[ T H O U G H T
Example output for intra-day liquidity usage
L E A D E R S H I P ]
The Deutsche Bank view
In times of evolving industry change,
inefficiencies in settlement could
result in a financial and reputational
impact for financial institutions. These
challenges have led us to focus on two
areas.
First, working collaboratively with
institutional and corporate clients to
gain an intimate understanding of their
securities settlement challenges, and
leveraging new technology to provide
superior services in compliance with
market participant regulation.
Second, partnering with data analysts
to uncover the intraday liquidity behav-
iour of our clients and extracting the
intelligence needed to support them
in meeting increasing regulatory and
treasury optimisation requirements.
Fiona Gallagher,
Head of Securities
Services, Deutsche
Bank
“The insight gained from analysing and condensing large
data sets into actionable insights enables effective decision-
making and delivers tangible benefit”
MIKE CLARKE, PRODUCT MANAGEMENT, SECURITIES SERVICES AT DEUTSCHE BANK
a much faster turnaround time to their
queries, which is particularly important
to help them manage trades near market
settlement cut-off time and prevent trade
failures that could potentially lead to
financial loss or reputational risk.
Providing data insights in Securities Ser-
vices related cash liquidity
The second project addresses the height-
ened focus on cash liquidity within the
financial services industry. Treasurers
need visibility into their company’s cash
positions globally to optimise their avail-
able liquidity, reduce funding costs and
maximise return on cash. Furthermore,
financial institutions are having to prove
to regulators that they know their availa-
ble sources of liquidity and have adequate
capital reserves in the event of a crisis.
Deutsche Bank’s Securities Services
partnered with the bank’s Data Labs to
develop a data analytics model on their
Enterprise Analytics Platform that graph-
ically shows clients’ cash liquidity usage
and how this corresponds to Deutsche
Bank’s funding provision in the market.
As a result, Securities Services is able to
provide more detailed liquidity insights
at the client level and review its market
funding allocations to ensure they are
appropriate to cover these needs.
In an initial 12-week proof of concept, 18
months of cash and securities settlement
information for a selection of European
markets was brought together, analysed
and presented via dashboards to provide
insights into client settlement activities
that can be viewed by, for example:
• Currency of settlement;
• Place of settlement;
• Time period; and
• Cash account.
This data transparency enables clients
to better understand when in the day
their peak liquidity usage occurs, empow-
ering them with the opportunity to modi-
fy their cash account funding behaviour.
According to Mike Clarke, product
management, Securities Services at
Deutsche Bank, “The insight gained from
analysing and condensing large data sets
into actionable insights enables effective
decision-making and delivers tangible
benefit.”
What are the next areas of focus?
Having successfully deployed these two
example solutions, the focus now shifts
towards widening the scope to cover
more markets and clients, as well as ad-
dress further problem statements through
collaborative opportunities.
As an example, settlement efficiency
will continue to be a key focus area for
data analytics to assist in understanding
the impact of the penalty regime of the
Central Securities Depositary Regulation
(CSDR). Under CSDR failing transactions
in the market will be subject to fines and a
mandatory buy-in introduced after a trade
has failed for four days. By providing data
insights into patterns in pending or failed
transactions, clients will be able to iden-
tify the key drivers behind failures and
directly address the root cause, avoiding
the potential penalty impact.
Fall 2018
globalcustodian.com
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