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Articles Archive
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July/August 2004
Nationwide Revitalizes With STP
By the year 2000, Nationwide Building Society had outgrown its critical treasury front-, middle-, and back-office software systems. "We had been using a system that had been installed in the early 1990s which was very much past its 'sell-by' date," says Kevin Bernbaum, the Society's head of treasury control. "Its functions could no longer cope with the processing and reporting complexity that our business growth demanded".
Nationwide's Group Treasury administrative center in Northampton manages cash, interest rate, and liquidity risk. It is a major investor and issuer in the wholesale funding, money, and capital markets. The Treasury team administers functions ranging from dealing, tax planning, and risk management to finance and operations.
Nationwide sought a system that would further strengthen its risk management, valuation, and processing of complicated instruments. Additionally, it wanted to streamline data management. Nationwide has a large bond portfolio, but its software limited its ability to price some of its trades and options. It also needed a better system for monitoring risk and controlling payments.
Nationwide's managers decided to upgrade to a STP environment. Consultants found that single-package software solutions were available from several vendors. Bernbaum says: "The attractiveness of OpenLink partly was its off-the-shelf functionality in combination with the personalized support that a slightly smaller company could provide. And Findur was genuinely believed to be a better product than the others, especially its back- and middle-office functionality which we were particularly keen to upgrade. Another key advantage was the option to configure Findur to meet Nationwide's specific requirements."
Overcoming implementation challenges
OpenLink is a global provider of trading, risk management, and operations software. The company's Adaptive, Dynamic and Integration enabling (ADI) Framework-based solutions support the most rigorous business requirements for evaluating, capturing, processing, and reporting on interest rate derivatives, fixed income, foreign exchange, money markets, equity, and commodity markets transactions.
Findur, OpenLink's financial market solution, links an organization's front- through back-office processes and provides real-time updates, a robust management of both market and credit risk, the automation of processing tasks, and a sophisticated set of reporting tools. It delivers a detailed view of what happens and when it happens throughout a trade's life cycle, streamlines an organization's operations, and reduces costs.
Martin Taylor, OpenLink's relationship manager for the Nationwide account, says that the installation of Findur began in January 2001. "The first phase began with the general configuration of the database, and included transaction types such as loans, deposits, and gilts. The bulk of these transactions all related to the Nationwide Life business. This all went very smoothly." In December 2001, the second phase of the implementation began. This involved moving all of Nationwide's Treasury business to the Findur platform.
Taylor says: "We expected this to be a challenge because it involved every type of trade that Nationwide had within its legacy system. Plus, we were adding enhancements to fit Nationwide's business needs, all of which had to be tested." An OpenLink representative was based at Nationwide's Northampton offices during volume testing to solve any problems on the spot.
Taylor says both companies wisely made adequate management and business resources available at key stages of the implementation. In April 2003, Nationwide switched off the legacy system and went live with Findur.
Findur adapted to Nationwide's needs
Both organizations have seen improvements in Nationwide's operations. Taylor says: "Nationwide was impressed with our rule-based and exception-focused STP framework. Furthermore, they liked our cross-asset-class integrated risk management capabilities, covering both market and credit risk." He adds that Findur's simulation engine allows Nationwide to value portfolios or individual trades in real-time, and that they can run "what if" scenarios to determine how market movements would affect their trades.
Subsequently, Nationwide had OpenLink develop additional functionality for bond trading, loan rollovers, and asset-backed securities. From the accounting staff's point of view, the data regarding the organization's profits, assets, and liabilities is much more accessible. And in an increasingly regulated world, Findur's Accounting Manager provides Nationwide with the ability to post and report on all of their trading activities, risk measurement, and bookkeeping controls.
Taylor says Findur's key advantage over some competing products is that its development tools allow clients to customize the solution's core functionality.
Bernbaum says: "OpenLink's Findur system has worked fantastically. We have full user acceptance, and we work a lot more effectively and efficiently. We also have access to management information that we never previously had [...]." As a final thought he adds: "We obviously are very pleased with Findur, and our relationship with OpenLink has grown stronger since the go-live date. Overall, we're pleased with what we bought. Findur delivers exactly what we thought we were getting."
As seen in Informa's Back Office Focus - July/August 2004
Copyright © 2004 Informa UK Ltd. All rights reserved.
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