European Bank EPM implementation
This large bank is an international financial services organization that provides a comprehensive, integrated range of financial products and services, with a specialized focus on agricultural needs. Founded by Dutch farmers in the 1890's, the bank today is an AAA rated, global financial services leader, with over $600 billion in assets, 9 million customers, and operations in 35 countries.
At this bank, the major lines of business are:
- Corporate Banking.
- Capital Markets.
- Mergers and Acquisitions.
A bank team studied their finance functions. A summary of the findings are depicted below:
- Manual work continues to be above acceptable levels as existing data warehouse has been built over many years.
- There is a need to leverage the latest technology.
- To improve the reconciliation process between the transactional systems and the General Ledger, and to include all the transactional systems in the reconciliation process.
As part of the bank’s response, a team was formed to investigate technology alternatives and to propose a strategy for addressing these issues, particularly as they relate to the daily/monthly/yearly reporting processes.
- Create a new, tightly integrated legal, regulatory and management reporting process, leveraging use of up-to-date technology:
- Improve and enhance the “Financial” data standards reflecting today’s environment .
- Establish stronger linkage between transaction sources and PeopleSoft GL financial reporting .
- Avoid storing data in multiple systems to improve reconciliation and avoid redundancies.
- Common code block engine for all the processes (transaction as well as PeopleSoft GL) .
- Single data warehouse for analysis and reporting .
- Portfolio based reporting .
- Open integration for new business requirements .
- Drill back capability (From ledger level lines to instrument level details) .
Simplified data collection process
Dynamic web delivery and online analytical modeling
Highly automated reporting tools
A strategy for implementation of the software was developed, and approved by the senior management at the Bank.
Bank used EPM as a centralized data warehouse to capture all the transactional and financial data for the Bank, EPM feeds from ODS and DW layer tables to provide the following data for the engines and processes. The key feeds provided by EPM are:
- Basel-II feeds to corporate headquarters .
- Feeds to the Regulatory Reporting System (FIRE) .
- Reports and feeds to the Treasury and Funding front-end systems .
- Reports and feeds for Portfolio Management systems .
Source Systems feeding to PeopleSoft EPM are:
- ACBS (Advanced Commercial Banking System) for Facilities and Loans.
- Flex Cube.
- IBS for Facilities, Loans, and Money Market transactions.
- DEVON , READQ, and ARTS for trades and derivatives.
- CAMRA for investments.
- PeopleSoft Financials for Ledger and Journal tables.
EAPT designed standard interface templates from each of these systems to capture key elements of the data, which are required for Basel II framework. EAPT also developed unified data delivery mechanism from PeopleSoft EPM to the EC/RAROC (Economic Capital/Risk-Adjusted Return on Capital) Reporting.
EAPT provided technology architecture and functional subject matter experts to the Basel-II implementation at the Bank International to sign off Americas Data Capture, and is now rolling out this solution to different regions such as Curacao , Asia and EMEA Home countries.
- Nine legacy data warehouses were merged into the PeopleSoft Enterprise Warehouse.
- Data is brought over to the ODS (Operational Data Store) layer on an incremental basis, thus ensuring availability of historical data in the warehouse. The business users now have the capability to run any existing report as of a previous date. The reporting layer in the ODS generates all the existing reports. The legacy data warehouses only had snapshots of the most recent day, month, and year .
- Additional interfaces were identified to feed EPM Data Warehouse, which primarily deal with derivatives, fixed income securities and securities finance. Lookup tables were extensively used to validate and cleanse the transaction data coming over to the ODS layer. Screens were developed for maintaining control information from the transactional systems.
- The code block engine was completely reengineered in EPM to accommodate additional sources seamlessly. The code block engine converts the transactional chart of account and other dimension values to the general ledger equivalent values.
- All reconciliation between the general ledger data and transactional systems happens in one central place (the ODS layer).
- Provided standardized feeds for external, management, and regulatory requirements.
- Created transformations to the International Financial Reporting System to meet IASB (International Accounting Standards Board) Requirements.
The goals of Phase II are as follow:
- Use Financial Insights and Profitability Insights.
- Create a value-added reporting layer to leverage all the transactional data within EPM.
- To meet all the requirements of Basel II Accord.
- To support portfolio analysis and create a new Credit Reporting System within EPM.
- Calculation of Economic Capital, Allocation of Economic Capital, and Calculation of RAROC (Risk-Adjusted Return on Capital).