The recent collapse of MF Global, and the resulting hunt for hundreds of millions of missing dollars
has highlighted a problem many Financial firms are facing – as well as a challenge in any other transaction
The Balance Sheet was out of date.
In the case of MF Global, it was apparently up to a week behind and as you might imagine, reflected nothing close to the reality of the firm’s actual financial health. If the regulators are examining a balance sheet that is days behind reality – it is impossible to access the risk exposure. In a more positive light, this capability is highly desirable for Corporate Management – the more current their view of the balance sheet is, the better able they are to manage their firms.
The primary reason for this lag between the actual risk exposure and the Balance Sheet is the system of Batch Processing that is used to update the general ledger. Most firms run dozens to hundreds of batch reports every night that total up the positions. In the case of an international firm, consolidated reports may roll up the NEXT day, and so on. Eventually all these reports are totaled up and the balance sheet is recalculated.
In a business where markets move in microseconds, days of delay is no way to run the business. Some firms are
moving to a real-time balance sheet however – and this offers management far more accurate insight and control.
Moving to a real-time system usually involves replacing the Core Banking applications, significant investment in
Data Center Servers and Software – and a New Network.
One bank making this move is BBVA, who have implemented a real-time set of Core Banking applications.
Thanks to new, innovative products on the market, a “New Network” that offers an ideal platform for a Real Time banking systems exists today. These new solutions offer predictable performance, extremely low network latency, and enterprise management tools to manage mission critical corporate infrastructure.
A better network can impact corporate health and competiveness in a very real way. Now is a great time to take a closer look at how a New Network can help you get there.
Exploring the vision for the networking industry and the issues shaping its future.
Vice President, Business Strategy and Marketing
Software Solutions Division