Bank of Papua New Guinea deploys FNA’s simulation and stress-testing technology

The Bank of Papua New Guinea (BPNG) has tapped FNA’s simulation and stress-testing technology to monitor intraday liquidity and understand systemic risk.

FNA is a UK-based leader in Supervisory Technology (SupTech) and Regulatory Technology (RegTech) that provides a SaaS Platform to map and monitor complex financial networks and to simulate operational and financial risks.

BPNG joins some of the world’s largest central banks, financial market infrastructures, and leading financial institutions that have implemented FNA’s solutions.

How FNA’s analytics work at Bank of Papua New Guinea

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 analyze the probable effects of different scenarios, stresses and disruptions on the financial system.

The central bank’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 payment system is part of the Kina Automated Transfer System (KATS), which includes four commercial banks across the region as participant members.

FNA’s software enables BPNG to run intraday liquidity simulations and stress tests so that the central bank can measure the impact of stress events on its member banks and payment system. 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.

Growing importance of network analytics and simulation technology

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.”

Kimmo Soramäki, Founder & CEO of FNA, said: “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.”

FNA’s Founder and CEO Kimmo Soramäki started his career as an economist at the Bank of Finland where he developed in 1997 the first Simulator for interbank payment systems. In 2004 while at the research department of the Federal Reserve Bank of New York, he was among the first to apply methods from network theory to improve our understanding of financial systems.

During the financial crisis of 2007-2008 Kimmo advised several central banks, including the Bank of England and European Central Bank, in modeling interconnections and systemic risk. This work led him to found FNA in 2010 to develop software for solving important issues around financial risk and for exploring the complex financial networks that play a continually larger role in the world around us.

FNA now helps financial authorities and market infrastructures to make the financial system safer and more efficient. Kimmo holds a Doctor of Science in Operations Research and a Master of Science in Economics, both from Aalto University in Helsinki.