls. Prove ongoing benefits to your members
  • Design, simulate and evaluate alternative designs of new payment systems and Liquidity Saving Mechanisms (LSMs). Demonstrate the benefits of your system design to stakeholders
  • Build faster with a digital twin, synthetic datasets and out-of-the-box LSMs. Benchmark your system and support sales efforts
  • Go-live safely and help financial authorities understand your system, potential risks and liquidity impacts for regulatory approval

Rhomaios Ram, CEO of Fnality

 

“Using the FNA Platform, we have been able to simulate the transformational effects which Fnality will be bringing to the industry and therefore determine the significant liquidity benefits of the proposed service. This insight has enabled us to prepare, design and communicate exactly how our service will work.”

Read the Fnality Case Study > 

 

The solutions

FNA’s solutions cover the full FMI Lifecycle from inception to maturity. The FMI Lifecycle solutions support each phase of this journey, from designing and validating the system design, and building business cases for the members, to monitoring, stress testing, and optimizing.

The FMI Lifecycle solutions consists of.

  • A digital twin of the FMI, allowing, for the first time, a rapid and efficient way to test new technologies, features, changes or stresses to the system without writing a single line of code 
  • Synthetic datasets, that provide FMIs with accurate and secure data to run simulations and tests
  • Real-time dashboards for monitoring the system with full analysis of payments flows, identifying emerging liquidity issues and anomalies before they threaten the stability of individual participants or the system – both for the operator and the members
  • Real-time optimization algorithms that make recommendations on which payments to settle, at what time, and how and when to fund them
 

Dave Sissens, CEO of RTGS.global

 

“FNA’s simulation technology has enabled RTGS.global to produce analytics, using synthetic data, that will play a key part in our regulatory engagements, as well as to substantiate the systemic importance of our system”

 

Payment System Stress Testing

The regulatory and supervisory environment following the 2008 crisis significantly raised the standard for effective liquidity management. Under the Committee on Payment and Settlement Systems (CPSS) and International Organization of Securities Commissions (IOSCO) principles for financial market infrastructures (PFMIs), the requirements for routine stress testing can be costly and time-consuming.

FNA’s Payment System Stress Testing enables FMIs to comply with these standards at reduced cost and time resources. The solution helps FMIs and their overseers to better understand both the operational and financial stability implications of participants in the system. In addition, FMIs and their overseers can determine how resilient a system is on any given day and identify individual participants which might face liquidity or solvency issues in the near future.

Liquidity risks can proliferate rapidly into wider, more damaging issues. Start monitoring and stress testing straight away, so potential undetected problems can be addressed before they escalate.

More Solutions

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Suptech

Analyze and run models and simulations on large datasets to identify risks and anomalies
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National Security Solutions

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Intelligent Liquidity Optimization

AI-driven network analytics & real-time stress testing for treasuring and liquidity teams.
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CBDC Simulation

Model and simulate the impact of introducing a central bank digital currency.
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Related case studies & events

Case Study: Fnality International
Fnality International partnered with FNA to help design their new payment system and quantify the benefits for their participants by means of simulation.   Introduction   Financial markets face unprecedented challenges. These challenges include fragmented and inefficient post-trade processes, liquidity constraints and complex and costly risk management. To address these challenges, Fnality is developing a […]
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