Generating of Management Accounts in Khanty-Mansiysk Bank

Khanty-Mansiysk Bank is one of the largest regional banks in Russia. The bank is included in the list of 30 leading domestic and 1,000 world banks. The bank structure includes the head office in Khanty-Mansiysk, 18 branches, more than 130 branch offices, representative offices in Prague (Czech Republic) and in Yekaterinburg. About 40 thousand legal entities have become the clients of the bank. In the bank’s branches, about 2.5 million people are served annually, more than 700 thousands of card accounts are opened.

Details about the Client

Project Summary

The development strategy of the Khanty-Mansiysk Bank provides for its transformation into a leading financial organization in Western Siberia and the border regions of Russia and Kazakhstan.

To implement the bank’s strategic objectives, it was required to create a new system of management reporting that meets the requirements of the active growth of the business.

Since early 2009, the formation of the administrative reporting in the Khanty-Mansiysk Bank is provided by the system implemented on the SAP NetWeaver platform. Its core includes a universal data warehouse that consolidates detailed information reflecting the activity of all of its financial accounting centers. The information in the data warehouse comes from the bank’s basic accounting systems located in the head office and its branches, as well as specialized systems providing retail banking and settlement of transactions with bank cards.

As a result of the project, the management of the Khanty-Mansiysk Bank has received an effective tool for comprehensive analysis of the bank’s activities and management decision-making based on complete, timely and reliable data.

Deployed Software

Background

IT-architecture of the bank is of decentralized nature. The autonomous ABS is established in the head office and each bank branch. Before the project, a part of the data from the ABS was transferred to the central office for the formation of a consolidated management reports. Reports on the work of the bank’s branches and offices were prepared by these units themselves. The level of reporting automation was low, the reports were formed by means of Excel, Access and self-design software.

With business growth and development of the branch network, the flow of data required to generate management reports has increased. In this regard, the old reporting methods ceased to satisfy the needs of the bank: reports at the request of the bank’s management were preparing for a long time, the contractors often asked questions about the reliability of data because of errors. All this made it difficult to conduct an objective analysis of the bank’s activities as a whole and its divisions, and prevented the effective business management.

The bank’s management has decided to establish a management reporting system on the industrial platform. The system was assigned with the following tasks:

  • collecting the information needed for the generation of accounting, in a single center;
  • rapid generation of the management reports;
  • providing analysis of the bank’s activities in the context of branches, business units, financial accounting centers, activities, products, etc. with specification to the given customers, accounts, transactions.

At the same time, it was planned that the management reporting system should be the technological basis for the creation of systems of formation of other types of accounts — mandatory, tax, IFRS ones, etc.

Solution

Neoflex recommended establishing a management reporting system on the basis of a universal data warehouse. The data warehouse was tasked to consolidate information on the bank’s activities, coming from the source systems of the head office and branches, as well as providing data for reporting.

The main system functionality provide for ready units, which consolidate Neoflex project experience in the development of reporting systems as follows:

  • data warehouse model that allows to describe the business model of a universal bank;
  • data load unit used to extract data from the source systems, and deliver and load it into the data warehouse;
  • data quality control unit and data enrichment unit, responsible for the quality and completeness of the data warehouse;
  • application datamarts, which consolidate structured information for specific reports;
  • ready report templates.

The technological basis of the system were the SAP NetWeaver platform components: «Business Information Warehouse» (SAP BW), «Business Intelligence» (SAP BI), «Business Planning and Simulation» (SAP BW-BPS).

Course of the project

First of all, the bank’s management needed current and reliable information about the activities of the bank as a whole, therefore, the construction of the management reporting system was initiated «from the top» — from the formation of the complex of the bank reports. For this purpose, data on transactions, accounts, customers, balances, transactions on all structural business units of the bank has been downloaded.

In the next stage of the project, the work was carried out to create detailed reports on specific areas of activity, including those cuts, which the bank had not previously had.

Outcomes

Since February 2009, the administrative reporting generation system in the Khanty-Mansiysk Bank works in commercial operation.

The system provides for:

  • report generation, used for a comprehensive analysis of the bank’s activities: balance sheet statement, profit and loss statement, assets and liabilities efficiency report;
  • report generation, needed to analyze specific activities of the bank: loans, deposits, cash management services, credit cards, interbank loans and currency dealing, economic operations.

As a result of the system establishment, the bank has received significant benefits:

  • an opportunity to carry out centralized analysis of the financial performance of the bank in the context of branches, business units, centers of financial accounting, product, and business lines with subsequent detailing of the data to specific customers, accounts, transactions and accounting entries;
  • the speed of preparation of management reports has increased. The reports are generated according to the data of a single source — the data warehouse;
  • reliability of the data, reflecting the bank’s performance, has increased;
  • business users are now able to independently carry out all the necessary analyzes. The reports are generated according to the methodology implemented on the data warehouse model level, which fully takes into account the specifics of the bank;
  • the bank has received the ability to quickly incorporate new branches in its information space.

Currently, the established system is complemented by a mechanism of allocation of income and expenses. On the basis of a universal data warehouse, developed in the course of the project, the work began on creation of a system for the generation of mandatory reporting of the Central Bank of the Russian Federation. In future, the bank is planning, based on established decision, to build a reporting generation system according to IFRS.

Interview

Vladimir Shmakov
Vladimir Shmakov
Vice-President of Khanty-Mansiysk Bank

How do you find the outputs of the project?

The main result that we have obtained thanks to the project implemented together with Neoflex is the efficiency of formation of management reports and their credibility. Since the introduction of the system in operation, the human factor is level out, which could not make «noise» in the statements. Now we have a current and complete picture of the effectiveness of our activities in the whole bank and all centers of financial accounting in the right sections and with the required details. The decisions are made based on the data that we have full confidence to. Therefore, I might quite literally say that with the advent of a new reporting system, the management of the bank was transferred to a new level.

What's new the system brought in your work?

For me, a very important result was the availability of data stored in the data warehouse. If I get a report where some figures raise questions, with the help of the system I can almost instantly find the answers by myself. For example, I can request to store data on the balance sheet item in any section. Previously, to obtain such information, I had to give instructions to the services and wait for the report to be generated in Excel.

How do you find the work of Neoflex?

Neoflex has become a partner for us, which we, without doubt, entrust projects requiring detailed knowledge of banking and information technology. Such an attitude to Neoflex is based on long experience and a meaningful cooperation in a number of projects. I believe that Neoflex has a very valuable resource represented by its employees, who are reliable and competent experts, with whom we have successfully built a system of management reporting and begun to implement the new stages of the project.
Sergey Grebnev
Sergey Grebnev
Vice President, Chief Information Officer at Khanty-Mansiysk Bank

What were the IT-preconditions of the project?

We needed to create a system that would unite all our branches in a single information space. First of all, it was necessary to solve the problems of centralized management reporting. The partners from Neoflex offered us a solution in which all the necessary for the construction of accounting information is consolidated in a data warehouse, while the delivery of data from ABS, located at branches, is implemented by means of IBM WebSphere MQ.

In what way did you search for the project contractor?

Selection was carried out very carefully, since it was necessary to find not only the right technology solution, but the contractor as well. We looked at several options, studied platform, and held negotiations. As a result, we chose Neoflex. Several factors played a decisive role. Firstly, we arranged a SAP platform, offered by Neoflex for the construction of the system. The second point is that we have already known Neoflex and its team through the work on previous projects. But what is most important — a proven experience of successful similar projects in Russia, which the company has.

How will the system help you implement the bank development plans?

The solution created by the Khanty-Mansiysk Bank together with Neoflex meets the requirement of scalability, which is important for the growing business. The pressing question for the banking sector now is mergers and acquisitions, today we can quickly connect to the new branch system. Even in the course of the project, our bank opened two new branches, which we connected to the system very quickly — somewhat in a week.

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