Dresdner Kleinwort rolls out automated platform worldwide
One of the world’s largest investment banks has taken the first step towards replacing its back-office accounting infrastructure with an automated global system.
With big savings to be made through automated accounting, analysts say multinational companies in other sectors will look to follow Dresdner Kleinwort’s lead.
The bank has begun the roll-out of the reporting system with a single product line. All trades in corporate debt made from its New York office are being fed into the new sub-ledger system, with other lines set to follow.
Trading data from locations including Frankfurt and London will follow within a year. The bank, which trades in six countries, aims to have all its trading areas on the system by the end of 2007.
Peter Redshaw, research director for investment services at analyst firm Gartner, said, “Companies tend to consolidate across one product line or they only do it across the front office. It is ambitious to do it for all products and all locations globally in such a short timeframe.”
The bank’s global head of finance technology, Mark Harrison, said the project was aimed at eliminating non-value-added work and creating flexibility within the finance department. But he did not specify whether it would lead to staff being redeployed or laid off.
The sub-ledger will automatically present accounts to meet region-specific auditing and compliance standards. It will also replace manual processes in back-office settlement systems that are carried out by staff using basic productivity tools.
Dresdner Kleinwort’s plans for a global back-office reporting process were first considered in 2003 when it successfully trialled a prototype process for its London business. The process used an accounting engine to automatically add accounting standards to the trading information generated by the bank’s settlement systems.
The board signed off the global roll-out in 2004. The IT department changed some of the technology for the implementation after learning the lessons of the London project.
Harrison settled on an Ilog-supplied accounting engine because it offered greater processing speed than the product used in the London trial and it also had an industry standard Java interface.
The bank’s IT department also developed a Java-based “standardisation layer” to remove region-specific information from the trading data in the settlement systems. In the London prototype, it had relied on the accounting engine to perform that role.
Harrison said, “Doing everything in the accounting engine was not as clean as separating out the process into different layers because then we could specify, build and test in different layers.”
Chris Skinner, associate director at analyst firm TowerGroup, said Dresdner Kleinwort would be followed by other banks and multinationals in moving to consolidate on one accounting platform globally, because of the savings generated.