Dependency mapping of a payment chain
Each step from customer initiation to final settlement is traced to the systems, providers and liquidity it needs, so single points of failure and shared processors are visible before an outage reveals them.
GRA · Fintech Nexus
Spatial financeWhere capital meets hazard, exposure and transition
Payment and financial market technology
Payment and financial market technology is the base of this field: the messaging, clearing, settlement and liquidity systems through which value moves. Applied to risk, it traces how a fault, an attack or a liquidity shortfall travels from one participant or provider through a system to the wider economy, and which design choices contain it.
01Register
Payment and financial market technology on the record.
Method recordSTEM method
- MethodPayment and financial market technology
- Applied inFintech Nexus
- Data5 inputs
- Checks4 validation steps
- Canonical pageSTEM Commons
02Application
What payment and financial market technology does here.
Payment and financial market technology covers the systems that clear and settle transactions and support trading. Their continuity is essential for economic activity and crisis response. In capital markets and investment, cyber and digital resilience and digital public infrastructure, payments analysis shows how operational outages or cyber events can freeze liquidity across the economy. It informs resilience standards and contingency arrangements. The canonical description is on the STEM Commons.
Liquidity stress simulation
Settlement records are replayed under scenarios such as a participant default, a weekend outflow or a delayed central bank window, to show where queues and gridlock build and how liquidity-saving mechanisms respond.
ISO 20022 data-quality assessment
Message fields are checked for completeness and structure across migration and translation points, to find where data used for screening, reconciliation and fraud detection is truncated or lost.
03Stress test
How a shock to assets becomes a system loss.
The equity the system loses after interbank contagion, against the initial hit, as leverage, interconnection and recovery rates change, the core of a macroprudential stress test. Teaching model with stated illustrative values, not a prediction.
Controls
- Fall in external assets
- 2.0%
- Leverage (assets over equity)
- 10 times
- Interbank share of assets
- 10%
- Recovery on interbank claims
- 40%
- Banks in the system
- 20
- Core banks
- 20% of banks
Readouts
- Equity lost to the initial shock
- 18.0%
- Equity lost after contagion
- 45.0%
- Added by contagion (DebtRank)
- 27.0 points
- Banks in default
- 0
Numbers, methods and sources
| Round | System equity lost (%) | Banks in default |
|---|---|---|
| 0 | 18.00 | 0 |
| 1 | 28.80 | 0 |
| 2 | 35.28 | 0 |
| 3 | 39.17 | 0 |
| 4 | 41.50 | 0 |
| 5 | 42.90 | 0 |
| 6 | 43.74 | 0 |
| 7 | 44.24 | 0 |
| 8 | 44.55 | 0 |
| 9 | 44.73 | 0 |
| 10 | 44.84 | 0 |
| 11 | 44.90 | 0 |
| 12 | 44.94 | 0 |
| 13 | 44.96 | 0 |
| 14 | 44.98 | 0 |
| 15 | 44.99 | 0 |
| 16 | 44.99 | 0 |
| 17 | 45.00 | 0 |
| 18 | 45.00 | 0 |
| 19 | 45.00 | 0 |
| 20 | 45.00 | 0 |
| 21 | 45.00 | 0 |
| 22 | 45.00 | 0 |
| 23 | 45.00 | 0 |
| 24 | 45.00 | 0 |
| 25 | 45.00 | 0 |
| 26 | 45.00 | 0 |
| 27 | 45.00 | 0 |
| 28 | 45.00 | 0 |
| 29 | 45.00 | 0 |
| 30 | 45.00 | 0 |
Methods
- DebtRank Battiston and others (2012), Scientific Reports 2:541
- Differential DebtRank Bardoscia and others (2015), PLOS ONE 10
- Contagion in financial networks Gai and Kapadia (2010), Proc. R. Soc. A 466
- Clearing in financial networks Eisenberg and Noe (2001), Management Science 47
- Uncertainty fan (parameter Monte Carlo) Spiegelhalter, Pearson and Short (2011), Visualising uncertainty about the future, Science 333
- One-at-a-time sensitivity (tornado) Saltelli and others (2008), Global Sensitivity Analysis: The Primer, Wiley
Data
No observed data enters this model: it runs on the teaching values set by the controls, to be replaced with a programme's own evidence.
Across the six pillars, led by Nexus Consortium
- Experiments Labs
- Built in Fintech Nexus in Foundry
- Tested at Fintech Nexus in Universe
- Codified in Finance, Insurance and the Economy in Standards
- Published in Fintech Nexus in Reports
- Taught in Faculty of Finance and Economics in Academy
04Data
What the method consumes.
Datasets and records used by payment and financial market technology on this platform, with the role each plays and the label its values carry. Sources are listed in the source register.
| Data | Role | Label |
|---|---|---|
| Settlement system transaction records | Liquidity simulation and flow analysis | OBSERVED |
| Operator availability and incident logs | Continuity and recovery analysis | Published statistics |
| CPMI Red Book statistics | Cross-country comparison of system use | Published statistics |
| PFMI assessment reports | Design and governance baseline | Published statistics |
| Participant liquidity positions | Stress scenario inputs | REPORTED |
05Exposure, loss and capital
What payment and financial market technology means for exposure, loss and capital.
The exposure, loss, scenario and capital views a risk officer, supervisor or ministry of finance would ask for, with the frameworks they report against. Structures follow supervisory and actuarial practice. Values are illustrative: never prices, ratings or advice.
Transmission channels
How a shock in payment and financial market technology reaches credit, market, underwriting, liquidity and operational risk, and feeds back.
NGFS climate scenarios · Network for Greening the Financial SystemIFRS S2 Climate-related Disclosures · ISSBTCFD recommendations · Financial Stability Board TCFDPrinciples for the effective management of climate-related financial risks · Basel Committee on Banking Supervision
06Validation
How results are checked.
Systems are tested through failover exercises, liquidity simulations and supervisory oversight. Reconciliation checks the integrity of settled positions.
| Check | How it is done |
|---|---|
| Replay against history | Simulations are run on past days with known outcomes before any scenario is relied on |
| Reconciliation | Settled positions in the model are reconciled with the operator's end-of-day records |
| Behavioural sensitivity | Results are reported across assumptions about how participants delay or withhold payments under stress |
| Operator comparison | Dependency maps and scenarios are compared with the operator's own business continuity assumptions |
Interdependence among participants and third-party providers can produce unexpected failures. Simulations may not capture behavioural responses under stress.
08Stewardship
Who maintains the method.
Payments and Market Infrastructure stewards payment and financial market technology for the Consortium and reviews how it is applied across platforms.
09Connected
Where this page leads across the Consortium.
10Questions
Questions and answers.
What are the limits of payment and financial market technology in this field?
Interdependence among participants and third-party providers can produce unexpected failures. Simulations may not capture behavioural responses under stress.
How are results checked?
Systems are tested through failover exercises, liquidity simulations and supervisory oversight. Reconciliation checks the integrity of settled positions.
Are the values on this page real?
The data names, roles and checks are real descriptions of practice. The canvas shows a design of the method's use, not a run; no result is reported here.
Where else is this method applied?
The canonical method page lists every platform that applies it.
ReportsContribute
Contribute evidence from this page.
Reports is the Consortium's quarterly publication. What you know about this subject can become evidence, a case or a correction in the next edition, credited to you and published under CC BY 4.0 where it is your own work.
Global Risks AllianceFintech NexusExponential TechnologyFinance and Insurance Readiness
- EmailGateway GW-GRASend it from this pageEvidence, a correction, a case, a method, a review, a translation or profile input. It arrives tagged with this page, so the editor who owns it receives it.
- ZenodoOpen depositDeposit it and submit to the communityPublish your own record on Zenodo with your ORCID iD, then submit it to the Reports community there. Curators review it; the DOI stays yours.
- ReportsGlobal Risks AllianceSee every way to contributeThe contribution types, how each is reviewed, what credit you receive, the licence and what is never accepted.
Never send personal data, sensitive infrastructure detail or anything you have no right to share. A contribution is reviewed before use; sending it confers no authorship or editorial rights, and sponsorship never buys a finding.
Fintech Nexus
Bring an exposure or capital question to the Alliance.
Information and enquiries are open today. An enquiry receives a reference and names the next step; applications, payments, compute allocations and registrations open only when their team, terms and review capacity exist.
Legal
Legal documents.
Maps, data and figures on this site are shown for context and general information. They are not advice, forecasts or warnings; the limits of the information are set out in the Disclaimers and Data Notices.