The Bank of Papua New Guinea (BPNG) is pleased to announce it has partnered with network analytics specialist FNA to monitor intraday liquidity and understand systemic risk.
BPNG’s newly formed Payment Oversight, Compliance & Monitoring Office will use FNA’s technology to gain a better understanding of liquidity and risk within its RTGS payment system. The Bank’s payment system is part of the Kina Automated Transfer System (KATS), which includes four commercial banks across the region as participant members.
Part of its Suptech solutions suite for Central Banks, FNA’s software enables BPNG to run intraday liquidity simulations and stress tests. As a result, BPNG is able to measure the impact of stress events on its member banks and payment system. Integrated into the Bank’s own internal reporting, The Payment Oversight, Compliance & Monitoring Office receives daily notifications on systemic risk level and additional alerts, should a bank encounter liquidity issues, allowing BPNG to effectively monitor and manage risk in real-time.
Network analytics and simulation technology are fast becoming critical components of effective, technology-driven supervisory regimes. When coupled with Suptech initiatives, network analytics enables central banks and financial institutions to understand how their financial networks function, making it invaluable when making both micro and macro policy decisions. Similarly, simulation provides a laboratory setting, wherein supervisors can analyse the probable effects of different scenarios, stresses and disruptions on the financial system.
Kimmo Soramäki, Founder & CEO of FNA, commented: "We are thrilled to partner with the Bank of Papua New Guinea to enhance their monitoring capabilities and strengthen their understanding of liquidity and systemic risk. This collaboration exemplifies the growing importance of network analytics and simulation technology, equipping central banks and financial institutions with valuable insights for informed policy decisions."
Francis Poko, Manager, Monitoring & Analytics Unit, Payment System Oversight & Compliance Department, Bank of Papua New Guinea added: ““We are very proud to work with FNA, a global leader in Suptech & network analytics, to understand systemic risk and liquidity usage within BPNG’s payment system. The simulation and stress-testing technology provided by FNA has helped our team to have a full and better visibility of the commercial banks’ usage of intraday liquidity. We look forward to continuing our collaboration with FNA.”