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한국히타치그룹

Adoption of ‘Simple’ ’Accurate’ ’Fast’ Funding Liquidity System

The National Agricultural Cooperative Federation of Korea (hereinafter 'National Agricultural Federation' or NACF) NACF had inconvenient and time-consuming system control issues in obtaining analytic data of fund liquidity. We would like to introduce our cases of improvements from the introduction of a new system from LG Hitachi aiming to effectively utilize analytic data for countermeasures against potential risks or decision making on a project due to unidentifiable fund liquidity of daily units etc..

Why is Liquidity Risk Management System needed?

The global financial crisis broke out due to bankruptcy of Lehman Brothers in September 2008. From this incident, financial institutions all over the world keenly realized the need for liquidity management of funds, and the maintenance of the liquidity risk management system grew urgent. NACF also recognized its insufficient resources to promptly identify and manage the funds flow which was viewed as potential risk at the company, and promptly responded with by adopting the liquidity management system.

We interviewed Mr. Yun Rae-gu of NACF who is responsible for everything from planning to application of fund liquidity system, and training for its operators.

Problems in Fund Management

【Problem 1】 Since analysis is all done manually, It is inefficient!

Mr. Yun Manual analysis using excel was performed after extracting each relevant information from various systems such as financial accounting information, management information, and marketable securities from the existing system. This method of analysis took significant time due to the complexity of the business flow and lack of efficiency, and they were prone to human error.

【Problem 2】 Short-term funding liquidity cannot be identified!

Mr. Yun Although the funds flow of the entire company can be identified from quarterly or monthly statistic results from the existing system, it was impossible to identify or analyze funding liquidity countering daily short-term changes. There have always been limitations on the accurate and prompt decision-making with the existing structure of quarterly or monthly forecasting funding liquidity in a rapidly changing economic situation. Even if a situation occurs, only follow-up measures not prompt actions could be taken.

 Mr. Yun, NACF

An accurate fund flow had to be efficiently identified day-to-day even from the aspect of strengthening the system to respond against liquidity risks, and determining an appropriate and definite business plan.

─ Mr. Yun, NACF

Problems of Existing Systems

  • Short-term daily funding liquidity cannot be identified.
  • It is impossible to analyze safe deposits which have a great range of fluctuation and is difficult to manage.
  • Manual preparation of analysis reports is inefficient.

Therefore, NACF decided to come up with an appropriate measure against these problems, and set out to adopt an independent liquidity management system made by LG Hitachi in July 2009.

The next page introduces the solution provided by LG Hitachi.

Customer:
NACF (National Agricultural Cooperative Federation)

Industries:
Financial and Insurance Activities

Region:
Korea

Release Date:
Mar. 2011

Products & Services:
Finance, IT

Solutions By:
LG Hitachi Ltd.