Financial services firm Rabobank International has developed an application to help it meet regulatory and reporting...
The Accounting Entry Generator (AEG) applies standardised business rules to customer contract data when they are sent from back-office systems to the central accounting systems.
The introduction of the system is a critical step in a nine-year project to make it easier to meet regulatory requirements.
Rabobank, which has about nine million customers, provides services such as international retail banking, wholesale banking and asset management, as well as insurance. It specialises in providing services to global food and agriculture sector and has 56,000 employees worldwide with 5000 of these working in IT.
The company needed centralised control and standardise biusiness rules because it has thousands of different back-office systems sending data to an Oracle/PeopleSoft Financials system. The AEG gets data from the back-office systems when a new deal is made or a change is made to an existing deal, such as when a new loan is created or becomes mature. It then creates an entry in the accounting system. The AEG specifies how it wants to see the information appear in the accounting system.
Peter Onvlee, head of information systems and development finance IT at Rabobank, said increasing regulatory and reporting requirements, such as the International Financial Reporting Standards and Sarbanes Oxley, meant standardisation and centralisation of data was essential to a global firm offering a wide range of financial services.
Onvlee said Rabobank is using Aptitude business process automation software from Microgen as a toolbox for putting business rules into in-house systems.
"The advantages of this approach are that the same product is always booked the same way in the accopunting system according to our standards, regardless of the back office the product resides and all products are treated the same way regardless in which region the trade has been done," said Onvlee.
When a new business rule is introduced, often driven by regulatory change, the company had to re-write all back-office systems individually to ensure they complied. The bank now makes changes centrally, which can be applied to all regions and product groups required through the AEG. "If we had not done this every change has to be embedded locally and you cannot make changes from a central location," said Onvlee.
The development of the AEG is an essential implementation before the company starts work on a central data warehouse as part of a project to centralise its global data management across 25 countries and multiple product groups. To develop a different version of its AEG for each product system takes about three weeks, said Onvlee.