Baton Debuts Intraday Liquidity Tool

Baton Systems has introduced new treasury management tools, the firm says, designed to optimise intraday liquidity, reduce costly buffers and mitigate risk in real-time, thus alleviating some of the pressures from the recent interest rate normalisation.

Baton observes that lacking real-time information, an understanding of past liquidity behaviour, and the ability to control the release of individual payments effectively, treasury teams have until now struggled to accurately predict and optimise intraday liquidity use. As a result, they have been unable to effectively identify and repurpose available cash and securities, plan for intraday liquidity demands or accurately track intraday financial health. “These factors have restricted their ability to test and implement strategies to reduce funding needs, divert available liquidity towards revenue-generating activities and proactively mitigate liquidity risk,” the firm states.

The new tools are integrated into Baton’s Core-Payments solution, and provide treasury managers with a dedicated dashboard with real-time insight into how individual counterparties are impacting liquidity across all business lines. “By providing real-time firm-wide visibility and control across all available liquidity sources, these tools enhance forecasting, allow for more informed decision-making and the swift adjustment of liquidity strategies,” the firm says.

Treasury managers can access critical real-time data to proactively adjust capital allocations and reactivate available capital. Furthermore, Baton says they can analyse individual liquidity flows and trace contributing factors to better understand how different events impact their own liquidity profiles and those of their counterparties.

By integrating real-time data with historical models, this insight can be used to automatically adjust and optimise payment strategies as the day’s events unfold and to instantly detect deviations in market or counterparty client behaviour, highlighting a potential credit crunch or liquidity issues, it explains.

Using counterparty-specific historical data, treasury managers can also predict the timing of inbound payments and intraday liquidity demands. The tools will then recommend how outbound payments can be optimally and intelligently sequenced and scheduled to lower funding costs. Additionally, the tools include stress testing capabilities, allowing treasury managers to evaluate the impact of different scenarios on liquidity and ensure counterparty and throughput obligations are met even in the most challenging conditions.

“Recent market events underscore the urgency for a significant shift towards real-time treasury management,” says Arjun Jayaram, founder and CEO of Baton Systems. “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.”