Order from chaos
With layers of legacy systems and applications, huge transaction volumes, industry
consolidation and a wave of new regulations pressing for greater transparency,
banks are looking for solutions that will bring simplicity from complexity. Thanks to
systems vendor Microgen, they may not have to look far, says CO David Sherriff.
The banking industry is changing rapidly,
not only because regulators press for
stricter control and more transparency
but also because banks are changing through
mergers and acquisitions. The need for a
solution to quickly and accurately map high
volumes of transactions into accounting
systems has never been greater.
In the past, such systems have been
hampered by speed constraints, but no longer.
‘The demand from investment and retail
banks is for very high volumes of transaction
processing,’ says David Sherriff, COO of
Microgen, an established software, solutions
and consultancy services company. ‘For one
leading competitor’s extreme transaction
processing the benchmark was 5,000
transactions per second and we are doing
30,000. There is nothing faster on the market.’
Microgen implements bespoke
applications, product software and multichannel
billing solutions for the world’s
largest financial institutions, multinationals
and public sector organisations. The
company’s proprietary Microgen Aptitude
technology is behind solutions such as
Microgen Accounting Hub (MAH).
‘That division of the company began in 2002
with the purchase of OS T and its product
OS T Business Rules (OS TBR) – a rules-based
integration product sold mainly to investment
banks. It enabled them to achieve accounting
consistency in front-office trades by creating
“golden rules” around transactions and to feed
that information into the general ledger and
the balance sheet,’ explains Sherriff.
After the purchase, however, Microgen
realised the system needed a radical overhaul
to meet the needs of today’s banks.
‘The product began to struggle on the
volume of transactions it could handle. So, we
chose to completely rewrite the software,
keeping what was best about it but looking
at a new architecture to capture more
volume. We added capability around business
process management (BPM), business activity
monitoring and simulation. We strengthened
the integration capability with different source
and target systems, and built it on serviceoriented
architecture,’ says Sherriff.
The result was business process
management suite Microgen Aptitude. While
OSTBR could process up to 10 million
transactions per hour, Aptitude began at
100 million.
Hub of activity
While most BPM solutions came from
workflow experts, Microgen’s strength lies in
data integration, meaning MA H is suited to
complex environments. The software, which
is popular among investment banks, is now
capturing the imagination of retail banks.
MAH creates a single point of control
to improve consistency and auditability. It
consolidates accounting for multiple levels
and types of complex product in one place.
‘Our opportunities come out of the current
climate in the market. We target a global
market, which suits banks, many of which have
grown through the acquisition and/or rapid
take-to-market of new product lines, very
often developing siloed financial systems to
support those. Often they have focused on
the front office rather than the middle or back
office, and they sit in multiple jurisdictions with
multiple accounting rules,’ says Sherriff.
‘The old legacy systems that support
them are hard to change, so the primary
challenge is putting in place a process and
system to give a uniform view of every single
transaction they do, regardless of product
type, system or jurisdiction.’
MA H hooks into each financial source
system a bank has. Its standard set of
accounting rules covers every possible
product line but can be modified if needed.
The system captures business events, then
posts the output to general ledger, balance
sheet and data warehouse systems.
‘It allows banks to standardise trading and
accounting, in the knowledge that all trade
events are posted in an accurate and uniform
way into the general ledger. It gives them the
ability to very quickly take new products to
market by generating the right accounting
rules,’ says Sherriff.
‘They can also generate a sub-ledger,
which enables flexible repor ting around
product lines or geographies. This system
sits within any core banking environment
and gives investment and retail banks the
accuracy and agility they need.’ |
