Localization of Corporate Banking System in BNP Paribas Bank

A financial conglomerate, a European leader in the world banking and financial services market and one of the six strongest banks in the world according to Standard & Poor’s. Together with Société Générale and Crédit Lyonnais, it makes up the «big three» of the French banking market. Headquarters in Paris, London and Geneva.

Details about the Client

Project Summary

  • Implementation of corporate banking system in the Russian subsidiary bank was carried out in a timely manner
  • A parallel accounting record-keeping was organized in accordance with corporate standards of BNP Paribas Group and the requirements of the Central Bank of the Russian Federation
  • Mandatory bank reporting was formed, the Bank’s interaction with the cash processing center is being carried out according to the requirements of the Central Bank of the Russian Federation
  • The implementation of reconciliation procedures was to ensure data reconciliation between the two systems

Services Provided

Deployed Software

Background

One of the most important tasks of IT-department in a present-day bank is deployment of information systems that meet the business needs. This issue which foreign financial companies experience while developing their business in Russia has a number of nuances. Entering the Russian market, foreign banks usually face two problems: they need to organize their work in accordance with corporate standards and, at the same time, to provide for accounting records according to the reporting requirements of the Bank of Russia.

In 2005, the BNP Paribas Group management instructed the IT-department of BNP Paribas Bank to implement a corporate banking system as soon as possible. The information system being created was required to provide for the Bank’s activities in full accordance with the Group’s corporate standards and regulations of banking institutions in Russia.

Solution

Given the need to introduce the corporate system within the shortest possible period of time, the Neoflex consultants offered the following:

  • to implement an approach to the integration of a corporate system without sacrificing the Russian ABS used by the bank
  • to integrate the two accounting systems — corporate and Russian — using the industrial integration platform.

Architecture of the integration solution have being worked out by the Neoflex specialists together with the experts of the Group head office, who came fr om France. Preference was given to WebSphere family products by IBM, which is the world leader in the field of tools for application integration.

Within the architecture being created, the role of the primary operating system has been given to a multimodule corporate banking system, which maintains records of transactions in accordance with IAS standards. The Russian ABS was made responsible for accounting in accordance with the requirements of the Central Bank, conducting of ruble transactions, working with the cash processing center and the formation of mandatory bank reporting in accordance with the requirements of the Bank of Russia.

The integration platform has appeared as an intermediate layer, in which by means of the IBM WebSphere tools the following action items have been implemented:

  • transformation logic of the accounting records under IAS standards in RAS
  • accounts and transactions mapping
  • reconciliation procedures to collate closing account balances of the two systems, thus ensuring the control of the correct synchronization of business processes within the systems.

All operations except for ruble transactions are directly reflected in the corporate system. Information on ruble payments shall be registered in the Russian banking system and be sent to the corporate system on a real-time basis.

Within the corporate system, payment position is being monitored and nostro accounts are being reconciliated.

Complete information on all accounts is transferred on a daily basis from the corporate system in the intermediate layer, wh ere it is converted from the IAS in RAS. The result of the transformation is sent to the Russian Automated Banking System.

Stages

September
2005
November
2005
December
2005
April
2005
June
2006

September 2005

In September 2005, Neoflex started working on the project

To adapt the enterprise system in accordance with the requirements of the Central Bank, a proposal to modify the input procedures for customer, billing information and so on.

November 2005

At the beginning of November 2005, i.e. after two and a half months, the first two interfaces were put into commercial operation interacting between the two systems — the «clients» and «accounts», implemented on the basis of IBM WebSphere Business Integration Server Foundation v 5.0.

December 2005

The development of interfaces of incoming and outgoing payments has been finished

At the same time, the Bank, upon the recommendation of Neoflex, decided to switch to a new product IBM WebSphere ProcessServer v 6.0 — a technology that has significantly increased the speed of solution development.

April 2005

Based on IBM WebSphere ProcessServer v 6.0, the development of all solution’s interfaces was finished — «clients», «accounts» (with different mapping rules between the accounts of the two systems — corporate and Russian ones), «incoming and outgoing payments», «bargains» (IBC, deposits, FoRex, overdraft)

The development of the reconciliation module was also completed. All major business processes of BNP Paribas Bank were transferred from the Russian automated banking system in the corporate system. Employees of the Bank together with the experts of Neoflex proceeded with testing the integration solution.

June 2006

Integration solution successfully put into commercial operation

BNP Paribas Bank switched to conducting operations in a corporate banking system while performing the functions subject to the requirements of the Bank of Russia, by means of the Russian automated banking system. Thanks to the close cooperation between Neoflex and the Bank, as well as Neoflex’s highly qualified experts, the project was completed within the target time frame. The results of the IT-audit conducted by the foreign third-party company by order of BNP Paribas, confirmed the correct choice of integration technologies and high competence of «Neoflex» experts in their implementation.

Outcomes

Business benefits: integration of the corporate system ensured the integration of BNP Paribas Bank in the administrative area of BNP Paribas Group. This allowed the Bank to:

  • build business processes to serve clients of the Bank in accordance with the Group’s corporate standards
  • deploy the Group’s unified global strategy for risk and liquidity management within the BNP Paribas Bank
  • organize the management of the Bank on the basis of common accounting standards and information representation rules adopted in the Group
  • create conditions for the implementation of common policies to optimize cash flow management within the BNP Paribas Group.

IT-benefits: in the course of the project, a scalable integration solution was created with unlimited possibilities of development of IT-infrastructure upon the business demand.

Upon completion of the project, BNP Paribas Group company offered Neoflex to execute integration projects in the two subsidiaries of the group which entered the Russian market, Cetelem and BNP Paribas Vostok LLC.

In the period from December 2006 to August 2007, an integration project was carried out in the Cetelem’s Russian unit, a 100% subsidiary of the BNP Paribas Group, specialized in consumer lending. The project has provided a coherent work of SICLID consumer lending automation system (development of BNP Paribas) and the Russian automated banking system, used for the preparation of the mandatory bank reporting. Project implementation has significantly accelerated Cetelem’s entering the Russian market.

Since December 2006, BNP Paribas Vostok bank has been carrying out a project on the development of solutions for mandatory bank reporting based on the «data warehouse» technology. At present (July 2008), the project is at the completion phase.

Interview

Vladimir Klushkin
Vladimir Klushkin
Head of the IT Department at BNP Paribas Bank

What were the main IT-related conditions for deployment of the integration platform?

Introduction of a corporate banking system required the use of a flexible platform able to solve a wide range of problems while integration of the Bank’s information systems. We needed a platform that would have perfect flexibility and high adaptability. Why did the Bank choose the IBM WebSphere ProcessServer? We have studied in detail the whole range of approaches and proposed solutions, and examined them from the perspective of possible solutions, corporate standards of the Group, project baselines and its price aspects. As a result, it was decided to implement the project on IBM WebSphere ProcessServer as the best technology for our needs.

How do you assess the outputs of the project?

The project has been qualitatively completed as a functioning integration solution. As is shown by the results of operation, this solution is fully consistent both with the Bank’s business and technical requirements.

What is your opinion about Neoflex as a partner?

From the very beginning, our cooperation was based on the principles of mutual understanding, the search for optimal solutions, which would allow successfully implementing the project. Well-coordinated actions taken by the two teams have led to brilliant results. Especially I would like to note that Neoflex uses flexible approaches to complex problem solving and demonstrates a high level of competence required during the introduction of a fast-growing business products and solutions.
Kieran McMahon
Kieran McMahon
Administrative Manager at BNP Paribas Bank

Why did you decide to use integration platform in the Bank's IT-landscape?

We needed an intermediate layer between the two systems. We’ve turned our attention to an integration platform with the intermediary functions between systems peculiar for the software of the given class. Like many other banks, we have a set of interacting applications. Availability of the integration platform allows us to coordinate their interaction.

How do you assess the core results of the project?

The implementation of this project allows us to make available in Russia those banking products which BNP Paribas offers all over the world. Why Neoflex was chosen as an integrator? Our wish was to find a partner with a strong team of experts, who could quickly and professionally respond to our requests. And we have found such partner in Neoflex.

What is your opinion about Neoflex as a partner?

We are very satisfied with the work of Neoflex. Moreover, we have chosen Neoflex to implement our future projects. This is the expert company that has demonstrated a full understanding of what we need and has provided the solution to our problems within deadlines and the budget.

What are your plans for the future use of the integration platform in the Bank's IT-infrastructure?

Creating an integration environment is consistent with our IT-strategy. We plan to centrally automate the interaction between the systems by eliminating manual entry wherever possible. Presence of the integration platform will also allow us to build an efficient system of controlling the Bank’s data flow.

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