Organization of Mandatory Reporting in Rusfinance Bank

Rusfinance Bank is one of the leaders in consumer credit market in Russia. The Bank operates in the following areas: automobile loan financing, crediting in the sales points, issuing the credit cards. Rusfinance Bank is incorporated in the Rusfinance Group represented in 68 regions of Russia — from Kaliningrad to Vladivostok.

Rusfinance Group belongs to the Société Générale Group, one of the largest financial groups in the euro zone. Société Générale has 151 thousand employees worldwide, operating in three key business areas: retail banking and financial services, investment management, corporate and investment banking services.

Details about the Client

Project Summary

Rusfinance Bank is the first bank in Russia where a specialized data warehouse is created to prepare the mandatory bank reporting. The data warehouse is implemented on Oracle data base management system using a commercial ETL-tool Informatica Power Center.

Data in the data warehouse are consolidated on a daily basis from seven Bank’s information systems: CardSuite, Evolan, Diasoft 5NT (Sybase), Diasoft 5NT (MSSQL), R-Style, 3CardR, Equation.

Based on the warehouse data, the following forms of mandatory reporting are prepared: 115, 118, 125, 128, 135, 302 and others.

The most important result of the Rusfinance Bank project was the preparation of mandatory bank reporting from transactional systems of the bank and reduction of its preparation time.

Services Provided

Deployed Software

Objectives of the project

At the start of the project, its goals have been expanded. The contractor was set a goal to create an external reporting system on the basis of a «data storage» technology, which will allow the Bank to solve the following tasks:

  • to automate the preparation of reports, defined by the requirements of the Central Bank of the Russian Federation, as well as the needs of the Bank’s internal divisions in charge of credit and deposit transactions with individuals
  • to reduce the burden on the main Bank’s information systems and simplify the mechanism for obtaining and developing new reporting forms
  • to reduce the amount of data being loaded into the main ABS for the use of the mechanism of collective postings
  • to unify the Bank’s customer base, to implement an engine to search and eliminate the customer duplicates therein.

Background

Rusfinance Bank (the Bank) has begun to work at the Russian market in 2004. Initially, the preparation of mandatory bank reporting was conducted as part of the main Bank’s ABS — Diasoft 5NT system. However, after the purchase of Promek Bank (Samara) in 2005, and then in 2006, SKT Bank (Moscow), the number of applications that make up the bank’s IT-infrastructure has doubled.

At the same time, the volume of transactions was growing, and efficiency of data transfer and analysis was decreasing. There was an urgent need to withdraw the reporting from the Bank’s transaction systems. It was decided to create a specialized store, according to which will form the mandatory bank reporting.

Solution

Work on the project, which was completed within 10 months, began in summer 2006. The Neoflex specialists suggested using the Informatica Power Center system as an ETL-tool for the implementation of data discharge, transformation, cleaning and loading procedures. This proposal was approved by the Bank’s parent company, because this system — one of the leading ETL-platform in the market — is one of the standard tools of the Société Générale group.

In the course of the project, the Neoflex experts:

  • have designed the structure of the warehouse data
  • have implemented data loading, purification and conversion procedures
  • have downloaded historical data in the data warehouse
  • have optimized data warehouse for high-speed report preparation. For example, the Provisions for Possible Losses report, which contains more than 40 indicators, is formed over the entire volume of existing loans in the context of each transaction in less than a minute
  • have developed a three-tier data quality control system
  • have developed Single Client and Reserve Calculation application modules.

The reference data is uploaded to the Single Client module database by customers of all the Bank’s systems. The module designation is aimed at their reconciliation and formation of the unique customer reference data.

The presence of this directory is the guarantor of the proper extraction of business information from the warehouse when generating datamarts.

The Reserve Calculation module makes it possible to calculate the daily allowance for each credit agreement in accordance with the requirements of Russian legislation. This data is then transmitted to the accounting system and recorded in the Ledger, and then discharged into the data warehouse.

Outcomes

Data implemented on the Oracle data base management system are consolidated on a daily basis from seven Bank’s information systems: CardSuite, Evolan, Diasoft 5NT (Sybase), Diasoft 5NT (MSSQL), R-Style, 3CardR, Equation.

The warehouse data serve as the basis for:

  • statutory reports of the Central Bank, including forms 115, 118, 125, 128, 118, 155, 250, 302. The reports are of the regulated type and can be presented in formats required for their loading of the program in the Bank of Russia;
  • the reports being prepared for the reconciliation of the Central Bank reports: Loan Portfolio, List of Reverse Postings, List of Insiders, Provisions for Losses on Loans, etc.;
  • the reports necessary for the reconciliation of the client base: Duplicates from a Single Source, Errors in the Clients' Personal Data, Clients with Incorrect Addresses, etc.;
  • additional reports produced, in particular, for the control of the Bank’s operations: Consolidated Quality Control of Data Downloaded for the Period, Report on the Data Reconciliation, Statement of Personal Accounts, Customer Data Sheet, Turnover Balance Sheet and others.

The Bank has achieved the following results

  • the time of reporting preparation has significantly reduced;
  • the reliability of accounting data and the transparency of their formation has been ensured;
  • the load on the Bank’s existing accounting ABS has been reduced;
  • the complexity of deploying new applications has been reduced: for the mandatory reporting generation to reflect the new application data, it is only required to connect it to the data warehouse.

Interview

Oleg Podkopaev
Oleg Podkopaev
Director of IT Department at Rusfinance Bank (Société Générale)

As a general rule, mandatory reporting, including those in foreign banks operating in the territory of the Russian Federation, is prepared according to the Russian banking system. What caused the decision to form it according to the data warehouse?

If the transactional system, in addition to its main task, performs the functions of preparation and storage of reports, then with the growth of the volume of transactions, it, as the saying goes, begins to «freeze up». This happens because the system performs functions not provided by its architecture.

In small and medium-sized banks, there is no threat of transactional systems freezing up. But big banks are now trying to divide the transaction systems and data warehouse for the report generation. Not everyone are headed in this direction, some are trying to simply scale their accounting system by adding more processing capacity. But this direction has its limit, and it is impossible to constantly increase the system — diverse tasks will still interfere.

By what criteria was Neoflex selected for the project?

We started working with Neoflex in 2005, by inviting it for an external RUBIS project management. Within the framework of this project, we have implemented Diasoft 5NT system at the same time, a system for the back-office accounting credit Evolan — internal «Societe Generale» Group tool, as well as the Credilogic loan issuance management system. It should be noted that the project was carried out after considerable delay, we were a young team, and needed additional resources. Therefore, at a certain stage of the project, it was decided to invite a third-party team for its management.

There were five people working for Neoflex in the project. They were leading the project and provided advice on the organization of work of the project office and assignment of tasks. As a result, the project was successfully completed. Thanks to the Neoflex team, we made up for all the time just for six months and completed the project with a delay of only one week! For the project of this level — there were about 80 people involved from the development companies Diasoft 5NT, Evolan and Credilogic — this is an excellent result. Cooperation in this project has shown us the company possibilities. The budget for the project on mandatory reporting was reasonable. This determined the choice.

What is unique about this project?

First and foremost, it is worth noting that together with Neoflex we have created Russia’s first data warehouse for mandatory reporting generation. Construction of data warehouse makes us free in the implementation of almost any accounting banking system, since we are becoming independent of the specific implementation of business processes.

Do you think the bank is able to realize such a project on its own?

Based on the experience of working with Neoflex, I can say that if we had to do the project by ourselves, it would have lasted until now and may be delayed for another year or two. Everyone must do their job. The Bank’s IT-department focuses mainly on maintaining the performance of existing systems. To make the project efficiently and on time, it is necessary to invite experts with experience. Neoflex has already implemented many complex projects. Our organization has a clear tendering process, and we never take the company, which «sits closer». What we liked Neoflex for? Firstly, the company has already known our business. Secondly, its experts had competencies that we needed; they already had experience of building data warehouses. We have already known the potential of the team; its specialists have authority in the marketplace.

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