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Banking software solutions

www.tks-teknosoft.com

The challenges of the new millennium

Whilst the banking sector are completing their restructuring, the banking software suppliers are facing a tremendous demand for new systems. The pace of globalisation, the intense competition and the consequences of the Euro are two of the many factors that have contributed to this rapid change in technology. The clients' needs, the products and the markets are moving. The successful players in banking are more and more focusing on revenue growth and productivity enhancements in each key area. To win in this challenging market, information technology is ranked as one of the greatest enabler.

A global market
The major suppliers of banking systems have always dealt with the demand of international customers. However during the 90s the implementations have mainly taken place locally, country by country, with systems poorly inter-connected. The analysis of the customer base of large banking systems suppliers, reveals that only a few banks have installed their solution globally. These are facts, this is no more the trend. Today, banks are thinking global. By global it is meant that a banking software solution should answer the needs of a global business, across borders and legal units. The capabilities of the software architecture to process the 'multi- structures' (accounts, currencies, languages, and entities to name a few) is a must.

The most recent integrated software packages pay particular attention to the capabilities of the back-offices functions. Globalisation pushes forward the emerging needs for universal back-office systems that are able to process the new products, the services and the new delivery/information channels implemented each day by the banks. This was the major concern when TKS/TCS designed QUARTZ, a new integrated banking software package. This solution meets the business demands of national and international banks and financial institutions as we begin the new millennium. A sophisticated back-office operation is the true "backbone" of any banking operation and must have all of the following attributes.

Flexibility
An integrated back-office system should be streamlined and efficient, with the flexibility to customise and automate many back-office processes. The various back-office modules should deal with a variety of transactions on several financial instrument types and in various market places. All back-office processes are automated on the system to enable high quality and productive business transactions in a cost-effective manner.

Straight Through Processing
Trades from any front-office application are automatically sent to the back-office module for confirmation generation, settlement, and accounting. The back-office generates and transmits confirmations according to user defined parameters, including SWIFT, paperless through fax, telex, or paper for regular mail.

Support
High Volume Operations In order to effectively support high volume trading operations, the system has to provide the flexibility to automate various back-office processes, such as trade acceptance, confirmations, and netting payments. Operations staff can set parameters to run specific processes at pre-defined intervals, or to manually launch each process.

Netting Capabilities
This allows users to consolidate and approve money transfers for outgoing as well as for incoming funds. It also allows users to assign an unlimited number of payments/receipts to be "netted" against each other and subsequently generate a single payment order or notice to receipt. All necessary entries can then be passed to respective nostro accounts and general ledger.

Cash Management
The application tracks cash flows in and out of user-defined nostro/vostro accounts for currencies and commodities, and forecasts account balances at any future date. Profit and loss calculations can be performed on nostro positions. The application generates receipt and delivery instructions for each nostro account according to the settlement instructions. Similar to the transaction confirmations, the receipt and delivery instructions may be printed for later faxing or mailing.

Front-office and portfolio management - priority areas for revenue gains
The most efficient way to get closer to clients, both existing and new, is through a greater emphasis on a deeper understanding of changing client needs and expectations. The new information system is expected to enable the bank to implement differentiation factors and take steps to deliver this differentiation. To concentrate in particular on service quality and investment performance, the banks need advanced front-office systems. These systems are expected to be implemented rapidly and to cater with the latest technologies. The delivery of the information and the services through the Net networks (Intranet, Extranet, Internet) are the strategic weapons of tomorrow. Similarly the client should be able to access this information from any device, including PCs, Palm pilots or even portable phones.

The front-office part of the system provides the latest market information and positions for analysis and actions. It provides full control over the initiated orders and trades and constant access to accurate information regarding order flow and status at any time of the day. Portfolio managers, credit officers, market traders and dealers acting in the financial markets are supported by all the front-office modules. With OpenFramework, a 100% Java based development and deployment environment, the bank can easily deploy complete front-office solutions to help clients, significantly increase sales, marketing, and customer service effectiveness.

Flexible Work Flow
Each portfolio manager and trading desk or user can uniquely define the steps and the reporting necessary to complete their job. The system breaks order management work-flow down into any combination of elementary. An order execution is driven by the data and the events that occur, not by a rigid set of prescribed steps. One can enter the steps of the work-flow as information becomes available. For example, a bond trade may be completed in one step, as the trader receives confirmation of the price and amount of purchase immediately upon phoning in the order; while an equity trade may be completed in multiple steps due to various fill amounts at different execution prices.

Comprehensive Functionality
The results of an investment management operation are determined by the traders and the portfolio managers. Those results are influenced by the systems they use. 'Quartz' provides traders, portfolio managers, and operations managers with the competitive advantage they need to effectively run their investment operations. it also provides depth of functionality across equities, fixed income, repurchase agreements, forward currency contracts, options, and futures, all in a complete multi-currency environment.

Real-time Information
The system accepts continuous price feeds so that intra-day positions and profit and loss statements can be viewed automatically, any time.

Embedded communication: the ultimate differentiation of banking systems
Banks must be in close and secure contact with the outside world. For that reason, banking software solutions should be able to produce and receive all kinds of messages and data, using common or specific interbank communication networks or services. Embedded communication with clients is becoming a key phrase.

Interbank gateway
Through a tight integration with interbank gateways provided by communication software suppliers, Quartz is able to connect to several interbank services, locally and internationally. In Switzerland the interface includes the SECOM securities clearing and settlement system, the SIC currency transfer system and the electronic stock exchange settlement (SWX) system. Internationally, the system manages information to route messages through to other services such as SWIFT, EUROCLEAR and SIS/INTERSETTLE.

 

 

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