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finance 

on windows 

“Today, the financial industry is 

focused on three areas: regulation, 

rebuilding trust and recovery” 

Microsoft technology in banking, capital markets and insurance 

Suranjan Som, IMGroup 

One week in 

Amsterdam 

The Netherlands' capital plays host to Sibos 2010 

Autumn 2010 £9 

Payments | The path to a consolidated, efficient payments landscape 

Managing risk | Meeting regulations and setting new standards 

Sibos | IMGroup takes to the floor with its desktop of the future vision

forEword 

autumn 2010 

The start of 

something new 

Welcome to the new-look Finance on Windows. As you can see, our team has been hard 

at work producing a design, which I’m sure you’ll agree is even more appealing, 

contemporary and enjoyable to read. It’s a magazine that I’ve been proud to be associated with 

for over a decade now and in that time the title has evolved to become a valuable resource 

– not only for our global partners, but also for our leading customers across the financial 

services industry. I believe that this refresh will enable Finance on Windows to evolve further 

still, paving the way for another successful decade. 

But it’s not just the new design that we are proud to talk about in this issue. As thousands 

of delegates from across the industry descend upon the Netherlands for this year’s Sibos, 

we have made this a special edition for the event. There is no doubt that as initiatives such 

as SEPA and CHAPS continue to push for consolidation across the payments landscape, 

banks need to be able to adapt quickly. Find out more about the solutions that are helping 

to overcome the limitations of legacy technology and the broad range of processes that are 

allowing banks to comply with new regulations and offer better payments services. 

Another key topic covered in this issue is governance, risk management and compliance. 

We will also look at how to develop richer customer relations through better business 

intelligence and data management. 

finance 

on windows 

Editor Rebecca Lambert, rebecca.lambert@tudor-rose.co.uk 

Features editor Lindsay James News and online editor Karen 

McCandless Senior writer Michele Witthaus Head of editorial 

Adam Lawrence 

Editorial contributors 

Mat Allen, Content & Code, Adrian Stafford-Jones, Albany Software, 

Steve Hall, Kingston Technology, Martijn Hohmann, Bjorn Holmthorsson, 

Five Degrees Solutions, Colin Kerr, Microsoft, Stephen Lindsay, SWIFT, 

Kenan Maciel, Lab49, Wietze Post, Figlo, Srinivasan Rangaraj, Mahindra 

Satyam, David Taylor, Trintech, Simon Trewin, IMGroup 

Green IT advisor 

Dr Bernd Kosch, Fujitsu Technology Solutions 

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Subscriptions 

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Reprints 

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I hope you enjoy the issue 

Anders Abrahamsson 

Managing Director, EMEA Financial Services 

Microsoft 

1

Contents 

autumn 2010 

News 06 

Microsoft, HP and SunGard help insurers combat risk, Fujitsu ups its game in the 

cloud, plus more from the industry on the latest in technological innovation 

Viewpoints 

Evaluating balance sheet integrity 14 

David Taylor addresses the issue of risk when it comes to managing data 

Empowering advisors to enlighten customers 16 

Wietze Post looks at how financial institutions can better connect with customers 

Consolidating the financial world 18 

Consolidated reports ensure smarter decision making. Mat Allen argues the case 

06 

The FX technology arms race 20 

Up your game if you want to compete in the FX market, says Kenan Maciel 

22 

Features 

Sibos 2010: Standing out 22 

How the IMGroup and Microsoft partnership extends beyond the Sibos stand 

Sibos 2010: Faster payments 26 

In this Sibos special, Lindsay James takes a look at the changes in the payments 

landscape and the effect it is having on banks’ infrastructures 

Know risk 36 

Find out about the technology solutions that mean financial institutions don’t have 

to roll the dice on risk 

Focus 

Payments 44 

The importance of consolidated IT systems and processes in a fast evolving industry 

36 

48 

Retail banking 46 

A new vision for meeting the needs of today’s customers 

In practice 48 

Successful implementations at SEB Wealth Management and De Lage Landen 

Signing out 

Modelling the future 52 

Colin Kerr and Stephen Lindsay discuss the importance of semantic models 

26 

Published by Tudor Rose 

Tudor House 

6 Friar Lane, Leicester 

LE1 5RA, England 

Tel: +44 116 222 9900 

Fax: +44 116 222 9901 

info@tudor-rose.co.uk 

www.tudor-rose.co.uk 

Managing Director: Jon Ingleton 

Follow us: twitter.com/onwindows 

Become a fan on Facebook 

Connect on LinkedIn 

ISSN 1473-2173 

Finance on Windows is Microsoft's quarterly 

enterprise customer magazine for the financial 

services industry. For further information and to 

subscribe, please visit: 

www.onwindows.com/financeonwindows 

Printed in Great Britain by The Manson Group. 

© 2010 Tudor Rose Holdings Ltd. All rights 

reserved. No part of this publication may be 

stored or transmitted or reproduced in any 

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Active Directory, BizTalk, Microsoft, Outlook, 

SharePoint, Visual Studio and Windows are either 

registered trademarks or trademarks of Microsoft 

in the US and/or other countries. The names of 

actual companies and products mentioned herein 

may be the trademarks of their respective owners. 

Views expressed in this magazine are not 

necessarily those of Microsoft or the publishers. 

Acceptance of advertisements does not imply 

official endorsement of the products or services 

concerned. While every care has been taken to 

ensure accuracy of content, no responsibility 

can be taken for any errors and/or omissions. 

Readers should take appropriate professional 

advice before acting on any issue raised herein. 

The publisher reserves the right to accept 

or reject advertising material and editorial 

contributions. The publisher assumes no 

liability for the return or safety of unsolicited 

art, photography or manuscripts. 

3

partners 

autumn 2010 

Finance on Windows is produced in partnership with Microsoft (NASDAQ ‘MSFT’), the 

world leader in software, services and solutions that help people and businesses realise 

their full potential. The company offers a wide range of products and services designed 

to empower people through great software – anytime, any place and on any device. 

Publishing Partners 

Figlo offers unique, easy-to-use, customer-centric and transparent financial 

planning software, based on the Hawanedo approach. Figlo’s solutions are built 

with Microsoft Silverlight and suitable for banks, insurers and financial advisors 

globally. Hawanedo is available on the latest Microsoft Surface and Touch 

technology, guaranteeing an amazing user experience for both consumer and 

the financial industry. 

Information Management Group (IMGroup) specialises in real-time risk 

management solutions and institutional client management systems for the 

capital markets sector, as well as customer management applications for the 

retail banking sector and Solvency II services for insurance. Its technology 

expertise spans business intelligence, performance management, enterprise 

portals, CRM, private cloud services and application support. 

Fujitsu Technology Solutions – a Microsoft Gold Certified Partner – employs more 

than 10,000 people and is part of the global Fujitsu Group. With its Dynamic 

Infrastructures approach, the company offers a full portfolio of IT products, 

solutions and services, ranging from clients to data centre solutions, managed 

infrastructure and infrastructure-as-a-service. 

SunGard is one of the world’s leading software and IT services companies. SunGard 

serves more than 25,000 customers in more than 70 countries. SunGard provides 

software and processing solutions for financial services, higher education and the 

public sector. SunGard also provides disaster recovery services, managed IT services, 

information availability consulting services and business continuity management software. 

Sponsors 

C O M M I T T E D T O M E M O R Y 

raising revenue reducing risk 

Industry Partners 

The ACORD Implementation Forum 

is an interactive event uniting ACORD 

implementers from every line of business 

and every corner of the industry. Novice 

or experienced, business or technical, 

the ACORD Implementation Forum 

gives you the skills and networking 

opportunities you need. 

Established in 2008 to establish and 

promote a common architectural 

framework for banking interoperability 

issues, the Banking Industry 

Architecture Network (BIAN) is an 

independent, member owned, notfor-profit 

association. BIAN's goal is to 

define SOA and semantic definitions 

for IT services in the banking industry. 

The European Financial Marketing 

Association was formed in 1971 

by bankers and insurers to share 

experiences, promote best practice 

and build collaborative partnerships. 

SWIFT is a member-owned 

cooperative that provides the 

communications platform, products 

and services to connect more than 

9,000 banking organisations, securities 

institutions and corporate customers 

in 209 countries. 

5

marketwatch 

the latest news in BANKING, CAPITAL MARKETS AND INSURANCE 

Big three tackle Solvency II 

Nearly 10,000 partners gathered in Washington for Microsoft's Worldwide Partner Conference where the ERM framework was announced 

SunGard has created a new enterprise risk 

management (ERM) framework, in collaboration 

with Microsoft and HP, which will help support 

insurance companies’ Solvency II compliance 

initiatives. The framework comprises SunGard’s 

iWorks ERM solution, HP’s consulting services 

and infrastructure portfolio, and Microsoft’s 

HPC and SQL Server technologies. The 

announcement was made at the Microsoft 

Worldwide Partner Conference 2010. 

“Solvency II continues to be an evolving 

mandate of critical importance for carriers 

globally,” said Craig Weber, senior vice 

president of Celent’s insurance practice. “The 

combined assets of these companies give carriers 

a compelling, holistic option to consider as they 

strengthen the technology and services they 

have to support these compliance initiatives.” 

The ERM framework also includes SunGard’s 

actuarial, business process management, 

analytics and business intelligence capabilities. 

“It is our view that Solvency II compliance 

represents the first step in building a 

comprehensive ERM infrastructure,” said Greg 

Webber, president of the company’s insurance 

business. “This collaboration offers a unique 

combination of risk management solutions, 

services and technology infrastructure that can 

form the foundation for a robust ERM strategy 

for insurers worldwide.” 

The iWorks Prophet solution will be deployed 

on HP infrastructure technology, including 

desktops, servers and storage. “As the 2012 

deadline for Solvency II compliance approaches, 

insurance institutions in the European Union 

will require enhanced capacity to store, identify, 

retrieve and manage data to meet its requirements,” 

said Wayne Lewin, executive director of the 

Insurance Segment at the company. “Our in-depth 

experience in business transformation and data 

management will help SunGard provide fast, 

effective and consistent support to insurers.” 

www.onwindows.com

“A fully configured complaints handling 

process ensures the right correspondence and 

communication is sent to the right people” 

Mark Bates, RDT 

The quick complaints remedy 

Insurance administration solutions specialist RDT has developed a fully integrated complaints module 

for its Landscape.NET solution to support its customers’ regulatory obligations. 

Integration of the module with the Landscape Graphical Workflow 

tool means compliance managers can design and effect processes 

within minutes. This not only removes the dependency on scarce 

IT staff, along with the associated costs and lead times, but 

also empowers the compliance team to meet its internal and 

external key performance indicators, eliminating business risks. 

“The ability to fully configure the complaints handling 

process ensures the right correspondence and communication 

is sent to the right people at the right time,” said RDT chief 

executive Mark Bates. “Customers receive a timely service, staff 

have visibility of tasks ,and management can spot issues and trends 

which can be quickly remedied.” 

70% 

of brokers in the UK rate 

speed of policy issuance and 

underwriting decisions as key 

criteria when choosing an insurer 

Source: The Bank for 

International Settlements 

Insurance market research findings 

Microsoft’s HPC Server and SQL Server 

provide the platform and database for the 

solution that will help insurers accelerate 

risk modelling calculations by balancing the 

workload over a large grid of processors. 

“The combination of iWorks Prophet 

Enterprise and Windows HPC Server 2008 

will help insurers build the actuarial models 

that are critical to manage enterprise risks in 

more volatile markets, while at the same time 

satisfying increasingly stringent regulatory 

requirements,” said Karen Cone, Microsoft’s 

newly appointed general manager of its 

Worldwide Financial Services Sector. 

Research by Sequel has highlighted expansion 

and regulation as top concerns for brokers and 

underwriters as they plan for the year ahead. 

Around 50 London-based professionals were 

asked to identify their concerns and then rank 

them in order of importance. The combined 

results are shown in the chart opposite. 

“The top three issues identified were given 

significantly more emphasis by professionals than 

the last three. It is important and encouraging to 

note that concerns about dealing with growth and 

enhancing IT systems come high on their list of 

priorities,” said Sequel’s director Michael Graham. 

Source: Sequel’s market research 2009/10 

11% 

Dates for your diary 

The Economy 

5-6 October 2010 

12% 

SOA and International Cloud Symposium. Berlin, Germany 

21-22 October 2010 

38th Efma Congress: multi-channel and micro-channelling. Rome, Italy 

25-29 October 2010 

Sibos. Amsterdam, Netherlands 

25% Expansion 

11% 

The Economy 

8% London 

Market Initiatives 

23% Regulation 

21% 

Enhancing 

Systems 

12% 

21% 

Business Efficiency 

Enhancing 

Systems 

23% 

Regulation 

25% 

Expansion 

7

marketwatch 


Aia Software has integrated its ITP 

Document Platform with Microsoft 

Office 2010 to facilitate anytime and 

anywhere document creation. This new 

development lays the foundation for the 

future deployment of ITP in the cloud 

through Microsoft BPOS and Azure. 

Migrating from the 

mainframe made easy 

Figlo Russia has finalised its first 

strategic partnership with the Institute 

of Financial Planning in Moscow 

to integrate Russian tax law into its 

financial planning and advice software, 

Hawanedo. This integration has made 

the software ready for the Russian 

market, which will be used initially by 

independent financial and sales advisors. 

Kwik Fit Insurance, 

the UK insurance 

intermediary, has 

signed a contract 

with conversion 

management expert Maxymiser to 

improve online customer engagement 

and provide scientific proof-of-winning 

Web content. The technology company 

will provide a broad range of services, 

including multivariate testing, visitor 

segmentation and personalisation. 

Fiserv, a global provider of financial 

services technology solutions, has 

unveiled Frontier: Case Manager, its nextgeneration 

case management solution 

designed to automatically identify, assess 

and prioritise potential reconciliation 

exceptions, trade breaks and other 

process failures in a real-time, straightthrough 

manner. 

Asset management company Henderson 

Global Investors has chosen the 

Prodiance Enterprise Risk Manager 

system to mitigate operational risk 

and automate internal controls over 

mission-critical spreadsheets and Access 

databases. It will enable Henderson to 

implement a sustainable solution for 

spreadsheet and end-user computing 

discovery, risk assessment, monitoring, 

change control, analysis and reporting. 

Customers can now run their existing IBM applications as .NET components 

Micro Focus is helping large organisations “This solution will provide our customers 

mitigate risk and reduce costs with a new with the greatest platform for innovation 

managed code version of its mainframe of their enterprise data and applications,” 

migration and application modernisation said Peter Duffell, vice president of strategic 

solution for the Microsoft application platform, partners at Micro Focus. “One of the major 

including Azure. 

components of this is the ability to bridge the 

This new release enables migration from skills gap, and this is where the linkage with 

COBOL, CICS and DB2 applications to the Visual Studio 2010 is really advantageous, as it 

Microsoft application platform without making is a modern, graphical user interface.” 

changes to the underlying application code or Micro Focus Server Enterprise Edition 

data. This retains all the core business logic locked leverages the Microsoft .NET Framework, 

away in these enterprise assets and significantly Windows Server 2008 R2 and SQL Server 

reduces testing costs related to re-hosting. 2008 R2. 

Based on Micro Focus Visual COBOL and “Organisations with IBM System z servers 

Visual Studio 2010, the new solution provides are migrating to the Windows Application 

a rich development and testing environment for Platform to more competitively address their 

the migration, modernisation and development business requirements and significantly 

of new mainframe applications on the reduce their costs,” said Bob Ellsworth, 

Windows Application Platform. For the first director of Enterprise Platform Modernisation 

time, Visual Studio developers and Windows at Microsoft. “The ability to run COBOL 

system engineers can now modernise and and CICS applications as .NET components 

support mainframe applications, addressing provides a dynamic, cost-effective alternative 

the growing skills gap in many businesses. for IBM customers.” 

www.onwindows.com

Microsoft and Fujitsu unite in the cloud 

Fujitsu and Microsoft have formed a worldwide 

cloud computing alliance to deploy the 

Windows Azure platform appliance in Fujitsu 

data centres. 

Using Microsoft's new turnkey cloud 

platform, the hardware company will 

deliver new cloud services and solutions, 

including system integration, cloud migration 

and managed services, to customers and 

independent software vendors. 

The two companies will also develop a 

Fujitsu-branded Windows Azure platform 

appliance that customers can purchase and 

deploy in their own data centres, using Fujitsu's 

hardware technology. 

“Fujitsu has a vision of a prosperous, humancentric, 

intelligent, networked society, and this 

strategic global partnership is a major step 

forward in being able to realise this,” said 

Kazuo Ishida, corporate senior executive vice 

president, responsible for the ICT Services 

Through the alliance, customers will have access to new cloud services and solutions 

Business at the company. 

commented Bob Muglia, president of the Server 

“By extending the power of our cloud platform and Tools Business at Microsoft. 

to customer and service provider data centres like The new cloud services and solutions will 

Fujitsu, we are paving the way for more customers be available in Fujitsu data centres in Japan by 

to fully realise the business benefits of the cloud,” the end of 2010. 

Regional spotlight: banking in Asia Pacific 

XSP has launched an application service provider offering of its 

v5 corporate actions solution on the Decillion Group platform 

in the AsiaPac region. The solution also sources global corporate 

actions data from Interactive Data, a provider of financial market data, 

analytics and related solutions. 

The company has engineered its platform using Microsoft technologies, 

specifically .NET components and Web Services. “The Asian and Australian 

markets present significant opportunities where local 

financial institutions can greatly benefit from 

automating their end-to-end corporate 

actions processing,” said Brendan Farrell, 

CEO at XSP. “By leveraging our global 

network of partners, we can help 

our clients in the Asia-Pacific region 

achieve greater levels of straightthrough 

processing for this high-risk 

and specialised area of operations.” 

The amount 

that claims on banks in 

Asia rose by in the first 

three months of 2010. 

$68bn 

Source: The Bank for 

International Settlements 

Tonbeller, a leading provider of financial crime prevention 

solutions, has successfully implemented its anti-money 

laundering (AML) solution, Siron AML, at The Bank of Tokyo 

Mitsubishi (BTMU) offices outside of Japan. The product forms 

the backbone of the bank’s strategy to fight AML, protect itself from 

reputational damage, and comply with increasing national and 

international regulations. 

“With Siron AML in place, we expect the transaction monitoring 

process to be more customisable, efficient and accurate,” said Shoji 

Horie, senior manager of global compliance division at BTMU. “The 

easy-to-use yet comprehensive risk-based approach complements 

earlier processes to provide greater AML and counter-terrorism 

financing compliance. One of the main benefits is a user-friendly 

interface for quick and easy generation or maintenance of research 

scenarios, which can be easily handled by the AML/compliance 

officers themselves. This helps us reduce false-positives without 

spending more for external consultancy in order to adjust the system.” 

9

marketwatch 


Industry news 

Global technology spending in 

2010 will not be as high as originally 

forecast due to the European debt crisis, 

according to Gartner. In the first quarter, 

it was estimated that growth in IT 

spending would be 5.3 per cent; this has 

now fallen to 3.9 per cent. 

High net worth individuals (HNWIs) 

regained ground 

despite weakness 

in the world 

economy, 

according to a report by Merrill 

Lynch Global Wealth Management 

and Capgemini. Their global population 

has now returned to over 10 million. 

HNWI financial wealth has also 

increased, posting a gain of 18.9 per cent 

to US$39 trillion. Ultra-HNWIs increased 

their wealth by 21.5 per cent by the end 

of 2009. 

Investment in technology by UK 

financial firms is expected to stay 

'broadly flat' over the course of 

the next 12 months, according to 

PricewaterhouseCoopers and the 

Confederation for British Industry. The 

report also showed that many firms in the 

financial services sector are concerned by 

the potential costs of complying with new 

regulation over the next 12 months. 

G20 leaders have 

come to an 

agreement on 

global banking 

reform. Banks will 

have to hold more tier one capital as 

equity to ensure shareholders absorb 

losses from financial difficulties, rather 

than passing costs on to taxpayers. 

Payroll provider gains control 

Employer Services (ESL) in the UK is to 

use Albany Software’s bureau payments 

platform, ALBACSbureau cs to strengthen 

back-office processes and upgrade its data 

recovery strategy. 

The solution, which runs in the Microsoft 

Windows environment, enables the payroll 

provider to maintain greater control 

over payment operations. It provides 

comprehensive reporting functionality 

and streamlines back-office processes with 

the introduction of automated data pooling 

and validation. 

“Achieving high levels of automation in 

order to streamline the workflow, without 

Future-proof accounting 

system for Spendvision 

Global provider of total transaction 

management solutions, Spendvision 

has selected ST Consulting to integrate 

Microsoft Dynamics GP with its expenses 

management system. The new accounting 

system will create a future-proof finance 

function and deliver improved reporting, 

faster payment processing and less manual 

administration across the business. 

“When looking for a new system we 

ideally needed one that had the ability to 

Irving Oil Marketing based in Canada has 

selected Trintech ReconNET software for 

financial process compliance. The solution 

is a component of Trintech’s Unity platform, 

a suite of modular software that enables 

companies to meet their financial governance, 

risk management and compliance goals. 

compromising the validation process, is 

critical for our bureau. Previously, our 

payments process was largely manual and 

resource-hungry, so adding automation 

through this solution is a key benefit for us 

and is already contributing to major time 

savings,” said Virginia Freeman, service 

operations director, ESL. “The time savings 

achieved are substantial, and the system has 

prompted us to review and improve all of 

our processes.” 

The company has also invested in the 

Disaster Recovery module from Albany 

Software, ensuring that data is secure and 

readily retrievable. 

consolidate the operations of the business 

across multiple countries and legal entities. 

Dynamics GP is an easy to use, flexible and 

scalable accounting system that can support 

our ongoing financial requirements as we 

continue to expand our business activities,” 

said Chris Howell, CFO at Spendvision. 

“We are now able to access and run 

reports in an instant and we can lighten the 

administrative load on our finance staff as 

more tasks can be automated.” 

GRC goals met by Trintech 

Through a suite of software modules, the 

platform enables the company to increase the 

accuracy and transparency of financial reporting, 

reduce operational costs, shorten accounting 

cycle times, reduce the risk of material 

weaknesses, and fully comply with financial 

regulations and compliance requirements. 

www.onwindows.com

marketwatch 


Sibos 2010: 

defining the future 

Sibos 2010 is taking place in Amsterdam from 25-29 October 

The biggest event of the year for the payments 

industry is returning to Europe in October. Sibos 

2010, which is being held in Amsterdam, is 

organised by SWIFT and provides opportunities 

for learning, collaborating, developing new 

business and defining strategies for the future. 

The event will focus on the themes of recovery, 

rebuilding trust and regulatory reform. 

The upheaval in the markets since the 

collapse of Lehman’s and the change of 

government in the US and UK has led to a 

significant overhaul in regulation and created 

a new financial landscape. In light of this, 

businesses will have to change the way they 

operate in more ways than just adhering to new 

market regulations. Companies are revaluating 

their business models and rethinking how best 

to attract and retain clients who remain cautious 

following recent events. 

Financial services solution provider peterevans 

believes companies demonstrating genuine, 

niche expertise and delivering best practice to 

clients will flourish in this new environment. 

Sibos 2010 marks peterevans’ sixth year as an 

exhibitor where it will be showcasing its xanite 

modules, the result of the last four years of 

ongoing investment and product innovation. The 

xanite family enables clients to take control over 

their transactions and resulting data throughout 

the trading cycle, empowering them and end 

users with trustworthy information. 

Microsoft will also be there, exhibiting 

alongside a number of key partners. 

Together, they will focus on SWIFT and 

payments integration, business intelligence, 

cloud computing and business productivity. 

Now is the time for financial institutions 

to break their ties to legacy systems and seek 

new opportunities for growth and innovation. 

Sibos in Amsterdam promises to be a great 

forum for debate and discussion around the 

changes and opportunities in the market. 

Sibos in Amsterdam 

promises to be a great 

forum for debate and 

discussion around the 

changes and opportunities 

in the market 

More information about Sibos 2010 can be 

found in our special event section starting on 

page 22. Read about how IMGroup's partnership 

with Microsoft extends beyond the Sibos stand, 

and where the payments landscape is heading. 

www.onwindows.com

viewpoint 

data management 

David Taylor 

Vice President, Strategy and Global Business Development, 

GRC Division, Trintech 

Evaluating balance 

sheet integrity 

David Taylor addresses the issue of risk when it comes to managing data 

Economic globalisation has been a boon to 

financial institutions worldwide. The quaint 

brick and mortar barriers to trade are, by and 

large, a thing of the past; replaced by a sprawling 

network of financial organisations and products 

that many consider to be the backbone for 

international trade. This backbone has provided 

support for businesses, but with the evergrowing 

complexities in financial instruments 

(not to mention ever-increasing regulatory and 

compliance mandates), the office of finance is 

experiencing an unprecedented level of stress. 

New requirements force financial professionals 

to account for the financial integrity of the entire 

organisation – a burdensome effort that exposes 

financial professionals to levels of risk that 

would have been unheard of even a decade ago. 

In such an environment, a risk-based balance 

sheet integrity view offers the most effective 

vehicle to compliance and transparency. 

The biggest problem for financial institutions 

is a four-letter word: data. The sheer volume of 

information underlying the balance sheet totals 

at the end of any given period is astounding, and 

is multiplying at an exponential rate. The data is 

housed in balance sheet accounts, which can tally 

into the hundreds of thousands in mid-size financial 

institutions. In some of the world’s largest financial 

organisations, these accounts can number in the 

millions. When a balance sheet is rendered from the 

enterprise resource planning (ERP) system, the data 

can be accessed in summary form and structured 

according to line items. This same view can also be 

cascaded down into divisions and business units. 

With so much information, questions start 

arising. How were these numbers prepared? Has 

everything been truly accounted for, or deferred 

to a future period? Do we have confidence in the 

process by which the accounts were prepared? 

Was everything performed according to the agreed 

procedures and documentation? Was anything 

missed or not accounted for? If so – was this 

documented? How long have items remained 

unaccounted for and outstanding? Has risk 

been appropriately reflected on particular types 

of accounts, giving you an accurate view per the 

established accounting principles? 

Most IT and finance departments have addressed 

these questions at the local level in a manual 

manner. Such an approach simply can’t scale in 

the post-Enron and Sarbanes-Oxley regulatory 

landscape. Until the office of finance understands 

the relationships between these questions and 

can confidently address each underlying financial 

process, it can be difficult to certify that the balance 

sheet has been compiled with integrity. 

Today, faster networks and mature ERP solutions 

allow the optimisation of a balance sheet review 

process. A risk-based approach to balance sheet 

integrity begins by connecting the dots between the 

above questions, linking one loosely jointed process 

to the next with automation that can capture the 

unknowns at the critical junctures where data 

handoffs occur within the business. 

The core process behind a risk-based approach 

to balance sheet integrity is reconciliations, balance 

sheet review and balance sheet certification. Some 

propose a lightweight, top-down substantiation 

process, in which personnel formally respond with 

their certifications and supporting documentation. 

Others endorse a bottom-up, six-sigma approach, 

using analytics to ensure the right accounts and data 

are being reconciled at the most appropriate time, 

and that the results of reconciliation and certification 

are reported back in a timely manner. Key risk 

indicators should be indicated to senior accounting 

“The biggest problem for 

financial institutions is a 

four-letter word: data. The 

sheer volume of information 

underlying the balance sheet 

totals at the end of any 

given period is astounding, 

and is multiplying at an 

exponential rate” 

officers, such as unexplained net differences, the 

percentage of accounts reconciled and reviewed, 

and unreconciled items left for longer than 45 days 

and 90 days. Supporting documentation should 

be included to facilitate resolution and high-risk 

accounts flagged with specific analysis addressing 

the current profile of those accounts. 

The primary financial statement, having been 

evaluated at all points along the process chain, 

now accurately reflects the stability of the financial 

institution. The end result is an early warning 

system, giving management the decision-support 

information it needs to anticipate (and respond to) 

previously unforeseen economic headwinds. Now, 

the business’s biggest problem – data – has become 

a powerful tool to anticipate and eliminate another 

four-letter word: risk. 

David Taylor is vice president of strategy and global 

business development in the GRC Division at Trintech 

www.onwindows.com

viewpoint 

CUSTOMER RELATIONSHIP MANAGEMENT 

Wietze Post 

CEO, Figlo, South Africa 

Empowering advisors 

to enlighten customers 

Wietze Post sheds some light on how financial institutions can connect with 

their customers better and give them the advice they need 

Most people would like to know why the month 

seems to last longer than their cash. Where is 

their money going? Are they going to be able 

to save enough for a comfortable retirement? 

Getting answers to these questions hasn’t always 

been simple, but now this is changing. 

South Africa is one such country where attitudes 

towards financial services institutions and managing 

personal finances have been evolving over the last 

few years. This is down to a number of reasons. First 

of all, it must be noted that until recently, Internet 

communication there was fed through limited cable 

capacity. Pent-up demand and such recent events 

as the hosting of the World Cup, however, placed 

extra requirements on the country to improve its 

communications infrastructure, triggering a massive 

expansion in cable capacity and speed. In return, 

this has opened up possibilities within the financial 

world to better serve and connect with customers. 

Today, for example, leading financial products can 

be serviced from the cloud, accessed by advisors 

and then be used to give consumers the information 

they need and help them get what they want. 

It goes without saying that the economic downturn 

had a dramatic impact on society in South Africa, as 

in the rest of the world. As markets collapsed, many 

customers became disillusioned by the advice they 

received regarding how to manage their personal 

finances. New regulatory frameworks, which make 

it obligatory for advisors to deliver transparent and 

understandable advice, are now going some way 

to rectify this. However, it is up to the banks to 

further deliver the information customers want in 

order to repair their damaged reputations. This is 

particularly important in regions like South Africa 

where a growing number of customers are emerging 

into the middle classes and bring with them a fresh 

perspective on how to manage their financial affairs. 

For financial institutions and advisors to serve 

their customers effectively in this new environment, 

they need to remove the barriers that in the past 

have prevented them from being more accessible 

to the customer. A simple answer to this is intuitive 

software, which makes it relatively easy for an 

advisor, as well as a financial institution, to bridge 

this gap and create a fun and learning environment 

for the customer. The customer, in turn, makes the 

advisor’s job easier by being able to structure the 

history of their expenses. The result: both advisor 

and customer gain greater insight into the spending 

patterns in question. 

Do you recognise the following situation? A 

customer’s credit card account goes into excess, 

which requires a call from the bank. Would it 

make a difference to the conversation if the bank 

consultant could see that the excess spend was 

due to a medical emergency of the card-holder’s 

daughter, and not regular groceries? 

Customers need to be empowered to manage 

their finances and they must be taken seriously. It 

is, therefore, key to offer the right tools, information, 

insight, communication and advice. In turn, people 

are more willing to buy financial products if they 

understand why they need them and exactly how 

they work. This applies to sophisticated, high-networth 

clients as much as to anyone else. 

Figlo has a history of providing understandable 

financial advice software, all of which is encapsulated 

in its philosophy ‘Hawanedo’ (have, want, need, do). 

Focusing on simple, intuitive and interactive software 

with powerful calculations rendered in the cloud, we 

believe that if the customer can understand the advice 

they are given and enjoy the process, then the bank 

stands to profit substantially. 

Wietze Post is CEO of Figlo, South Africa 

“Customers need to be 

empowered to manage their 

finances and they must be 

taken seriously. It is, therefore, 

key to offer the right 

tools, information, insight, 

communication and advice” 

www.onwindows.com

viewpoint 

business intelligence 

Mat Allen 

Business Director, Content & Code 

Consolidating 

the financial world 

Mat Allen argues the case for consolidated reports to ensure smarter 

decision making 

Most of us know that the financial world 

is based on numbers. These numbers 

flow between global systems, from person 

to person, office to office, institution to 

institution and so on. Modern financial 

institutions collect data from a vast array 

of sources. Core banking platforms, Web 

site visitor statistics, trading platforms, 

ATM terminals and many more add to the 

terabytes of data collected every minute of 

every day. 

Most individual systems have their own set 

of reporting and analytics, meaning that users 

can understand the when, where and who for 

an isolated set of data. This data can then be 

used to make decisions in relation to specific 

aspects of the business. 

However, the real power lies in having 

the ability to combine the information from 

multiple systems into custom dashboards and 

key performance indicators (KPIs) that provide 

an insight into the key business metrics. This 

information can then be used to make smarter, 

faster and more effective decisions. 

Users are often smarter than we give them 

credit for. By providing them with the right set of 

tools and information, we can focus their attention 

on the key aspects of the role that they perform. 

By focusing on what data should be presented to 

users and how it should be presented, we are able 

to dramatically improve the effect the users have 

on the business as a whole. 

The potential for increasing the day-to-day 

performance of financial organisations through 

the improved use of business intelligence is 

vast. Decisions are made every day that affect 

trading strategies, mortgage rates, branch 

openings and new investments. Without 

accurate data being presented in an easy to 

understand, logical manner, the risk of making 

poor choices is high. 

Users now expect more from Web-based 

technology. This expectation is driven by the 

increased functionality provided by the sites we 

use on a daily basis outside of work. Financial 

tracking tools, customisable news alerts and 

product ratings and reviews are all common 

place for Web savvy users. We then use this 

data to make decisions about where to invest 

our money, where to go on holiday and what 

products to buy. It is not unreasonable to now 

expect this level of decision-making ability in 

our working lives. 

Another common recurring trend is data 

consolidation. Expecting users to access 

multiple systems on a regular basis to be able 

to perform their daily tasks is no longer a 

realistic scenario. Wouldn’t it be much easier 

if all reports, dashboards, KPIs and more 

were accessed, viewed and managed from one 

central location, regardless of where that data 

originates from? Users should have the ability 

to consume the information in an efficient 

manner, as well as making effective decisions 

based on the information available. 

The world of technology is constantly 

changing, but making good business decisions 

will always remain a key requirement of 

success. As they say ‘information is power’ and 

if you give your users that power, you might be 

surprised at the results. 

Mat Allen is responsible for new business and 

account management at Content & Code 

“The world of technology 

is constantly changing, 

but making good business 

decisions will always remain a 

key requirement of success” 

www.onwindows.com

viewpoint 

ELECTRONIC TRADING 

Kenan Maciel 

Director, Lab49 Strategy Group 

The FX technology 

arms race 

Any bank that wants to be a player in the foreign exchange market needs to 

up their game in the electronic trading space, says Kenan Maciel 

Electronic trading has dominated foreign 

exchange (FX) markets for many years, 

growing at an annual compound rate of 17 

per cent since 2001. Even despite a recent 

dip in performance as a result of the financial 

crisis, the Celent Global Market Trends Report 

of 2009 estimates that electronic trading will 

account for an overall market share of 75 per 

cent by 2012, putting it firmly in the top spot 

for conducting business. 

Any financial institution, therefore, that wants 

to effectively compete in the FX market needs 

to be involved in the electronic trading space 

and should be looking to join the technology 

arms race if they haven’t already done so. Larger 

players must look to refine their platforms, 

smaller players need to develop strategies to gain 

market share, and all participants must comply 

with recent derivatives legislation and reduce 

processing costs to offset declining margins. 

Key to achieving this is having a technology 

infrastructure in place that gets the basics right 

(price, liquidity and latency), yet also has the 

capacity to take your business to the next level 

by being flexible, easy to use and can quickly 

adapt to change. 

E-channel technology needs to be as nonintrusive, 

easy to deploy and customisable 

as possible. Employees like to feel that the 

technology they use can be adapted and altered 

to suit their individual needs, meanwhile banks 

need a system that helps them react quickly 

to changes in the market. The spread of high 

frequency and algorithmic trading across asset 

classes and into areas such as FX, in particular, is 

putting pressure on banks to enhance the speed 

of risk calculations. They need a system that can 

support them to realise this. 

New derivative legislation, which has been 

developed in the US and is in the pipeline for 

Europe, also means that the consequences 

are severe for those banks that don’t have an 

adaptable technology infrastructure in place 

to ensure compliance. For instance, certain 

FX products (swaps, forwards and options) 

need to change to cater for enhanced reporting 

requirements, central clearing of standardised 

products and trading on a recognised facility 

with stricter collateral rules for non-cleared 

transactions. The key to achieving this is 

connectivity. 

With a connected environment, banks can 

comply with these developments, while also 

being able to trade more and turn over a greater 

profit. Larger banks may be able to achieve this 

through their existing platforms, but others 

will need to invest in the latest technology 

that can then be easily customised for future 

developments in the market. 

Finally, more sophisticated systems that can 

analyse client data and market/economic events 

to provide tailored trading ideas will empower 

the bank’s sales force. With more data to hand, 

employees can offer clients a better service while 

still having more time to push trading ideas and 

become involved in more complex transactions. 

Whether a bank is a leading FX dealer that 

wants to maintain and grow market share or 

needs to increase its standing in the market, 

doing nothing is not an option. Having the right 

technology in place is vital for success. 

Kenan Maciel is director of the Lab49 Strategy 

Group 

“Whether a bank is a leading 

FX dealer that wants to 

maintain and grow market 

share or needs to increase its 

standing in the market, doing 

nothing is not an option. 

Having the right technology 

in place is vital for success” 

www.onwindows.com

Sibos 2010 

PARTNER SPOTLIGHT 

“Pri error quando graecis ne, aperiam sapiente 

ex has. In ridens vivendo interpretaris per, an 

ubique ceteroscri aperiam te quando” 

www.onwindows.com

HONG KONG 

to AMSTERDAM 

Keen to leverage Sibos as a platform to present 

new ideas, IMGroup is working with Microsoft 

to help financial institutions meet regulations, 

rebuild trust and effectively recover from the 

economic crisis. Lindsay James finds out more 

Every year Sibos brings together the financial industry for one 

week to create opportunities for individuals, organisations 

and the community as a whole. It’s undoubtedly a key event 

for Microsoft, which will bring together strategic partners to 

present new ideas to the industry. 

Sharing Microsoft’s stand at this year’s event is IMGroup, a 

Microsoft Gold Certified Partner that hopes to impress visitors 

with a series of innovations, including its vision for a Traders’ 

Desktop of the Future. 

“The Traders’ Desktop of the Future is an exciting concept,” 

explains Garry Miller, IMGroup’s business development director. 

“Using innovative Microsoft Silverlight technologies teamed with 

our institutional client platform, it illustrates the potential for 

traders to connect with customers in new and exciting ways.” 

Using a touch screen, traders can have instant access to front, 

middle and back-office activity, integrating a 360-degree view 

of the customer with highly sophisticated predictive analytics. 

With this level of information at their fingertips, traders can 

make decisions at the point of customer contact, which enable 

them to more effectively cross-sell a range of appropriate 

products. In addition to this, firms are able to provide 

improved client service by seamlessly connecting the entire 

communication infrastructure including instant messaging, 

23sTANDING OUT

SIBOS 2010 

PARTNER SPOTLIGHT 

e-mail and the trader’s turret system. 

This concept could provide a way for traders 

to stand out from their peers, something which 

according to a recent report from Aberdeen, is 

critical for a successful future. The report, titled 

Capitalizing on a Volatile Market: Leveraging Effective 

Trading and Investment Solutions, states that over 

the past two years assets under management have 

either increased dramatically in winning firms, or 

decreased substantially in others to a point of 

dissolution. This polarising phenomenon, along 

with current capital market pressures, is driving 

firms to seek technologies and develop strategies 

that enable competitive differentiation. 

“Technology like the Traders’ Desktop of 

the Future can make a real difference,” adds 

Suranjan Som, IMGroup’s joint practice head 

and industry strategist. “It can bring together 

customer relationship management, data 

mining, consumer grade dashboards, real-time 

analytics and much more, enabling greater 

efficiencies and ultimately a more profitable 

organisation. With this in mind, we expect it to 

spark a lot of interest at Sibos.” 

But it’s not just its vision for the future that 

IMGroup wants to promote at Sibos. A major 

theme at this year’s event is regulation, and this 

is another key topic that the company holds dear. 

“Regulations are making a huge impact 

on the industry at the moment, and so many 

organisations visiting the event are going to 

be looking to find innovative ways to manage 

risk,” explains Simon Trewin, an associate of the 

company. “Before 2008, the banks were largely 

focused on revenue generation and speed of 

growth. Time to market was key and staying 

ahead of the game was crucial. The result of this 

drive was to create highly siloed organisations 

and infrastructures. Now though, there is a big 

focus on regulation and internal controls within 

banks. The banks are having to change their 

approach to a much more top-down focus on 

controls, profitability, liquidity and risk. More 

than ever before, firms are being called upon to 

manage their risks in a prudent manner through 

more integrated, granular and frequent risk 

monitoring. This also includes stronger stress 

testing and regulatory reporting.” 

Examples of this are better management 

of customer risk and margining, funding and 

The Traders' Desktop of the Future is expected to spark a lot of interest in Amsterdam 

collateral management and liquidity risk. “The wants to have data delivered in real time, it also 

challenge that the banks now face is that the wants to know more risk metrics to ascertain a 

change of focus is forcing them to bring together more accurate set of market parameters than 

these silos and work as one cohesive unit,” the market risk function. In addition to this, it 

Trewin continues. “In addition to this, they need wants more detailed and complex breakdowns 

to actively manage who they are trading with, of profit and loss, and is considering factors 

what collateral they are posting and how much that were never included before. This pushes 

of the balance sheet this will use. Traditionally, the amount of scenarios and data points to 

these questions were managed in the back staggering levels.” 

offices of the banks and were handled through To stay on top of the above issues, banks are 

management risks and costs. These are now now focusing on building large data analysis 

being forced directly onto the trading floors to systems, which bring together the different 

be considered at the time of execution.” data systems to create golden records and 

Trewin explains that this is bringing new references. “To achieve all of this they have had 

challenges to financial institutions, which need to change their sponsorship of IT programmes 

to find ways of effectively managing these new to be longer term and more strategic than they 

requirements. “Firstly, front office to back office have been in the past. They also need to push 

and senior management now want to share the the existing technology much further than they 

same records for risk management and reference have done previously.” 

data,” he explains. “This would be OK, but they Working with Microsoft, IMGroup is creating 

have very different needs in terms of timeliness solutions that help financial institutions to take 

and processing. For example, the front office the longer term view that Trewin says they 

www.onwindows.com

“Regulations are making 

a huge impact on the 

industry at the moment, 

so many organisations 

visiting the event are 

going to be looking to 

find innovative ways to 

manage risk” 

Simon Trewin 

IMGroup 

need. “We are currently engaged on several 

initiatives, the most prominent of them being 

in the area of financial services risk analytics,” 

explains Som. “We are collaborating very 

closely with the development teams at 

Microsoft to develop a risk management and 

analytics framework that significantly reduces 

the total cost of ownership for large businesses, 

but at the same time provides cutting-edge, 

real-time advanced analytics that allows realtime 

monitoring of financial risk, coupled with 

the capability of historical analysis of data over 

days, months or even years.” 

It is this approach that is spurring interest 

from much of the industry. “Financial 

institutions today are focused on three main 

areas: regulations; rebuilding trust; and 

recovery,” says Som. “As a result, are helping 

many of the largest investment banks across the 

globe to build risk management architectures 

on the Microsoft platform.” 

IMGroup’s Analytics proposition facilitates 

the monitoring and analysing of corporate 

data at every level in the organisation and at 

very high speed. Instead of waiting hours for 

crucial information, managers and traders 

can now have access to their relevant data in 

a matter of minutes, if not seconds. Decisions 

can therefore now be made not just faster but 

based on solid facts. 

“We owe this functionality to the power of the 

Microsoft business intelligence stack,” says Som. 

“It allows users to access real-time information 

while ensuring the integrity of data and flexibility 

of analysis. By using standard Microsoft 

technologies like SQL Server, Analysis Services 

and Windows Communication Foundation, 

the IMGroup solution is a very cost-effective 

alternative to multi-million dollar proprietary 

offerings. This once again demonstrates the 

Microsoft/IMGroup commitment to assisting 

the industry to rebuild trust by reducing the 

cost of decision making – but doing so more 

effectively and efficiently.” 

25

sibos 2010 

Payments feature 

fastEr 

payments 

Jasmine Yalds discusses the technologies that are enabling banks to offer faster, 

cheaper and more effective payments services in this highly competitive market 

www.onwindows.com

“The key is to add 

value to the customer 

at the point of service, 

and speeding up the 

availability of funds is an 

important part of that” 

Colin Kerr 

Microsoft 

In the current financial landscape, payments 

remain a major focus for banks. As an 

increasingly important contact point in the 

quality of a banking relationship, financial 

institutions are finding that processing 

transactions cheaply, reliably and as 

quickly as possible is no longer a product 

differentiator; it’s the baseline for being in 

business. 

Ned Harrison, a member of the Microsoft 

BizTalk virtual technology strategist team, and 

business development manager at Decillion 

Group, says that banks have got to perform 

a difficult balancing act in order to deliver 

the level of payments service that is expected 

of them. “After the advent of the global 

financial crisis, the industry has experienced 

a period of dramatic transformations,” he 

explains. “The finance market has witnessed 

a string of acquisitions and mergers, finance 

mogul collapses, industry-wide workforce 

downsizing and a decrease in funds liquidity 

in the market space, but in addition to this 

there are numerous pressures to face. Banks 

have to keep costs under control, while at the 

same time increase payments efficiencies in 

order to improve market competitiveness.” 

These pressures are amplified by 

consolidation of the industry. Payments 

initiatives like the Single Euro Payments Area 

(SEPA) are aimed at removing the roadblocks 

to larger harmonisation and the trend towards 

greater cross-border consolidation seems set 

to continue, even accelerate. 

“SEPA has spurred a phenomenal 

evolution for banks,” says Georgia 

Leybourne, sales and marketing director at 

Albany Software. “It has enabled them to 

really break down barriers in the intra-bank 

network so that they’re all singing from same 

hymn sheet. They’ve got common standards, 

common pricing regulations, and the 

Directive on Payment Services (PSD) which 

provides the legal foundation for the creation 

of an EU-wide single market for payments.” 

Despite the many benefits that the move 

towards SEPA brings, it’s not without its 

difficulties. In as little as ten years from now, 

the global tier one market will be radically 

different. Bigger banks, more products, 

global reach and more secure providers will 

dominate the industry. This means that as 

payment types overlap or converge, and 

financial institutions find themselves on a 

level playing field, product differentiation 

becomes harder to achieve and processing 

flexibility becomes vital. 

But achieving processing flexibility 

doesn’t come easy. “The physical processing 

of payments, which is still usually done 

by traditional payment systems that have 

evolved quite slowly over the past three 

decades, is highly regulated and, perhaps 

more significantly, tightly interconnected,” 

explains Colin Kerr, Microsoft’s worldwide 

industry manager for payments and core 

banking. “Although payments form a 

foundational component of the banking 

system, there are shifting sands in terms 

of processing rules, standards and fee 

structures, which is making it difficult 

for banks to define and implement the 

required business and technology models as 

requested by the PSD. Such fluidity creates 

a knock-on effect as it presents challenges for 

the industry’s banks and software application 

providers to deliver fully functioning SEPA 

products while the target is continually 

moving.” 

The global acceleration of payment 

processing, moving from batch-based 

systems to more real-time systems, presents 

an additional challenge. Although this will 

lead to drastic improvements in customer 

service, it also means that the demand for 

improved and timelier payment information 

becomes ever more important, facilitating the 

optimal use of funds by payments processing 

organisations and their clients. 

“From the payments product manager’s 

viewpoint, the convergence of payment 

systems and cannibalisation of revenue 

streams is inevitable as the trend to realtime 

systems continues,” says Kerr. “But it’s 

better to transfer revenues in-house than have 

another bank take it away altogether. The key 

is to add value to the customer at the point 

of service, and speeding up the availability of 

27

sibos 2010 


funds is an important part of that.” 

In addition to this, the UK government 

has driven banks to innovate via the Faster 

Payments initiative, which has been created 

to move from the archaic three-day clearing 

system to a payment confirmation in just 

20 seconds. “With a current transaction 

limit of £10,000, there is some overlap with 

the national high value system (CHAPS) 

for consumer payments, but that limit 

is low enough to allow CHAPS to retain 

the business of interbank and corporate 

urgent payments,” explains Kerr. “As we 

make this move from batch to real time, 

the requirement for real-time analytics and 

business intelligence becomes more acute. 

Operations managers need to know about 

the state of payment operations regardless 

of client, payment type, delivery channel or 

settlement method. This is particularly so 

when clients are becoming better educated 

about the payments process, and have 

higher expectations about the level of service 

demanded from their banks.” 

The fact that banks have a myriad of 

internal payment instruments and systems 

spread across different technology platforms 

developed over several decades doesn’t help 

matters. “There are applications for delivery 

channels, compliance screening, account 

posting, settlement instructions, transaction 

routing and foreign exchange to name but 

a few,” says Kerr. “The traditional siloed 

view of operations provides information 

about a payment at a point in time within an 

application and, although most banks have 

a well-engineered ‘hand-shake’ between 

applications to ensure delivery and provide an 

audit trail and transaction status, it typically 

takes a significant amount of development 

effort to implement and manage. On top 

of this, there’s the complexity that comes 

with mergers and acquisitions, and different 

payment schemes, which means that 

“There is a real need 

to use out-of-thebox 

components that 

reduce the complexity of 

integration, and that both 

build on and with existing 

IT to avoid building costly 

technology islands” 

Andy Schmidt 

TowerGroup 

A social success 

The fast-evolving space of consumer-facing payments technologies is 

in stark contrast to the less transitionary, yet highly regulated, backoffice 

processing technologies. 

“Today’s financial institutions are faced with innovative consumer 

payment methods by mobile, contactless, or even through social 

networks like Twitter,” says Colin Kerr, Microsoft’s worldwide industry 

manager for payments and core banking. “Because of this, banks 

risk being relegated to payment processors, losing the connection 

with the customer. PayPal is perhaps the best example of this. PayPal 

doesn’t replace the need for banks to exchange payment settlements, 

but it can remove the bank from the customer experience at the point 

of payment initiation (in peer-to-peer payments), but this is precisely 

the experience banks need to protect.” 

Patrick Desmarès of the European Financial Marketing Association 

(Efma) agrees that banks need to be alert to the threat from nontraditional 

financial institutions, especially in regard to payments. 

“At our most recent Cards and Payments Conference, I found one 

particular presentation both interesting and alarming for the banks,” 

he says. “One of the global telcos, in conjunction with a major mobile 

manufacturer, gave the example of a typical non-banked independent 

worker who experiences basic payment and banking requirements 

like sending money to his family in the country, paying bills and 

managing his savings. Their idea was not to get him to open a bank 

account, far from it, but to offer him, through his existing mobile 

telephone account, a range of services which would respond to his 

financial needs and could be easily accessible through their own 

branch network. This person was thus going to deal efficiently with his 

money without the help of a bank. 

“There are globally four billion mobile telephone accounts against 

only one billion bank accounts. I am wondering how far the telcos will 

actually go in de facto competing with the banks and how the banks 

can manage this threat best in the large developing countries which 

offer, as we all know, the biggest growth potentials in retail banking.” 

In response to the challenge of disintermediation, Microsoft sees 

banks looking to innovate by offering payment services through social 

networking connections. 

“By offering virtual wallets connected to bank accounts that 

are accessible through chat, social networks and online gaming 

communities, banks can retain a payments presence in the mind of 

the customer,” says Kerr. “In fact, Microsoft has seen increased interest 

in banks looking to offer payment services through the Xbox and 

MSN online communities.” 

www.onwindows.com

sibos 2010 


achieving a cost-effective method for service 

delivery becomes extremely daunting.” 

Srinivasan Rangaraj, payments and cards 

solutions lead at Mahindra Satyam, agrees with 

Kerr: “Banks will undoubtedly need to overcome 

the limitations of legacy technology and 

processes. The prevalent payments technology 

landscape in the majority of banks is distributed, 

heterogeneous and inflexible, resulting in a high 

cost per transaction. The legacy systems have 

also resulted in a number of additional processes 

which only reduce the overall efficiency.” 

Clearly, financial institutions need to find 

a way to overcome these challenges. “If an 

organisation is still ploughing through data, 

deploying onerous processes and employing a 

lot of people who have to spend a considerable 

amount of time doing the work, then there are 

considerable efficiencies to be had by using 

“Technologies such as business process 

management and SOA integration with 

legacy systems have a key role to play in 

the integrated payments approach” 

Srinivasan Rangaraj, Mahindra Satyam 

technology,” says Leybourne. 

Harrison agrees: “While technology alone is 

not the sole decision factor behind addressing 

challenges, technology is seen as an important 

process of enablement, allowing an institution 

to achieve the ultimate requirement. Important 

factors to consider are the ability to provide a 

fast turnaround implementation, the ability 

to provide ease of use and be flexible enough 

to grow organically with future requirements 

whether driven by regulatory or commercial 

influences, and the ease of integration across 

different business silos in order to reduce the 

total cost of ownership. Last but not least, 

there also needs to be a wide market adoption 

among the community in order to provide 

future support, as well as potential access to 

human resource pool for any development 

and/or future maintenance requirements.” 

In the back office, an approach gaining 

industry momentum is to create a modern, 

consistent architecture framework to surround 

legacy systems with new processes and services 

and enabling the gradual replacement of 

legacy formats and systems. This framework 

should support interoperability with multiple 

platforms, and the new standards being 

developed for payments and banking. Initiatives 

from bodies such as International Organisation 

for Standards (ISO) with the ISO20022 

models, and the Banking Industry Architecture 

Network (BIAN) are firmly aimed at supporting 

interoperability to streamline processing. 

“At Microsoft we believe that a critical 

element in payments processing is the 

implementation of financial messaging 

frameworks; the glue that provides the much 

needed homogeneous integration between 

disparate systems and clearing mechanisms,” 

say Kerr. “Financial messaging, especially 

when built upon industry standards, can form 

a foundation platform for the development of a 

payments or capital markets framework, where 

integration technology, data transformation, 

and workflow management are used 

to orchestrate transaction flows among 

applications and clearing systems. In addition 

to messaging, some commonly used processes 

are required for transaction processing, 

including validation, routing, exception 

management and repair. By developing 

these processes as reusable services, the 

messaging infrastructure becomes more than 

an integration framework – it takes on the 

nature of a bus architecture where the lifecycle 

of a transaction can be mapped, calling the 

appropriate services as necessary.” 

Microsoft’s Financial Messaging Service 

Bus (FMSB) addresses these issues, providing 

partners with pre-built service components 

which simplify mission-critical financial 

messaging for banks, payments processors 

and other financial institutions, and provides 

a solution platform for Microsoft technology 

partners. Extensible across all financial 

messaging systems, it provides an integration 

framework allowing new solutions to be built 

and to co-exist with legacy applications as part 

of a technology renewal program. 

www.onwindows.com

sibos 2010 


“This approach will help banks to take a 

more integrated view towards payments and 

to help run it like a business,” says Rangaraj. 

“Technologies such as business process 

management and service-oriented architecture 

(SOA) integration with legacy systems have 

a key role to play in the integrated payments 

approach. These solutions will help banks to 

plug and play their existing legacy system and 

enable straight-through processing, directly 

integrating with the payment gateways and 

external interfaces. Microsoft’s BizTalk Server 

and the latest FSMB service around BizTalk 

Server have good functionality to build the next 

generation payment hubs.” 

“FMSB helps to connect and reuse existing 

technology and provides the perfect match 

for any organisation that decides to shift 

to SOA,” explains Dejan Petković, financial 

services manager at Saga. “Rather than create 

custom monolithic applications, customers 

can create business-oriented services, 

allowing them to be much more focused on 

solving real business challenges.” 

FMSB cuts the cost of development, and 

speeds up the implementation process by 

providing reusable SOA components to 

simplify financial messaging integration, 

rather than requiring extensive onsite process 

engineering. It saves financial services industry 

clients and technology solutions partners 

substantial time and money in building and 

implementing payments and capital markets 

solutions. Furthermore, FMSB components 

can be integrated easily with Microsoft Office 

products, including Excel and SharePoint, 

for a complete operations management and 

business intelligence solution. 

“Financial messaging and integration are 

becoming commoditised – and should be,” 

says Andy Schmidt, research director for global 

payments at TowerGroup. “Banks need a 

simpler, more cost-effective way to re-engineer 

payments processes but should be ensuring 

that they don’t reinforce silos. There is a real 

need to use out-of-the-box components that 

reduce the complexity of integration, and that 

both build on and with existing technology to 

avoid building costly technology islands.” 

In a recent press release announcing 

FMSB, Susan Hauser, vice president of 

Worldwide Industry and Global Accounts 

at Microsoft, said that financial messaging 

is the cornerstone for technology renewal 

in banks and other financial services firms. 

“Secure and reliable transaction delivery 

is essential to financial services firms, but 

technology solutions must also be costeffective 

to implement and manage. Our longstanding 

partnership with SWIFT, and our 

commitment to support technology partners, 

uniquely positions us to provide these reliable 

and cost-effective solutions to all financial 

institutions,” she explained. 

In response to the move from batch to 

real-time processing, Microsoft acknowledges 

the need for real-time analytics and business 

intelligence. “Rapid and direct access to 

information is essential,” says Kerr. “On one 

hand, corporate treasurers demand insight 

and visibility into their transactions as they 

endeavour to implement a more integrated 

financial supply chain using just in time 

concepts learned from manufacturing. On 

the other hand, banking regulations, payment 

Working together for SEPA success 

With the right solutions, financial institutions can realise the economic benefits of SEPA 

In June this year, the SEPA Council met for the 

first time. Bringing together representatives 

from both the demand and supply sides of 

the market to include consumers, corporate 

and public administrations, as well as 

financial institutions, the council was created 

to guide and strengthen the development 

of the European financial initiative, which 

aims to establish an integrated market for 

Euro payments. The SEPA Council has been 

welcomed by many in the hope that it will 

help to create a retail payment framework that 

fully meets the expectations of all affected 

parties. In line with this, technology solution 

providers have also taken it upon themselves 

to develop the IT infrastructures and systems 

required to help financial institutions comply 

with the new requirements. 

Stepping up to the challenge, Business 

Information Systems (BIS) is one such partner 

that understood the importance of identifying 

the specific requirements of the main 

stakeholders’ needs in order to help them 

comply with the new payments framework 

and set about developing a solution. The 

result was qPayIntegrator, a payments hub 

that ensures operational risk containment 

through clearing and settlement-related 

business flow automation and liquidity 

management, while providing a rich set of 

payment exceptions detections, early alerts 

for fraud attempts and competitive trends 

features. Designed specifically for commercial 

banks’ back-offices, state treasuries, corporate 

treasuries and service bureau payment 

businesses, qPayIntegrator is a platform that 

up-scales financial transactions processing 

across the supply chain, providing end-to-end 

business interoperability. 

While qPayIntegrator was initially 

developed and deployed based on other 

integrative technology, BIS architects later 

discovered the value Microsoft BizTalk Server 

could bring in terms of reducing development 

cycles and recurring maintenance costs. The 

team also wanted to take advantage of several 

new features, including over 25 multi-platform 

adapters, EDI connectivity, business activity 

www.onwindows.com

screening and liquidity requirements have 

operations managers demanding a level of 

insight not easily found from legacy batch 

processing environments. Further still, product 

managers want to see profitability by product 

and be able to model the effect of changing 

features or transaction volumes. Although 

coming from different ends of the payments 

value chain, these consumers of payments 

information have the same basic need: reliable 

and timely insight into payments processing 

to satisfy clients and mitigate risk. Achieving 

answers to these challenges requires a business 

intelligence solution that transcends operational 

and technology silos and enhances the value of 

integration beyond mere plumbing.” 

An example of a business intelligence 

solution that can meet these needs comes as 

a result of a recent collaboration between Citi 

and Microsoft. “CitiDirect BE is a corporate, 

government and institutional client portal, 

which leverages Microsoft SharePoint Server 

to provide access to payment applications and 

cash reporting, but also deliver rich analytics 

in transaction processing, STP metrics and 

Taking a corporate perspective 

Over the past 45 years, as electronic payments one or two European Automated Clearing 

have continued to develop globally, the biggest Houses (clearing settlement mechanisms) have 

stumbling blocks for changes in strategic already made major investments to help banks 

direction have been cumbersome IT systems, provide corporate customers with relevant 

processes and business methodologies, and immediate business benefits – enabling 

combined with differing national payment the banks to grasp opportunities arising from 

standards and banking regulations. 

payments industry developments such as the 

While until now financial institutions have UK Faster Payments service, SEPA and the future 

coped, the ongoing demand for flexibility decommissioning of cheques. 

is now placing enormous pressure on the “Payments and collections in the corporate 

banking industry to implement the necessary world are evolving and, against a backdrop 

backbone, platforms and mechanisms to of increasing globalisation, the move towards 

facilitate new processes. 

a cashless society and the need for real-time 

“It has become clear that corporates want transacting, payment software providers must 

applications that will support their business continue to innovate and anticipate the needs 

strategies, such as direct access, real-time of corporate organisations,” Leybourne adds. 

payment systems, advanced direct debit services “Financial institutions, meanwhile, must quickly 

and payment capture capabilities,” says Georgia embrace these transformations and ensure 

Leybourne, sales and marketing director at they have the necessary infrastructure in place 

Albany Software. “These are areas where to support them.” 

monitoring, RFID capabilities and IBM host/ 

mainframe connectivity). As a result, BIS 

decided to port its payment engine on BizTalk 

technology. With Microsoft’s support, the 

complete process – from technical platform 

preparation, solution redesign, development 

and software maintenance – proved 

straightforward. 

With a commitment to providing 

trustworthy solutions, qPayIntegrator is 

certified for the following: SWIFTReady 

Application SEPA 2008 (first solution endorsed 

by SWIFT for the SEPA track); SWIFTReady 

Application SEPA 2009; SWIFTReady 

Application Workers’ Remittances 2010 (under 

certification); and Microsoft ‘Compatible with 

Windows 7’ certification 2010. 

BIS has already carried out a number 

of implementations of qPayIntegrator, 

including a proof-of-concept deployment at a 

Romanian bank and a rollout at the Romanian 

Ministry of Public Finance, where the system 

is being piloted as a governmental funds 

management system. Here, the solution’s 

built-in scalability is being taken advantage 

of to control financial execution through a 

secure funds channel, to achieve transparency 

in the financial management of the public 

funds, operational risk containment, advanced 

liquidity reporting and forecasting, as well as 

business alignment to EU financial regulations. 

A western European micro-financing company 

is also working with BIS to deploy the solution 

to ensure the business-to-business integration 

of its back-office systems with external mobile 

payment providers. 

Commenting on the success of 

qPayIntegrator last year, Microsoft’s vice 

president of worldwide industry and global 

accounts Susan Hauser said: “Banks are 

focused on achieving greater interoperability 

and higher quality distribution channels 

that provide enhanced treasury services to 

customers in order to help them realise the 

economic benefits of SEPA. We are pleased 

to be working with leading financial services 

partners such as BIS to help our customers 

achieve these goals.” 

33

sibos 2010 


other treasury functions,” explains Kerr. 

“This engagement aligns with our enterprise 

market strategy of driving integrated customer 

experiences,” said Hauser. “Our collaboration 

is a unique opportunity for Microsoft to help 

financial services institutions realise a better 

customer-connected experience because Citi 

will have access to a virtual lab of engineering 

thought leaders, and have direct influence over 

enterprise product road maps.” 

All of these technologies provide the 

foundation for financial institutions to not 

only execute their own strategy, but also 

set their own direction within the future of 

payment processing. “Over the coming years, 

as the world economy and its financial systems 

go through their improvement lifecycles, 

the payments landscape is going to observe 

noticeable evolvement,” says Harrison. “As 

the volume of electronic payments continues 

to grow within payment channels such as 

Internet and mobile phone banking, and 

market and funding liquidity becomes tighter 

as a result of increased regulation, there will 

be a greater desire for capital visibility in real 

time. This will cause a natural coercion to have 

a single infrastructure to provide same day 

settlement for all payments regardless of size. 

Existing low value payments usually batched 

for next day settlement will transition towards 

same day settlement, which categorically have 

been assigned to high-value gross settlement 

systems. As this transition takes place 

gradually, the banks should act tactically and 

strategically in a manageable period of time 

to eliminate the existing redundant and often 

siloed payment systems into a single unified 

solution. Accepting the simple yet holistic 

view of payments via a single unified approach 

will subsequently drive the banks to improve 

their bottom lines overall, as well as improve 

cost and risk management and also increase 

service levels to their end customers.” 

“Microsoft envisions its approach to payments 

as a means to assist payments providers without 

imposing a fixed approach to the market,” says 

Kerr. “The road to SEPA has been a long journey 

– and it will still be some years until it is fully 

realised. Although the end-state has not yet been 

fully defined, banks have an opportunity to start 

building a flexible integration architecture now. 

This may be part of a broader enterprise payments 

hub project, or merely a means of cleaning up 

legacy system integration. A framework approach 

using both can create efficiencies and lower cost 

of new development – whatever 

that may be.” 

partner spotlight 

Microsoft and its extensive partner network are committed to helping financial institutions succeed. Here's a selection of the key 

partners that are currently working with Microsoft to deliver industry-leading payments solutions: 

Albany Software is a leading authority in the electronic payments 

market, providing a comprehensive portfolio of solutions designed to 

facilitate electronic payments, collections and document delivery. It has 

already enabled thousands of UK customers to benefit from process 

automation, increased efficiency and significant cost reductions. 

Saga, member of New Frontier Group and Microsoft Gold Certified 

Partner, is the number one system integrator in Serbia, and one of 

the leaders in EMEA, with over 500 large customers. Established in 

1989, we specialise in software and consulting services for financial 

solutions, with full portfolio of IT products, solutions and services. 

Mahindra Satyam is part of the US$6.3 billion Mahindra Group, a 

global industrial conglomerate and one of the top ten industrial firms 

based in India. The group’s interests span financial services, automotive 

products, trade, retail and logistics, information technology and 

infrastructure development. The company serves numerous clients, 

including many Fortune 500 organisations. 

Decillion Group is a systems integrator and solutions provider 

offering both stand-alone and “Software as a Service” solutions to 

the financial industry in the Asia-Pacific region. Decillion Group 

have combined their wealth of experience in financial messaging, 

with Microsoft BizTalk Server to bring you MAPS, the Modular 

Automated Processing System. 

www.onwindows.com

feature 

Governance, risk management and compliance 

know 

risk 

With the regulatory environment tightening up, financial institutions can’t afford 

to roll the dice on risk. Lindsay James explores the technologies that can help 

Governance, risk management and compliance (GRC) 

initiatives are inescapable for most financial institutions. 

Basel II, fraud detection, anti-money laundering, and 

compliance with issues such as the International 

Accounting Standards and Sarbanes-Oxley, have 

significant implications for the way these companies 

collate, analyse, and report on the data they use in 

processing and managing their businesses. 

But this is just the tip of the iceberg. As well as the plethora 

of new regulations that are being introduced in many different 

countries, there is also an increasing number of electronic 

communication regulations, which cover everything from 

the way financial institutions store e-mails, through to voice 

compliance in the control rooms. 

Mark Bates, CEO at RDT, says that this is a much more 

stringent landscape than in the past. “Although GRC has 

always been an important issue for financial institutions, 

UK regulations have historically been largely voluntary,” he 

explains. “With the events of the last couple of years and 

the economic downturn, it became clear that the UK needed 

more compulsory risk management standards.” 

Sai Sireesh, Microsoft’s director for risk and compliance 

industry strategy, agrees with Bates: “There’s a move away 

from the light touch supervision style that has been favoured 

in the past, towards a more stringent regulatory environment. 

This brings strict standards for liquidity risk, stress testing 

and dynamic capital buffers,” he says. “Financial institutions 

also have to adhere to guidelines for the management of 

things like e-mails, blogs, wikis and electronic and voice 

communication, as well as the Financial Industry Regulatory 

Authority’s guidelines on social media monitoring and 

compliance. Not only this, but with the rapid adoption of 

cloud and online services, new aspects of regulatory and risk 

management needs around governance, risk mitigation and 

data compliance in cloud are emerging.” 

This prescriptive regulatory environment is augmented 

www.onwindows.com

further by Europe’s agreement 

to adhere to new stress testing 

guidelines. For the first time, 

banks need to implement reverse 

stress testing methodology that 

will help identify and assess 

the conditions and scenarios 

that will most likely impact 

their business viability and 

lead to their collapse. Banks 

are expected to build a robust 

stress testing and scenario analysis 

infrastructure to assess capital needs in 

a crisis environment. 

“The Financial Services Authority (FSA) 

has been the first regulator to ask banks to 

report more frequently on their global positions 

and risks, and stress test their books,” explains 

37

feature 


Simon Trewin, associate at specialist risk and 

data management services provider, IMGroup. 

“To make sure that the recommendations are 

followed, banks have to implement a top 

down approach to managing risk, driven from 

the board down through the risk management 

organisation to the trading activities.” 

This type of stress testing requires the 

analysis of huge amounts of data, requiring 

data warehousing which may use hundreds of 

terabytes. “This creates huge problems for risk 

managers because the cost of data warehousing 

is increasing, and as more data is used, the 

slower the performance,” says Sireesh. 

Clearly there’s a huge amount of pressure 

on risk managers’ shoulders, and something 

needs to change so that financial institutions 

can adapt to new regulations quickly and 

easily. With this in mind, a move toward 

transparency is vital. “Financial institutions 

by nature are transaction heavy organisations, 

but also tend to have significant complexity 

within some of those strings of transactions,” 

says David Taylor, vice president of strategy 

at Trintech. “Financial institutions tend to 

be rather fragmented, both on a local and a 

global stage, where some of the largest banks 

in the world exist in almost every country. 

With that perspective, there is a significant 

need for oversight, visibility and transparency 

into the operations of the bank on a periodic 

basis, in a timely manner.” 

Trewin agrees, adding that financial 

institutions need to take a much more longterm 

view in order to succeed. “Through 

the boom times of the last decade, financial 

institutions focused largely on revenue 

generation and built their businesses as 

rapidly and independently as possible,” he 

says. “This had the effect of creating large 

siloed infrastructures across reference data, 

analytics and trade representations. The 

recent regulatory and reporting requirements 

have now placed an emphasis on institutions 

being able to calculate and manage risk on 

a more holistic basis. To achieve this, they 

need to take a longer term view regarding 

implementing and managing systems. This 

means standardising data representations 

and systems, and implementing a single view 

of the truth.” 

Laurent Villiers, product manager for risk 

management at Sophis, adds that financial 

organisations are under extraordinary 

pressure to create operational efficiencies and 

tighten up their risk management procedures. 

“Given the circumstances of the past few 

months, this can no longer happen in isolated 

silos,” he argues. “One of the legacies of the 

financial crisis is that organisations need risk 

management systems and processes that are 

capable of delivering stability and security in 

the new world.” 

In addition to greater transparency, 

financial institutions also need access to 

more detailed and accurate information. 

“Once, it would have been ok to provide just 

the high level risk numbers, whereas now 

clients and regulators are all demanding 

greater granularity to see under the headline 

figures to the portfolio, to a position, a trade, 

an instrument and down to an instrument 

Embrace technology for easier compliance 

Risk management and compliance is a constantly evolving landscape, and insurers must adapt quickly to ensure they are compliant at every level 

The UK’s regulatory landscape is in a period 

of change with the disbandment of the FSA 

and establishment of the Bank of England 

responsible for macro-regulation via the 

Financial Policy Committee. Under these new 

bodies and a coalition government, insurers 

are likely to face a new wave of regulations, 

posing new and more demanding challenges 

above those already in place. 

With both regulation and technology 

progressing at such a rate, insurers need 

to ensure they are one step ahead to 

future proof their businesses. Yet some 

organisations are still not making the best 

use of the tools available to them. An 

automated back-office system can allow 

changes in policy and regulation to be 

rolled out across an organisation’s business 

processes instantly, while updating all 

relevant components and eliminating scope 

for human error. 

Insurers need to embrace these 

technological advancements and analyse 

the potential return on investment and 

cost savings realised when upgrading from 

a legacy system. Legacy systems that are 

unable to talk to each other and require 

information to be pulled together manually 

are a labour drain. This opens up the 

potential for human error and, ultimately, 

non-compliance. 

To help clients deal with this evergrowing 

tide of regulation and compliance, 

insurance administration solutions specialist 

RDT has developed a fully integrated 

complaints module for its Landscape.NET 

solution to support its customers’ FSA 

obligations, specifically regarding ‘Treating 

Customers Fairly’ (TCF). In addition to 

regulatory support, the new module 

introduces significant business processing 

efficiencies around complaints processing 

while delivering powerful real-time 

management information. 

“The integration of a complaints module 

within our system means compliance 

managers have a toolset whereby they can 

graphically design and effect processes 

within minutes,” says RDT’s CEO Mark Bates. 

“This not only removes the dependency 

on scarce IT staff, along with the associated 

www.onwindows.com

pricing model and all supporting reference, 

static, market and derived data,” explains 

Brian Sentance, CEO at Xenomorph. “Another 

dimension of increased granularity for many 

firms is to have the capability to revalue an 

instrument or portfolio to justify why its value 

was at the value used historically. Being able 

to ‘re-create the market’ is a big challenge 

in terms of the management of data and 

analytics.” 

Kenan Maciel, director at Lab49, agrees 

that data is king. “The crisis highlighted 

weaknesses in individual banks’ risk 

management systems,” he says. “For example, 

the collapse of Lehman Brothers saw many 

banks struggle to determine their exposure to 

the group across all of their business lines. In 

many cases a huge manual effort was required 

to ascertain this. Part of the issue lies in not 

having consistent static and reference data 

across the bank. Different product systems 

could refer to the same counterparty using 

different codes and names. Even securities 

are sometimes not referenced consistently.” 

If one word could sum up the problems 

that respondents face with managing 

regulatory risk, it is ‘complexity’, and this is 

something that financial institutions need 

to address in order to move forward. “A 

framework for oversight and visibility into 

Complex event processing 

A technology that is gaining wider use in 

the area of risk management is the use 

of complex event processing (CEP). “This 

lets a bank react quickly to diverse market 

events, automating pricing or hedging for 

example,” explains Kenan Maciel, director 

at Lab49. “This technology has been 

effectively used in equities trading and is 

now spreading to other asset classes. It 

is also usefully employed in compliance 

surveillance where events are analysed for 

transactions is really critical,” says Taylor. 

“This involves technologies like dashboarding 

and business process management, but 

also bringing together some of the critical 

transactional functionalities necessary for 

operations of those processes. At the end 

certain patterns such as the execution of 

wash trades on exchanges.” 

Microsoft’s StreamInsight is a good 

example of a CEP engine, as Maciel 

explains: “LINQ, the query language used, 

is core to .NET and integrates fully with it. 

Lab49 has built a working prototype risk 

management solution using StreamInsight 

with a Silverlight front end. Silverlight is 

increasingly becoming the technology of 

choice for rich Internet applications.” 

costs and lead times, but empowers the 

compliance team to meet internal and 

external key performance indicators while 

eliminating business risks.” 

RDT says the ability to fully configure 

the complaints handling process enhances 

communications within an organisation, 

hence ensuring a speedier and more efficient 

experience for clients. Aside from delivering a 

full audit trail, RDT’s new complaints module 

delivers functionality such as complaint 

status, age and payment redress, as well as 

detailing complaints sent to the Financial 

Ombudsman Service. 

Insurers also need to consider 

embracing new consumer trends such as 

the rise of social networking technology, 

which is set to continue and have a huge 

impact on the ways insurers interact with 

customers. Mobile phone apps are also 

in development to enable customers to 

send all their claims information at the 

time of a motor accident, accompanied 

by photographs. These apps are likely to 

develop further with the proliferation of 

Web 2.0 and cloud computing technology, 

and the interactive information sharing 

these platforms enable. All of these trends 

will inevitably mean insurance companies 

will have to deal with the new data security 

issues and associated risks. 

RDT is a leading supplier of insurance 

systems and rating engine software 

“The integration of a 

complaints module 

within our system means 

compliance managers 

have a toolset whereby 

they can graphically 

design and effect 

processes within minutes” 

Mark Bates 

RDT 

39

feature 


of the day, financial institutions, although 

they appear to be a recovery mode, need to 

implement risk management structures and 

compliance frameworks in a responsible 

manner that is not going to be costly to the 

organisation. Implementing the right system 

will allow easier adoption of new regulations 

and compliance mandates. Taking a strategic 

approach towards risk management and 

compliance technologies is important.” 

Microsoft is focused on helping financial 

institutions to create this strategic approach. 

“Microsoft’s vision is to make GRC a part of 

everyday activities for finance employees,” says 

Sireesh. “We do this by creating a platform 

that focuses on efficiency and productivity, 

with emphasis on simpler, faster and costeffective 

execution. The focus on people, 

policies, processes, workflows, data and 

reporting as the basic building blocks for GRC 

initiatives will continue to be strengthened.” 

“Microsoft technologies are key to helping 

us bring products to market faster,” says 

Villiers. “Not only this, but they offer many 

benefits to financial institutions. With 

a solution built on the Microsoft stack, 

businesses can access data quickly and 

easily, creating more efficient processes. Also, 

because the solutions are familiar to users, it 

means that training new employees is really 

straightforward.” 

In fact, Microsoft tools and capabilities 

are widely used by many Fortune 500 

companies in their risk and compliance 

projects. Microsoft Office Excel, PowerPoint 

and SharePoint are still the most popular last 

-mile tools for reporting risk and compliance 

to top management. 

Building on these solutions, Microsoft 

has recently launched PowerPivot for Excel 

2010, a new data analysis tool that delivers 

unmatched computational power directly 

within Microsoft Excel. “PowerPivot allows 

users to process millions of rows in a matter 

of minutes using multi-core processors 

and gigabytes of memory for rapid fire 

computing,” says Sireesh. “Quite literally in 

split seconds, risk managers can transform 

enormous quantities of data into meaningful 

information to get the insight they need.” 

Also part of the solution, Excel-based 

in-memory analysis overcomes existing 

limitations for massive data analysis on 

the desktop, with efficient compression 

algorithms to load even the biggest data sets 

into memory. Data Analysis Expressions puts 

powerful relational capabilities into the hands 

of power users who want to create advanced 

analytics applications. 

In addition to this, the newly launched 

Microsoft SQL Server 2008 R2 Parallel Data 

Warehouse offers an extremely efficient data 

storage solution. “This is a highly scalable 

data warehouse appliance that delivers 

performance at low cost through a massive 

parallel processing (MPP) architecture,” says 

Sireesh. “The MPP architecture helps enable 

better scalability, better and more predictable 

performance, reduced risk and a lower cost per 

terabyte than other data warehouse solutions.” 

SQL Server 2008 R2 Parallel Data 

Warehouse is the evolution of the data 

Viewpoint: USB flash memory security: are you in the know? 

Steve Hall discusses two key issues of USB flash devices – data protection and data security 

With the need to transport sensitive data 

to customer meetings or internal reviews, 

the use of mobile storage in financial 

organisations is high. Unfortunately, since 

November 2007 in the UK alone, there were 

over 800 reported incidents of lost data 

(Information Commissioner’s Office, 27 

January 2010), and this does not take into 

account all of the issues NOT reported. There 

are significant costs to an organisation as a 

result of any loss of confidential data. This 

can be represented by substantial fines and 

penalties (if the organisation has breached 

data protection laws), but also in terms of 

lost confidential data, product designs and 

financial data. Costs per lost record are on 

average £64, and, according to the 2009 

Annual Study: UK Cost of a Data Breach by 

the Ponemon Institute, sponsored by PGP, 

the total cost to resolve a serious data loss or 

breach can be as high as £3.9m. 

Financial organisations rightly spend 

a significant amount of their IT budgets 

securing their networks and ensuring that 

confidential data is protected and secure. 

However, ensuring that data held on USB 

drives is held safely and securely is an area that 

is still often overlooked. Many organisations, 

to reduce their risk, have disabled USB ports 

on client machines to render them useless. 

This is counterproductive as the risk of data 

loss can be overcome by standardising on 

a suitable secure USB drive for all users, and 

‘locking down’ the USB ports of computers to 

only accept this chosen drive. 

Although there are many secure USB 

drives, not all claims of security are what they 

may seem. In order to be truly protected 

and secure, confidential company data held 

on USB drives needs to be automatically 

protected by 256-bit AES (Advanced 

Encryption Standard) hardware, as used on 

Kingston Technology’s DataTraveler Vault 

Privacy and DataTraveler 5000 USB drives. 

There is no need to install drivers onto a 

client or to run other programs to encrypt a 

file and then separately copy the processed 

file to the USB drive. Also, users can’t forget 

to secure confidential files, as all they have 

to do is drag and drop the files to the 

DataTraveler Vault Privacy or DataTraveler 

www.onwindows.com

“Today’s technology is 

going to have to grow 

to be a more scalable 

commoditised resource 

using cloud technology to 

keep costs under control 

and application frameworks 

flexible to change” 

Simon Trewin 

IMGroup 

warehouse appliance created by DATAllegro, 

acquired by Microsoft, and uses MPP to 

deliver the high performance and scalability 

on SQL Server 2008, Windows Server 

2008 and industry-standard hardware. “In 

a traditional, symmetric multi-processing 

architecture, query processing occurs entirely 

within one physical instance of a database,” 

Sireesh explains. “The central processing unit 

(CPU), memory, and storage impose physical 

limits on speed and scale. A Parallel Data 

Warehouse MPP appliance partitions large 

tables across multiple physical nodes, each 

node having dedicated CPU, memory, and 

storage, and each running its own instance 

of SQL Server, in a parallel nothing-shared 

design. All components are balanced against 

each other to reduce performance bottlenecks, 

and all server and storage components are 

mirrored for enterprise-class redundancy.” 

This MPP architecture can cost less 

because, rather than relying on expensive 

proprietary processors or storage, Parallel 

Data Warehouse appliances use industrystandard 

hardware. As data volumes grow, 

scalability simply requires the addition of 

capacity to the appliance. There is no need for 

a forklift upgrade, where the entire appliance 

must be upgraded. 

Looking to the future, Bates believes 

that the cloud will undoubtedly make an 

impact. “The huge resource offered by the 

cloud enables real-time roll out of rates, 

policy changes and regulatory changes,” 

he explains. “Cloud computing can offer 

companies significant benefits in the form 

of cost reduction, since an organisation only 

pays for the processing power they use, but 

also has the benefits of scalability. As with 

any new technologies cloud computing again 

has associated perceived risks; however there 

should be no reason why a company that has 

its data held on servers externally is at any 

more risk than if those servers were internal.” 

This is an area where Microsoft is investing 

heavily, applying its Trustworthy Computing 

Security Development Lifecycle, and Security 

and Privacy standards to its Windows Azure 

5000. Encryption is automatic. This makes 

the drive easy to use anywhere, without the 

risks associated with hackers interrogating 

software or key strokes. Without a valid 

password, unauthorised access to the whole 

storage area of the drive and the data it 

contains remains encrypted and protected. 

Kingston Technology’s DataTraveler Vault 

Privacy and DataTraveler 5000 USB drives also 

have a factory-set limit that locks the drive 

after a number of failed attempts to log in. 

This limit blocks ‘brute force attacks’ in which 

programs are used to test millions of password 

combinations. Once locked, the only option 

left is to reformat the drive, thus losing all the 

encrypted data on the drive for good. 

In order to make this solution seamless 

with your existing security, an endpoint 

management solution should be employed. 

This will ensure that only hardware-based 

encrypted USB drives are used, and therefore 

data is automatically protected. Think of it as 

‘always-on’ protection for all your mobile data. 

Very few data loss incidents are malicious. 

Users need to take data out of the 

organisation for a variety of valid reasons 

and they will find a way to do this even if 

you have not authorised it. It is still possible 

to maintain ease of access and use of 

mobile data with security implemented by 

using the correct tools. 

Steve Hall is European product development 

manager of Flash at Kingston Technology 

“Very few data loss incidents 

are malicious. Users need 

to take data out of the 

organisation for a variety of 

valid reasons and they will 

find a way to do this even if 

you have not authorised it” 

Steve Hall 

Kingston Technology 

41

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“Microsoft technologies 

are key to helping us bring 

products to market faster. 

Not only this, but they offer 

many benefits to financial 

institutions” 

Laurent Villiers 

Sophis 

cloud environment. In addition to this, the 

solution has recently earned the Statement on 

Auditing Standard (SAS) 70 Type II, Federal 

Information Processing Standard (FIPS) 

140-2 compliance, and the International 

Organization for Standardization’s (ISO) 

27001 standard – among others. 

“Be it VAR, Monte Carlo, historical 

simulation, stress testing, back testing, actuarial 

modelling, these all need huge computing 

power,” says Sireesh. “A key problem today 

is that the throughput could vary depending 

on the level of portfolio subjected to the stress 

test or scenarios being applied. This means that 

financial institutions need to invest in a high 

performance computing environment to meet 

peak volumes, and which potentially would 

remain idle in normal volumes, impacting 

return on investment and cost decisions. With 

the recent launch of Microsoft Windows Azure 

cloud offerings, there is a way out.” 

An implementation at risk measurement 

specialist RiskMetrics highlights the benefits that 

a move to the cloud can bring. Offering Monte 

Carlo-based risk analytics to financial institutions 

to measure and model complex instruments, 

RiskMetrics processes daily models comprising 

four million securities spanning 750,000 

market data time series. Its key challenge was to 

predictably manage large bursts of computing in 

a short time for Monte Carlo simulations during 

peak loads, that could be as high as ten times the 

normal capacity planned for. 

RiskMetrics adopted a pay per use 

Windows Azure and Windows High 

Performance Computing environment to 

manage computing needs for its risk analysis, 

which was integrated with .NET 3.5.1 and 

Visual C++ 2008 development environments. 

This offering complements RiskMetrics’ 

on-premises infrastructure with Windows 

Azure OS - Development, Service hosting 

and Service management environment. 

For peak loads, RiskMetrics taps additional 

Windows Azure resources. It’s a combination 

of processing complex calculations on Azure 

and integrating with local RiskMetrics 

analytics architecture. 

With Windows Azure, RiskMetrics 

has extended its risk-analysis solutions to 

Viewpoint: Growing ambitions 

Risk management technology has evolved to meet the highest of expectations, says Simon Trewin 

Four years ago, almost to the day, I joined a 

tier one investment bank as vice president 

within its credit trading technology 

department. The first project lined up for me 

was to implement a risk aggregation and 

reporting system using Microsoft SQL Server 

2005. At the time, I had some experience of 

building star schemas and pushing the limits 

of the database management system to 

achieve the best performance possible, but 

the technology stack was new to me. 

Needless to say the timelines on the project 

were aggressive, and the ambitions were big. 

We needed to reduce the batch cycle time 

by 60 per cent, but at the time this was how 

long it took the grid to run calculations on the 

products. We were dealing with around 25 

million rows of batch data, which we had to 

load into a database and build a cube ready 

for the traders to start work. So we clearly had 

our work cut out. 

In order to meet our ambitious targets we 

pulled in some expert advice from a Microsoft 

business partner, IMGroup, specialists in the 

area of building risk management solutions. 

Together, we delivered the project to the 

deadlines expected. When we had the 

opportunity to demonstrate the results to 

most of the senior management within the 

firm, they were impressed. I can honestly say 

that the solution caught the attention of all 

who looked at it. The ease of integration into 

Excel was remarkable, as was the ability to look 

at the risk on an individual credit and then to 

drill down to find valuable information, which 

was accessible by not only the risk department, 

but product control and senior management. 

Not only that, but the cost of ownership was 

relatively inexpensive and the solution was 

using everyday technologies. We were also 

able to rapidly make changes to the system, 

which, during the time of the credit crunch, 

proved invaluable. 

Since this project you could say I have 

never looked back. Several years on and I 

had the good fortune of being able to reuse 

the Microsoft technology stack again, but 

this time things had moved on. I was now 

www.onwindows.com

dynamically scale to meet processing demand. 

The company can now provide enhanced 

services for more customers, while reducing 

the amount of new investment required. It 

can innovate with more agility and bring 

new products to market that would not have 

otherwise been commercially viable. 

“We’re using Windows Azure to meet the 

evolving needs of our clients,” says Rob Fraser, 

head of cloud computing at RiskMetrics. “And, 

with the reduced levels of new investment 

required, we can consider solutions that might 

otherwise not have been possible.” 

Trewin believes that it won’t be long before 

the rest of the industry follows suit. “Today’s 

technology is going to have to grow to be a 

more scalable, commoditised resource using 

cloud technology to keep costs under control 

and application frameworks flexible to change. 

Data growth is going to continue to outstrip 

availability, and the management of this is 

going to require specialist skills and technology 

solutions. It is likely that hardware appliance 

devices are going to be required to handle 

specific use cases around risk and compliance.” 

“Microsoft’s vision is to make GRC a part of 

everyday activities for finance employees. We 

do this by creating a platform that focuses on 

efficiency and productivity, with emphasis on 

simpler, faster and cost-effective execution” 

Sai Sireesh, Microsoft 

running the risk re-engineering programme 

for rates technology at the bank. It was a 

bigger business area, and the ambitions were 

bigger still. I had to implement the solution 

across all of the business lines within rates 

globally, with the ability to run risk on demand 

and provide access to reporting instantly. 

We pulled in IMGroup again, which helped 

us to manage the one billion rows of data in 

the system. We also needed on-demand risk 

analysis and scalability to match the flexibility 

of the grid. Not only that, but the users were 

globally distributed and we needed to provide 

each location with similar response times 

and capabilities. We went with Microsoft 

C#, .NET, SQL Server 2008, analysis services 

and integration services. The query times 

were better and the amount of data we were 

looking at was going to need a new strategy. 

Again, we met all of our deadlines for the 

project. The traders and senior management 

were very happy with the results. I am now 

working as an independent consultant 

in association with IMGroup and we are 

working with a number of investment banks. 

Needless to say, the projects are ambitious, 

the timelines are aggressive and the solution is 

most certainly evolving. 

Simon Trewin works as an associate to 

specialist risk and data management services 

provider, IMGroup, through his firm TecCadia 

“In order to meet our 

ambitious targets we pulled 

in some expert advice 

from a Microsoft business 

partner, IMGroup, specialists 

in the area of building risk 

management solutions” 

Simon Trewin 

IMGroup 

43

focus 

payments 

The payments 

transformation matrix 

Srinivasan Rangaraj presents one approach to helping banks move 

progressively from silo payment systems to integrated ones 

The payments landscape as we know it is 

changing fast. In the last decade and a half or 

so we have seen the rapid adoption of electronic 

payments, and while this channel has helped 

realise a significant decline in clearing and 

settlement times, many are still looking to 

further reduce processing costs, improve 

customer service, introduce new products faster 

and achieve better compliance with anti-fraud 

legislation. To meet these ongoing demands, 

new channels such as peer-to-peer, businessto-customer, 

business-to-business and micropayments 

have also emerged, and although each 

offers unique benefits, the institutions that will 

really profit are the ones that create an integrated 

approach to dealing with payments as a whole. 

A number of payment hub/engine solutions 

that serve to integrate all channels already exist 

on the market today. What is missing, though, is 

a systematic approach that helps banks transform 

their legacy silo systems into a more integrated 

payment hub model and achieve similar results. 

At Mahindra Satyam, we believe having an 

understanding of a company’s business drivers and 

technology landscape is critical for designing an 

appropriate strategy for payment transformation. 

These can be determined as follows. Business 

drivers – customer (demands, security concerns, 

transaction transparency and control), bank 

(internal payment strategy including cost, security, 

operational efficiency, new product launch, straight 

through processing and regulatory) and regulations 

(complying with Sepa, Swift, XML200022, AML, 

Basel II and EMV). And technology parameters – 

distributed (software and hardware is distributed 

across geographies), heterogeneous (a different mix 

of both software and hardware) and autonomous 

(duplication of functionalities). 

Taking all these elements into account, we 

have developed a payments transformation 

matrix that summarises the key challenges and 

best practices pertaining to different business and 

technology scenarios. It can be used by banks to 

gain a holistic view of the current landscape and 

emerging challenges, and define an appropriate 

transformation strategy. 

One of the predominant scenarios that many 

banks find themselves in is the regulatoryautonomous 

scenario. Today, regulatory 

pressure is high and one has to comply within 

stipulated timelines. Duplication of functionality 

(autonomous) hinders the application of regulatory 

changes and certifications. The best practices to 

address these challenges will be to move towards 

a standardised approach like the ISO 20022 XML 

standards, remove the duplicate functionalities 

and connect the systems using service-oriented 

architecture (SOA). 

Another scenario that we often encounter is 

the customer-autonomous scenario. Customers 

demand transparency and control of the payment 

transaction, which means the bank has to 

come up with new product channels with high 

security solutions. In such cases, the banks end 

up duplicating the same functionality due to the 

existing constraints. The best practices here are to 

integrate the new application with existing ones 

using SOA, centralise content management and 

remove duplicate functionality. 

Ultimately, if banks want to get away from 

their current silo payment systems and establish 

integrated approaches, they need to be able to 

identify what their business drivers are and what 

technology they have in order to develop a suitable 

framework. This will help them to execute what they 

have planned and reach their desired goal. 

“Customers demand 

transparency and 

control on the payment 

transaction. Banks have 

to come up with new 

product channels with 

high security solutions” 

Srinivasan Rangaraj 

Mahindra Satyam 

www.onwindows.com

focus 

payments 

Responding to 

the cashless society 

Consolidate payments processes in order to adapt to change, says Adrian 

Stafford-Jones 

The past decade has seen an inexorable shift 

towards the cashless society – from the way in 

which consumers pay for goods and services to 

the way businesses pay employees. According 

to a report from The Payments Council, in 

1991 companies paid the wages of one in eight 

employees in cash and in 2009 that figure had 

reduced to only one in 20. 

This shift has been driven in part by the declining 

number of manufacturing employees; but other 

factors, such as the increasing use of credit and debit 

cards in restaurants and pubs, for example, have 

also encouraged a greater number of employers to 

move away from cash wages. And businesses are 

reaping the rewards, with feedback from employers 

suggesting that the cost of paying wages via direct 

Bacs is significantly lower than paying in cash. 

The rise of Internet banking, the arrival of such 

services as Faster Payments in the UK and the 

planned abolition of cheques are also contributing 

to a changing payments landscape. Indeed, Faster 

Payments has gained significant momentum, 

accounting for £294 million in 2009, and there is 

no doubt that it would make an even bigger impact 

if more banks were involved. 

The arrival of the Single European Payments Area 

(SEPA) will also pave the way for faster, cheaper, 

global payments. While SEPA itself is somewhat 

limited by a lack of corporate gateway, this interbank 

standard has prompted a number of thirdparty 

organisations to develop solutions to meet the 

growing demand for streamlined and cost-effective 

global payments. 

It would seem businesses now have the chance to 

fully embrace electronic payments to pay suppliers 

and wages and trade internationally. But how many 

companies are now juggling far more payment 

methods than necessary, from cheques and PayPal 

to credit and debit cards as well as direct Bacs, 

Internet banking and Faster Payments? There is a 

clear need to consolidate these payment processes, 

but what is the most viable solution? 

The most obvious answer would appear to be 

Internet banking. However, effective payments 

management demands the ability to make volume 

payments, schedule forward payments and 

introduce multi-layer authorisation to reduce the 

onus on the finance director – all facilities currently 

lacking in Internet banking. 

In addition, effective payments management also 

requires the ability to integrate all of the key payment 

mechanisms – direct Bacs, bulk Faster Payments and 

global payments – into a single, integrated payments 

gateway. Within a secure, consolidated payments 

environment, organisations can put in place effective 

authorisation via workflow management, attain 

excellent auditability and achieve complete visibility 

of all payments and collections, enabling businesses 

to gain better insight into the day to day cash position. 

Reporting from this single payments gateway 

also provides organisations with insight into 

payment trends, which can be used to drive further 

improvements in cash flow management, achieve 

greater efficiencies and impose greater control over 

the payment function. 

The payments landscape is changing, radically. 

Cash is in terminal decline and the Payments 

Council has called long overdue time on the cheque. 

With the arrival of bulk Faster Payments and 

global payments alongside the tried and trusted 

direct Bacs model, organisations now have a real 

chance to drive down costs and gain real control 

over cash flow. But this can only be achieved if 

payments are channelled through an intelligent 

payments gateway that provides a single, secure and 

robust route to effective payments management. 

“There is a clear need 

to consolidate payment 

processes, but what is the 

most viable solution?” 

Adrian Stafford-Jones 

Albany Software 

45

focus 

Retail banking 

Meeting new 

expectations 

Rethink how you handle your processes in order to meet the demands of today’s 

customers, say Martijn Hohmann and Bjorn Holmthorsson at Five Degrees Solutions 

There is no better time than now to reassess 

how you run your business. As today’s financial 

markets continue to be redefined, banks need to 

be able to move quickly to adapt to change. Some 

will already have an infrastructure in place that 

supports them to do this, but many will have to 

reassess their whole strategy in order to succeed 

in the future. The reality is, it is the customers and 

not the banks who are now dictating where the 

market goes, and in order to meet new demands, 

the financial services industry must be prepared 

to develop accordingly. 

Customers have more access to information than 

ever before, which has inevitably made them more 

self-directed and, ultimately, more demanding. They 

don’t necessarily want to do everything themselves, 

but they want to have more control. Information 

is theirs to access, at any time and on any device, 

and banks are fast becoming the service providers 

– maintaining the data rather than controlling it. 

For a financial institution this may sound a bit of a 

headache, so why not change your perspective and 

instead see this as an opportunity? 

At the moment, many banks employ staff that are 

doing the work that customers actually prefer to do 

themselves. So, why not please your customers by 

giving them the work they want to do while freeing 

up your staff to focus on more important issues such 

as strengthening customer relationships? A good 

example is opening a savings account. By allowing 

a customer to open the account online himself, 

through an easy user interface with automated 

checks to assure the quality of data, it is possible to 

save a significant amount of staff time. The customer 

will receive an automatic welcome letter and an SMS 

when he makes his first deposit and the process is 

complete. Meanwhile, the call centre has full process 

transparency and can override process steps in the 

event that automatic processing fails. Sounds good. 

So, what capabilities does a bank actually need in 

order to be able to do this successfully? 

Essentially, banks need to make their processes 

much simpler by aligning all disciplines within 

the organisation – marketing, products, IT, risk 

management and compliance, and legal. Today, 

it’s not all about embracing a multi-channel 

strategy; it’s about enabling multi-access and 

complete connectivity. The customer wants to 

access his bank at the time he desires. So rather 

than thinking in channels and keeping processes 

in either the front office or in the back office, 

why not embrace an approach where everything 

is managed together in the mid office? This allows 

the customer to connect to the bank with any 

device of his choosing and allows for complete 

visibility across the whole organisation. 

The mid office should be about integrating 

processes and people from all areas of the 

organisation in order to better engage with customers. 

Until recently, this was almost impossible to achieve, 

especially when trying to pull together many different 

management systems. What banks really need is a 

package that does all that in one go, supporting 

retail, corporate and private banking activities while 

running as a fully integrated front- and mid-office 

solution with standard interfaces to existing core 

banking systems. This package will serve as a basis 

that can be updated and customised as required in 

order to meet changing customer demands. 

Ultimately, if banks want to succeed in the future 

they must consider implementing future-proof 

systems that have the flexibility and scalability to 

easily adapt to change. Embracing a modern solution 

that is designed to actually deliver what legacy core 

banking systems are unable to, without the need to 

actually replace complete systems, offers banks the 

opportunity to exceed customer expectations and 

beat the competition. Don’t get left behind. 

www.onwindows.com

in practice 

SEB wealth management 

One step ahead 

SEB Wealth Management 

Solution: CRM system 

Benefits: Stronger customer relationships, 

short development time, increased agility 

Technologies: Microsoft .NET Framework, 

Dynamics CRM, Silverlight, SQL Server 2008, 

SQL Server 2008 Reporting Services, Visual 

Studio 2008, Windows Server 2008 

Partner: Microsoft 

SEB is one of Europe’s leading banks. For 

over 150 years it has built its success on 

innovative thinking, an international 

presence and strong, long-term 

relationships. SEB Wealth Management is 

a division of the organisation and focuses 

on companies and private customers with 

exacting requirements. Having the ability 

to provide the best service possible is 

crucial to its success. 

“Our customers require a lot more 

attention than most retail banking 

customers,” says Cilla Wahlström, global 

system owner, customer relationship 

management (CRM), for SEB Wealth 

Management. “To serve our customers, we 

need to know them in great depth. They 

expect us to be there for them with the 

information they want and at any time to give 

them the service they need.” 

In 1999, SEB Wealth Management was 

ahead of its time in creating one of the first 

customised CRM systems to help its financial 

advisors gain in-depth customer knowledge. 

Over the years, though, the system became 

nearly impossible to support and, as SEB 

Wealth Management increased the size of its 

advisor community, it could no longer keep 

up with customisation requests from the 

business. Advisors also complained that the 

program looked outdated. “They told us that 

they wanted the interface to have ‘bling’ – 

that’s actually the word they used – meaning 

more graphics and interactivity,” says Henrik 

Ponthan, CRM business specialist at SEB. 

In 2005, the SEB Wealth Management 

office in Luxembourg worked with an outside 

firm to build a new CRM system, but this 

became very expensive. The company was 

just about to close down the project when it 

learned about the Microsoft Dynamics CRM 

solution being used in the Helsinki office. 

In spring 2008, the Luxembourg team 

used the last of its CRM overhaul budget to 

license Microsoft Dynamics CRM. Within 

five months, the team had a new system up 

and running with 50 users. In fact, the pilot 

was so successful that Wahlström convinced 

management to expand the application to 

the whole division. 

“The most attractive things about 

Microsoft Dynamics CRM were its familiar 

www.onwindows.com

“With “Pri the error new quando CRM platform, graecis ne, we aperiam can more sapiente easily 

adapt ex has. to changes In ridens in vivendo the market interpretaris and serve per, more an 

customer ubique segments ceteroscri in wealth aperiam management“ te quando” 

Cilla Wahlström, Gordon SEB Esmond Wealth Freye, Management Microsoft 

programming foundation and its flexibility,” 

says Ponthan. “We could use its extensive 

functionality out of the box, but also 

customise it to support our processes. We 

didn’t need to put a lot of time into creating 

basic CRM functionality; instead, we could 

focus on developing a great interface and 

good connections to our back-end business 

systems. Using the familiar Microsoft .NET 

Framework meant that our developers were 

ready to work with the program with no 

learning curve.” 

Using Microsoft Visual Studio 2008, the 

bank modified the user interface, added new 

security and relationship models, and began 

linking Dynamics CRM with about 40 other 

business systems. SEB Wealth Management 

calls its new CRM system WM360, because 

it gives investment managers and private 

bankers a 360-degree view of their clients. 

Customer data is stored using SQL Server 

2008, and reports are created with SQL Server 

2008 Reporting Services. The application 

runs on the Windows Server 2008 operating 

system and to create the ‘bling’ that advisors 

craved, SEB Wealth Management used the 

Microsoft Silverlight browser plug-in to 

create a highly visual, dynamic interface. 

Today, the Swedish CRM team at SEB 

is spending 75 per cent of its IT budget 

on development and only 25 per cent on 

maintenance. The division can also bring 

new functionality to the business a lot 

faster than it could previously. “With the 

new CRM platform, we can more easily 

adapt to changes in the market and serve 

more customer segments within wealth 

management,” Wahlström says. “We can 

add new functionality to support new areas 

of the business or support our moves into 

new countries. And we can easily meet 

new regulatory requirements. I see endless 

possibilities for WM360. Our flexible CRM 

software will evolve with the business and 

with our customers’ needs.” 

49

in practice 

De Lage Landen 

“Aia Software tuned into our situation and devised the perfect 

solution for us by combining its ITP platform with 

Compart’s DocBridge Mill” 

Eric-Jan Swinkels, De Lage Landen 

In-house efficiency 

and cost savings 

De Lage Landen, a full subsidiary of 

Rabobank, is a global provider of high-end 

financing products through a network of 

branches and cooperatives covering over 

35 countries worldwide. De Lage Landen’s 

programmes help clients boost their 

market share and profitability, and attain 

strategic objectives. 

With financial products becoming 

increasingly complex, offering consistent 

international services is more important 

than ever for a company’s survival. However, 

the company must also be able to provide 

individually tailored services. De Lage 

Landen’s clients often have very specific wishes 

and requirements for their document flow. 

Until recently, De Lage Landen had been 

managing its customers’ demands through 

a combination of in-house and externally 

managed document creation processes. 

With its extensive in-depth knowledge in 

the area of document creation, for the last 

ten years Aia Software had already been 

making an essential contribution to the 

financial institution’s services with its ITP 

Document Platform. Designed to provide 

sophisticated document production services, 

ITP was deployed both in back-office and 

front-office processes within the different 

De Lage Landen business units in Europe. 

Meanwhile, an external party in the US 

managed the processing and printing of the 

company’s documents. 

However, for reasons of cost containment 

and efficiency, De Lage Landen decided to 

bring document management back in house. 

Turning to Aia Software, it wanted to link a 

document creation solution to its enterprise 

resource planning system and the external 

party’s high-end printing equipment in 

order to fully manage both the grouping and 

sorting of documents, as well as templates. 

To meet these requirements, Aia Software 

joined forces with Compart, the supplier 

of DocBridge Mill – an application that 

helps make seamless integration of ITP 

into the existing printing and document 

infrastructure a reality for De Lage Landen. 

DocBridge Mill analyses documents 

generated by ITP and subsequently merges 

them into two or three large PDF files with 

specific codes, which can indicate whether a 

document consists of one or several pages. 

The printer recognises the code and then 

knows which pages can be considered as 

one print job. 

Today, this solution enables De Lage 

Landen to send pre-sorted and pre-grouped 

batches to the external printing company. 

The main advantage is that the company 

now has full control over the management 

of document templates and can make any 

changes directly. This solution therefore 

fully meets its requirements, helping realise 

significant time and cost savings. So far, it 

has only been deployed in the US, but De 

Lage Landen is looking to also start using it 

in Europe in the long term. 

Eric-Jan Swinkels, business liaison at 

De Lage Landen, says: “We had already 

De Lage Landen 

Solution: Total document flow management 

Benefits: Integrated with external printer, full 

control of document templates, significant 

time and cost savings realised 

Technologies: ITP Document Platform, 

DocBridge Mill 

Partner: Aia Software 

had a partnership with Aia Software 

and thanks to its in-depth knowledge of 

document processing, we can create and 

adapt documents quickly and efficiently. 

The current project however goes one step 

further. We turned to Aia Software with a 

rather stiff challenge: total document flow 

management. Aia Software tuned into our 

situation and devised the perfect solution 

for us by combining its ITP platform with 

Compart’s DocBridge Mill.” 

www.onwindows.com

signing out 

PAYMENTS STANDARDS 

Modelling the future 

Microsoft’s Colin Kerr and SWIFT’s Stephen Lindsay look at the importance 

of developing standard models for the evolving payments environment 

As we have already discovered in the Faster 

Payments feature starting on page 26, one 

cannot discuss the topic of payments 

without the subject of standards cropping 

up. Every mature payments market has 

a legacy of payments standards that date 

back to the 1970s; the bulk of which were 

typically developed by national payments 

associations to meet the needs of the local 

banking industry. 

Perhaps the only universal standards applied 

in payments have been those developed 

by SWIFT, the interbank global messaging 

network. Of course, in Europe an important 

goal of the Single European Payments Area 

(SEPA) was to homogenise payment standards 

(resulting in ISO 20022 message definitions) 

in an effort to simplify the exchange of 

payments data across borders. But each of 

these standards has primarily been an enabler 

of communication among industry participants 

– and less so a model for how internal payment 

applications should operate within a bank. 

Payments are complex transactions that 

weave through a bank’s internal systems, often 

across different technology platforms and data 

formats, from delivery channel to clearing and 

settlement mechanisms. As banks re-engineer 

their systems, there is a growing reluctance 

to invest in applications built on proprietary 

‘standards’ because they add complexity to the 

current environment. 

In contrast to this protectionist view of 

formats and architectures, the development 

through collaboration of open standards to 

improve interoperability and reduce costs are 

rightly viewed as an enabler of efficiencies. 

Accordingly, the development of standard 

services and semantic models (as a complement 

to payments formats) is the essence of what the 

Banking Industry Architecture Network (BIAN) 

brings to payments modernisation. 

Starting with a holistic view of banking 

operations, BIAN created an architectural map of 

banking services known as Service Landscapes. 

Additional working groups then model these 

banking services at a deeper level; and so the 

Payments Working Group focuses on the detail 

of the Service Landscape for the payments 

business. Members are drawn from a number 

of different organisations, including banking 

“BIAN has a declared 

principle of not ‘reinventing 

the wheel’ when it comes 

to definitions. It intends to 

help complete the semantic 

model of banking business 

that ISO 20022 represents“ 

software vendors, banks and service providers. 

So far the working group has published 

definitions for two BIAN sub-domains. Payment 

Execution, Clearing and Settlement focuses on 

the services and data required to execute a 

payment, while Payment Agreement describes 

the agreements with customers, and clearing 

and settlement mechanisms – service levels, 

cut-off times and so on – required to route 

payments appropriately. 

The group’s job is made easier by the fact 

that the ISO 20022 standard has already 

formalised many of the semantic definitions 

required to describe the payments business, at 

least for the information that is passed between 

institutions. BIAN has a declared principle of 

not ‘reinventing the wheel’ when it comes to 

definitions. The working group has therefore 

concentrated on defining how ISO 20022 

definitions apply in the context of cooperating 

services within an institution, supplementing 

them as necessary with details related to 

software services and adding new semantic 

definitions for those data elements that are 

outside the current business scope of ISO 

20022 – typically those that describe data that 

is private to the bank, such as customer service 

level agreements. Over time, BIAN’s intention is 

to submit these new semantic definitions back 

to the ISO 20022 dictionary, to help complete 

the semantic model of banking business that 

ISO 20022 represents. 

The work of the Payments Working Group 

is ongoing, and new members are always 

welcome to join and help shape an important 

emerging standard that aims to grow the 

market for standardised software services in 

the payments domain, for the benefit of both 

users and vendors. 

Colin Kerr is the worldwide industry manager 

for payments and core banking at Microsoft, and 

Stephen Lindsay is head of standards automation 

at SWIFT. Both are also heavily involved in BIAN. 

Kerr participates in BIAN through the Marketing 

and Communications working group, and as a 

member of the Strategy Advisory Board, while 

Lindsay is SWIFT’s BIAN representative, working 

on architecture topics. He is also chair of the BIAN 

Payments Working Group. 

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