European bank

consolidates data to meet risk reporting deadline

SkySparc OmniFi helps SEB Estonia meet regulatory deadline by providing a flexible solution for ‘future-proof’ compliance

Challenges

Part of the Basel III capital framework, BCBS 239 requires banks to ensure data used for risk calculation and reporting meets the quality levels needed to accurately identify and address risk buildups. Banks must ensure their risk data aggregation processes – ideally automated – can support principles of accuracy, integrity, completeness, adaptability and timeliness, while risk reporting processes should deliver accurate, clear, complete reports to enable timely, effective decision making.

All aggregated and underlying data must be accurate, available and adaptable.

Subject to Basel III, SEB’s Estonian entities had to report daily figures to a legacy system in Lithuania, where reports for SEB Group’s Baltic entities are collected for daily transmission to HQ in Stockholm.

As such, SEB had to implement an automated reporting solution across three legal entities in a short time-frame, which meant accurately extracting underlying data for use in risk reports.

Key challenges:

  • Data for financial transactions had to be sourced from original systems, rather than a data warehouse;
  • Data had to be accessed by drilling down to the underlying transaction, but presented in a pre-determined format;
  • Static transactional and calculated data had to be extracted from multiple modules;
  • Calculated data was not available in the database, so had to be accessed via a complex API.
No one else had the combination of expertise and software needed to automate the management and transformation of our data in the way that SkySparc achieved.

Tõnu Tomann, Markets Team Lead, IT development, SEB Baltic

Solution

One month after SEB received requirements for Basel III reporting from SEB Group head office, SkySparc presented its proposal for deployment of its OmniFi data management tool. SkySparc built and tested prototype interfaces within three months. The interfaces were adapted to account for adjustments to reporting requirements, before the project went live.

Key elements of OmniFi’s innovative approach to Basel III risk reporting compliance include:

1) Automated extraction of transaction level, calculated and static data from multiple systems, modules and entities, via flexible interfaces with APIs (not limited to stored data in databases);

2) Automated mapping of extracted data to new formats, which are then used to build interfaces for daily reporting as required under Basel III specifications, thus avoiding need to develop new code or impose in-house development burdens;

3) Future-proofing of clients’ reporting capabilities in a fast-changing regulatory environment via easily replicable solution, which can be adjusted to meet new requirements, without diverting internal resources.

OmniFi delivered connectivity to 100% of the data and business logic in the API, avoiding the need to develop interfaces by coding. OmniFi enabled SEB to build new regulatory interfaces with great transparency and without new technical development. Because SEB had to report for three separate legal entities, SkySparc used OmniFi to develop 15 interfaces with a high level of detail. Interfaces are scheduled nightly, enabling a STP solution, which requires monitoring only.

SkySparc’s consultants are very knowledgeable and efficient. Using their unique OmniFi software, they were able to deliver against our objectives within a tight timeframe.

Tõnu Tomann, Markets Team Lead, IT development, SEB Baltic

Results

SkySparc enabled SEB to meet Basel III reporting requirements on time and with limited impact on internal resources, via an automated solution that delivers accurate, timely risk reports. Compared to manually developing a complex interface or creating repetitive manual routines, OmniFi delivered the solution faster, with higher quality and lower project risk. SEB can easily adapt reporting output and/or add new interfaces, as regulatory requirements demand.

Long-term benefits include:

  • Future-proofing - As an easily replicable solution, OmniFi enables compliance with evolving requirements, delivering new reports in line with changing regulations;
  • More effective risk management – As per Basel III’s objectives, the solution helps SEB to provide granular reports on operational activity to assist with accurate assessment of overall risk management.