Temenos case study - USB Bank

Case Study
USB Bank
USB Bank Addresses Its Compliance Reporting
Requirements By Adding Insight Risk Intelligence
To Its T24 Platform In A Seamless Upgrade.
Name
USB Bank
Business Benefits
Headquarters
Nicosia, Cyprus
• Reduced time taken to produce compliance • $2.8bn Assets
reports from 2 weeks to 2 days.
• 16 Branches
• Reduced reputational risk through timely
• 20,000 Retail Customers
compliance reporting to Central Bank.
• Solution fully implemented within 2 weeks.
• Packaged reports support Basel III
regulatory framework.
Sector
Retail Banking
Numbers
Temenos Case Study
01
Introduction
Timeline
U
October 2010
Data gathering and analysis at USB to replicate the system.
SB Bank (USB) is based in Nicosia, Cyprus. It has 16 branches
and provides a wide range of services, including electronic
banking to 20,000 retail customers, both business and private.
USB was recently acquired by BLC Bank, which has 34 branches in
Lebanon and is itself part of the Fransabank Group.
USB has been a user of Globus and subsequently the TEMENOS T24
(T24) core banking system since 1998, implementing most of the T24
modules in stages. “Seeing the progress of T24 gives us confidence,”
says Loukia Loukianou, Manager Information Technology at USB. “It’s
a stable environment and Temenos has always solved our issues and
given us support”.
November 2010
Replication of system, replacement of legacy risk management
software with Insight Risk Intelligence, creating reports with MS SQL
Services Reporting, running reports and testing/validation.
December 2010
Implementation at USB in only two weeks, fully operational from
mid-December.
This established relationship paid dividends in autumn 2010 when the
bank’s legacy risk management software proved so unreliable that it
threatened to cause delays in submitting compliance reports to USB’s
supervising bank, the Central Bank of Cyprus.
“We had major problems getting a
report in front of users and then there
were further issues. It could take two
weeks to get the finished report.”
Loukia Loukianou - Manager Information Technology - USB Bank
Temenos Case Study
02
Reporting Challenge
Rapid Response
USB’s immediate challenge in October 2010 was to make sure that,
by December, it was able to quickly and efficiently output compliance
reports, such as COREP (a standard report required by the European
Banking Authority), in order to submit them on time and thus avoid
penalty fines. “There was also the reputation of the bank at stake.
Other banks in Cyprus could report on time but USB couldn’t”
explains Loukianou.
USB began the implementation of Insight Risk Intelligence in October
2010 and after a smooth transition went live in December. The bank
outsourced to Temenos Consulting, with two members of the USB IT
team (one T24 developer full time and one MS SQL developer part
time) overseeing the project. The dedication and collaboration of both
Temenos and USB meant that the implementation at USB took just
two weeks.
USB’s preceding risk management solution was outdated and lacked
flexibility around data integration and Basel II report generation. “We
had major problems getting a report in front of users and then there
were further issues. It could take two weeks to get the finished report”
says Loukianou.
During one week in October a Temenos consultant gathered the
information needed to model USB’s system at Temenos’ development
centre in Chennai. During November a Temenos team of three worked
on the implementation, replacing USB’s existing risk management
solution with Insight Risk Intelligence, using Microsoft SQL Reporting
Services to create flexible reports, and finally testing and validating
the solution.
In the meantime Temenos had extended its business intelligence
(BI) offering with risk capability, Insight Risk Intelligence. Insight Risk
Intelligence offers three modules to equip banks with a state of the art Back in Cyprus, Temenos installed the tested environment without
risk management solution:
any customisation and it went live in mid-December, ready to run the
December reports. Temenos’ consultancy team also provided some
Asset and Liability Management (ALM) provides a wide range of
local customisation for Cypriot regulations so that USB could switch
advanced and comprehensive liquidity and interest rate risk analytics between ‘non-Cyprus’ and ‘Cyprus’ parameters.
and reporting, including balance sheet modelling, stress testing,
duration and liquidity gaps reporting.
Subsequently Temenos delivered training to USB staff. “After
preparing the reports for two months we got used to the procedures Regulatory Capital provides advanced credit, market and operational and now it’s a piece of cake,” says Loukianou. USB can now deliver
risk management capabilities, enabling banks to analyse exposures
compliance reports over a two-day period, including revisions based
and accurately calculate regulatory capital to meet full Basel II
on business user feedback. “We can work fast, export, correct and
compliance and assist in the journey to Basel III compliance.
deliver on time” adds Loukianou.
Market Analytics provides banks with a wide range of analysis tools
including VaR (Value at Risk) engine, yield curve modelling and pricing
tools so they can extend and improve their analytical capability. It is
underpinned by a powerful reporting engine which delivers granular
and more valuable report generation.
USB decided that the Regulatory Capital module was the best solution
to meet its compliance requirements. With T24 as its core banking
system, USB was confident that the module could be implemented
quickly and cost-effectively.
“We can work fast, export, correct and
deliver compliance reports on time within a two-day period.”
Loukia Loukianou - Manager Information Technology - USB Bank
The IT department exports data from T24 and imports data to Insight
Risk Intelligence and users can then access the data to prepare reports
themselves. This frees up the 12-strong IT team for more technical
work. “Microsoft packages are widely used in the bank so we like the
ease of use of Microsoft SQL Server” says Loukianou.
Flexible Benefits
A
s well as providing USB with the off the shelf reports it needs
to meet its compliance obligations, Insight Risk Intelligence is a
source of useful management information. For example, USB’s
accounting department produces reports around capital adequacy for
the senior management of the bank, as well as for submission to the
central bank.
“You never know what regulations are going to come out of the
blue” says Loukianou, adding that she is confident that the flexibility
of Insight Risk Intelligence means Temenos can quickly address
compliance with Basel III and anything else the regulators come up
with, including a new report broken down by risk type which the
Central Bank of Cyprus is in the process of devising.
Loukianou’s initial assessment is that implementing Insight Risk
Intelligence has saved time for both business users and IT support
staff. It has saved money because IT support staff can be redeployed
to more useful work. The threat of financial penalty has been removed
since USB’s compliance department now logs on to the Central Bank
of Cyprus server and delivers its reports on time.
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