Baton Systems has introduced new treasury management tools designed to optimize intraday liquidity, reduce costly buffers, and mitigate risk in real time.
This new functionality, available now, integrates seamlessly with Baton’s Core-Payments solution, allowing clients to transform how they manage intraday liquidity with the flexibility to configure the tools to meet their firm’s specific requirements.
How to predict and optimize intraday liquidity use
Baton, a global capital markets technology provider, facilitates the optimized settlement of $20-30 billion in asset value daily. The company’s new liquidity management tools enable firms to significantly reduce financing costs, which have risen due to interest rate normalization.
Baton highlights that these tools also address increased regulatory scrutiny on financial resilience following the market disruptions of 2023.
Treasury teams have traditionally faced challenges in predicting and optimizing intraday liquidity usage. With limitations in identifying and reallocating cash and securities, planning for intraday liquidity demands, and tracking financial health, treasury teams have struggled to implement strategies that reduce funding needs, divert liquidity to revenue-generating activities, and mitigate risk.
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The launch of these tools coincides with ongoing industry efforts to evaluate performance amid recent global equity market sell-offs and to enhance liquidity resilience in future volatile periods. In such scenarios, banks require immediate access to critical data on balances, exposures, and obligations, emphasizing the need for robust intraday liquidity management.
Baton’s tools offer treasury managers a dashboard providing real-time insights into the liquidity impact of individual counterparties across all business lines. This real-time, firm-wide visibility and control over liquidity sources improve forecasting and decision-making, enabling quick adjustments to liquidity strategies.
Treasury managers can instantly access crucial real-time data to adjust capital allocations and reactivate available capital. They can also analyze liquidity flows and trace contributing factors, gaining a clearer understanding of how different events affect their liquidity profiles and those of their counterparties.
“Urgency for a significant shift towards real-time treasury management”
By integrating real-time data with historical models, these tools help optimize payment strategies and detect deviations in market or counterparty behavior that may signal a credit crunch or liquidity issues. Using historical data, treasury managers can predict inbound payments and intraday liquidity demands, with the tools recommending the optimal sequencing of outbound payments to reduce funding costs. Additionally, the tools offer stress-testing capabilities, enabling treasury managers to assess various scenarios’ impact on liquidity and ensure that obligations are met even under challenging conditions.
Arjun Jayaram, Founder and CEO of Baton Systems, said: “Recent market events underscore the urgency for a significant shift towards real-time treasury management.
“With regulators more focused than ever on financial resilience, we’ve designed these tools to enable treasury managers to develop more robust liquidity strategies, to easily access the critical information needed to make informed decisions fast and rapidly adjust strategies to effectively respond to and proactively optimise resources as market conditions change.”
