Applications and Systems

8/2/2019 Applications and Systems

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Applications and Systems Analysis


2/23

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Target Architecture

The IB Operations Strategy

The IT target applications and systems architecture is driven by the IB Operations Strategy

Revenue generation, control and efficiency improvementsdrive the future IT landscape

To support the Ops Strategy pillars the IT investments requiredto define the architecture have to be prioritised based on:

1. Revenue generation

2. Control3. Efficiency

ClientService

Control &Compliance

ProductivityImprovement

Cost Control

IB Operations Strategy is based on 4 pillars


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Target ArchitectureThe Operations Strategic IT Architecture

Develop common Pre-Settlement functions across asset classes.

Consolidate the settlement processing platforms to the best of breed per asset class.

Create common services for the external connectivity, static data, etc.

Consolidate the cash & position liquidity activities.

Standardize the control functions with intelligent exception handling and process management tools to integrate the process chainacross all the asset classes.

To achieve the revenue generation, the control and efficiency improvements the following principles have to be applied:


4/23

3

Target Architecture

The High-level IT Target Architecture

Bold/Italic: Applications

Static Data

MasterfilesMistral

ops|static

CorporateEventsCAM

ClientConnectivityops|tracker

Trade capture / allocation / enrichment -AE / ClearvisionStructures -Structured Trade Register / TeamWorksDocumentation -TrACE / Saperion / InboundReporting - ARIES

ETDGMI OTC DerivsSummit Flow products(Securities,FX/MM) +

Commodities

Calypso +CATS

LendingACBS

Cash / Liquidity Mgmt -Cash NavigatorPayments -DKIB Payment Service

Banking -Quartz + PB Services

Front-Office

Finance

BPMTeamWorks

ControlGMT

Cross Common Services Process ManagementSettlement Processing

The following diagram shows the potential IT target architecture by the end of 2008:

Cross Asset Services


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StaticDataMasterfiles

Mistralops|static

CorporateEvents

CAM


Trade capture / allocation / enrichment -AE /ClearvisionStructures - StructuredTrade Register /TeamWorksDocumentation -TrACE/Saperion /InboundReporting -ARIES

ETDGMI

OTC DerivsSummit

Flow products(Securities,FX/MM)+

Commodities

Calypso+CATS

LendingACBS

Cash / Liquidity Mgmt - CashNavigatorPayments - DKIB PaymentServiceBanking -Quartz+ PB Services

Front-Office

Finance

BPMTeamWorks

ControlGMT

Target Architecture

Cross Common Services Progress and Next Steps*

Service Progress to Date Main Next Steps

Static Data/Reference Data Ops|static implemented as source of

detailed counterparty Ops|static subscribers extended to cover:

Calypso Sec / Calypso FX / CATS /

Kondor / Fidessa / Martini / RIBS

Bulk of systems now using other strategiccomponents (e.g. Masterfiles / HierarchyManager) some specific exceptions

(POSTS / GMI / RIBS)

Continue extending core static components

Extend usage of ops|static across other flows

Potential project to merge Mistral into ops|static

Migrate maintenance of DKSL counterparty

data to ops|static as part of LCS

Look to leverage ops|static further as a datasource for FBAS / IDE

The IT Ops projects aim to create common services for the external connectivity, static data, and corporate events.

The projects are primarily focussing on improving the static data services.

* more detailed information can be found in the file - Ops IT Strategy Apps landscape V5 4.ppt provided by John Orton


6/23

5


Mistralops|static

CorporateEvents

CAM



ETDGMI

OTC DerivsSummit


Commodities

Calypso+CATS

LendingACBS


Front-Office

Finance

BPMTeamWorks

ControlGMT

Target Architecture

Cross Asset Services

The IT Ops projects related to the cross asset services aim at creating common services by:

Supporting the development of high margin structured transactions business through better management of structured transactions.

Developing a flexible platform to create, distribute, store, and process documents.


7/23

6


Mistralops|static

CorporateEvents

CAM



ETDGMI

OTC DerivsSummit


Commodities

Calypso+CATS

LendingACBS


Front-Office

Finance

BPMTeamWorks

ControlGMT

Target Architecture

Cross Asset Services Progress and Next Steps*

Product Progress to Date Main Next Steps

Structures Delivered Structured Trade Register

Implemented various tools, interfaces and

checks to ensure & improve data quality inthe STR

Established Process Managementplatform and workflows

Established a scalable architecture with

improved control around structures

Enhancements for wider product cover andfunctionality

On-going initiatives to deal with new structuresand improve processes

Make method and technology available for otherinitiatives

Documentation OTC Conf Engine (using Documentum)developed providing document workflowfor complex derivatives confirmation

Transaction Confirmation Engine (TraCE)for document dispatching via SWIFT, fax,mail or print

Saperion (Carsys) electronic archive

integrated to Conf Engine, TraCE andTeamWorks

Inbound suite introduced 2007 to convert

inbound fax / text to structured electronicdata for automated processing. Links toTraCE / Saperion

Complete integration (e.g. further availability ofWeb Services)

Further rollout for document related workflows

and wider coverage of documents in the archive



8/23

7


Mistralops|static

CorporateEvents

CAM



ETDGMI

OTC DerivsSummit


Commodities

Calypso+CATS

LendingACBS


Front-Office

Finance

BPMTeamWorks

ControlGMT

Target Architecture

Settlement Processing Benefits and Disadvantages

Based on the principle of consolidating the settlement processing platforms the following benefits and disadvantages have been indentified:

Benefits:

Overall lower IT cost base only 1 infrastructure to support / 1 vendor to manage.

A single and consistent application framework across business functions allowing greater flexibility of IT development.

Less need for service providers results in a cleaner architecture and in reduced maintenance.

Common skills and knowledge for production applications result in flexibility to move users across functions & asset classes due toa shorter learning curve.

Optimisation of the overhead on standard functions maintaining holiday calendars / static / market data and standard interfaces.

Disadvantages:

Vendor concentration risk.

Interdependencies across business streams and more formality in change.

Increased operational risk in event of failure.


9/23

8


Mistralops|static

CorporateEvents

CAM



ETDGMI

OTC DerivsSummit


Commodities

Calypso+CATS

LendingACBS


Front-Office

Finance

BPMTeamWorks

ControlGMT

Target Architecture

Settlement Processing Interim Solution

To consolidate the settlement processing platforms a 2 step approach has been chosen:

An initial consolidation within each product group is planned. The following architecture is aimed at:

The decommissioning of all the applications and consolidation into Calypso is planned approximately by the end of 2012:

ETD

GMIOTC Derivs

SummitSecurities,FX/MM +

CommoditiesCalypso +

CATS

Lending

ACBS

ETD

Calypso*

OTC Derivs

Calypso

Securities,FX/MM +

Commodities

Calypso

Lending

Calypso*

To reduce the operational risk the transformation of the settlement platform requires a phased approach

1

2

* Most probable evolution


10/23

9


Mistralops|static

CorporateEvents

CAM



ETDGMI

OTC DerivsSummit


Commodities

Calypso+CATS

LendingACBS


Front-Office

Finance

BPMTeamWorks

ControlGMT

Target Architecture

Settlement Processing Main Projects

FX / MM and commodities onto Calypso FX / MM and global rollout in parallel with ANLOS decommission

OTC derivatives onto Summit

European Securities processing onto AE / Calypso Securities / CATS

Complete the migration of EMP business from Ubitrade to Clearvision / GMI and rollout to emerging markets

Consolidation of lending business onto ACBS

Calypso was the strategic choice established in 2002 based on:

The breadth of asset class covered

A more advanced open technology

The vendor relationship.

5 main projects are required to develop the initial parallel consolidation of the settlement processing platforms:1

2


11/23

10


Mistralops|static

CorporateEvents

CAM



ETDGMI

OTC DerivsSummit


Commodities

Calypso+CATS

LendingACBS


Front-Office

Finance

BPMTeamWorks

ControlGMT

Target Architecture

Settlement Processing Progress and Next Steps*

Product Progress to date Main Next Steps

ETD Clearvision / GMI installed in London

Reliance programme completed(Swapclear / Repoclear, clearing strategy)

Decommissioning of legacy Derivate Pool

Completion of migration of remaining DK FFTbusiness onto GMI/Clearvision

Support for US FCM project in NY on GMI

OTC Derivatives Summit installed for interest derivatives2000 to replace Devon 2.34

Extended for Credit Derivatives 2004 andhybrid structures with MUST module 2005

Migration of FX-Derivatives & Equity Derivatives

Decommissioning of legacy infrastructure

Roll out to St. Petersburg/Moscow

FX/MM Calypso installed for FX / MM 2001 2003

Roll out to DrKW Ltd 2005

Roll out to DK Japan Securities 2007

London Calypso Securities Programme: POSTS /RIBS replaced by Calypso

Global Corporate Actions processing solutionbased on CATS/CAM

Lending ACBS deployed in Ldn, NY, Lux 2003

User operations centrlised into

Luxembourg 2006

Focus on standardizing the ACBS processing

Support for the Global SAP pilot project in LX

Support for Secondary Loan Trading



12/23

11


Mistralops|static

CorporateEvents

CAM



ETDGMI

OTC DerivsSummit


Commodities

Calypso+CATS

LendingACBS


Front-Office

Finance

BPMTeamWorks

ControlGMT

The IT Ops projects related to the payment and liquidity management aim to consolidate the cash & position liquidity activities by:

Providing a state of the art Cash (intraday & overnight liquidity) Management solution based on Cash Navigator allowing regional

Operations hubs.

Providing a common payment platform for all DKIB business areas.

To achieve these goals*:

GPP was chosen as the DKIB standard and installed at DrKW Ltd as part the of AIMS decommission and integrated with CashNavigator as part of the London rollout

A further rollout is planned to support Calypso / Summit rollouts, and a tactical use to overcome operational risk in manual payment

processing in selected sites

The ANLOS decommission has chosen a new Banking package Temenos T24 with payment functionality to suite Corporate Bankingrequirements direct debits / mass payments / local clearing / SEPA compliance and International Cash Management support

Target Architecture

Payment & Liquidity Management



13/23

12


Mistralops|static

CorporateEvents

CAM



ETDGMI

OTC DerivsSummit


Commodities

Calypso+CATS

LendingACBS


Front-Office

Finance

BPMTeamWorks

ControlGMT

Target Architecture

Payment & Liquidity Management Progress and Next Steps*

Product Progress to Date Main Next Steps

Cash & Liquidity Management Cash Navigator live in FFT

Roll out to London 3 entities to replace

ANLOS / POSTS / manual processing,integrated with GPP

Global roll out to be prioritized

Payments Global PayPlus (GPP) installed in DrKW

Introduced to other London entities with

Cash Navigator for sweeping and manualpayments

Manual payment processing automatedwith Teamworks process

Rollout with Calypso FX/MM

Alignment with Bridge (Bridge) project to

establish one standard payment and receiptgateway for all DKIB business including CBrequirements (mass payments / SEPA)

One gateway to SWIFT & Clearing systems

Banking Quartz in Ldn 2005 as part of AIMSdecommission

Introduce a new core banking solution TemenosT24 to replace Quartz 2009 and ANLOS



14/23

13


Mistralops|static

CorporateEvents

CAM



ETDGMI

OTC DerivsSummit


Commodities

Calypso+CATS

LendingACBS


Front-Office

Finance

BPMTeamWorks

ControlGMT

Target Architecture

Process Management

The IT Ops projects related to the process management aim to standardise the control functions and to provide an enterprise widesolution for managing manual work arising from non STP process flow.

To achieve these goals*:

The controls process will evolve to a proactive, error avoidance intelligent exception process by creating one single technology

platform based on City Networks Enterprise Reconciliation with a common integrated exception handling based on CityNetworks

Proactive and encompassing intelligent process improvement using TeamWorks business process management.



15/23

14


Mistralops|static

CorporateEvents

CAM



ETDGMI

OTC DerivsSummit


Commodities

Calypso+CATS

LendingACBS


Front-Office

Finance

BPMTeamWorks

ControlGMT

Target Architecture

Process Management Progress and Next Steps*

Process Progress to date Main Next Steps

Controls GRASS deployed to cover mostintersystem reconciliations

GMT platform (CityNetworks EnterpriseReconciliation & Proactive (investigationtool)) chosen as strategic tool andimplemented in London for Cash recs

2007

1st use of GMT for real time paymentmonitoring at Bundesbank clearing

account in conjunction with CashNavigator

Deployment of first case exceptionhandling in Proactive Nov 2007

Consolidate processing on to GMT platform

Business Process Mgt Teamworks selected and live for managingmanual aspects of processing structuredtransactions and manual payments 2006 /

2007

Development of Smart Exception Manager aspart of LCS program

Roll out to other asset classes



16/23

15


Mistralops|static

CorporateEvents

CAM



ETDGMI

OTC DerivsSummit


Commodities

Calypso+CATS

LendingACBS


Front-Office

Finance

BPMTeamWorks

ControlGMT

Target Architecture

Main IT Projects London Cash Securities

Description

Benefits

3 main initiatives:

Develop one single securities platform based on Calypso

Build a prototype Smart Exceptions Management (SEM) model

Develop a Crest self clearing model for FFT and a Clearstream self clearing model for London

Deadline (approx.)

3 main initiatives:

1. April 2009

2. Aug. 2008

3. Oct. 2008

Rationale

Legacy POSTS and RIBS systems are expensive to run and maintain. Consolidation onto the Calypso standard will reduce runningcosts and enable business and operational efficiencies

Total cost reduction will be9.9m p.a. across Capital Markets, Operations and Technology (net of incremental new Calypso sustaining

costs) following delivery of this project

The imperative for cost reduction has been illustrated by Mercer Oliver Wyman, Z/Yen benchmarking and internal IT and Operationsanalysis. This heightens the need for a major reduction in operational and technology costs to which this programme contributes

significantly

Total Cost of Ownership 24,039k EUR Return on investment 200%

NPV 19,768k EUR Payback period 63 months

Source: LCS PMO 11th Dec 2007 v0 1 MI.ppt


17/23

16


Mistralops|static

CorporateEvents

CAM



ETDGMI

OTC DerivsSummit


Commodities

Calypso+CATS

LendingACBS


Front-Office

Finance

BPMTeamWorks

ControlGMT

Description

Target Architecture

Main IT Projects FX/MM Calypso

Benefits

The transfer of FX and MM processing from ANLOS to Calypso, realising operational synergies.

The transfer of FX sell off process from Finance to Front Office, reducing operational risk

Deadline (approx.)

FX: Nov. 2007

MM: Apr. 2008

Rationale

This will provide benefits to both Finance (resolve audit point of moving FX sell-off to Front Office) and Operations (increased control ofthe settlement processes and removal of manual intervention which is an Operational Risk)

Total Cost of Ownership 982k EUR Return on investment 123%

NPV N/A Payback period 24 months

Source: PMO FX MM Calypso 2007-07-10.ppt


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Mistralops|static

CorporateEvents

CAM



ETDGMI

OTC DerivsSummit


Commodities

Calypso+CATS

LendingACBS


Front-Office

Finance

BPMTeamWorks

ControlGMT

Description

Target Architecture

Main IT Projects GMT

Benefits

The implementation is based on the further roll out of the GMT platform

Roll out further Cash Rec investigation processes in London

Implement and roll out Interest Claims New World, a globally consistent interest claims processcovering all relevant business areas in London and Frankfurt

Replacement of SkonIT in FFT for the investigation and reporting of stock and cash breaks

Develop new EMP intersystem reconciliations and related investigation workflows

Deadline (approx.)

June 2008

Sep. 2008

Dec. 2008

Dec. 2008

Rationale

Increase control and operational risk

Reduce operational costs

Implement streamlined and transparent processes

Alignment with GMT strategy platform

Total Cost of Ownership 1,236k EUR Return on investment 315%

NPV 3,158k EUR Payback period 12 months

Source: GMT Europe Dresdner Kleinwort PMO Project presentation 20071129 review.ppt


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Mistralops|static

CorporateEvents

CAM



ETDGMI

OTC DerivsSummit


Commodities

Calypso+CATS

LendingACBS


Front-Office

Finance

BPMTeamWorks

ControlGMT

Target Architecture

Main IT Projects OTC Equities Processing into Summit

Description

Benefits

Replace Murex Equity and the supporting infrastructure by using the existing Summit system (usedfor the processing of OTC IRD, OTC FX Options and Credit Derivatives) to process OTC Equity

Derivatives. It is planned to integrate the processing of OTC Derivatives into one team in FFT.

Deadline (approx.)

Rationale

Support the settlement process for the changed trading profile, risk reduction, fulfil internal and external regulatory requirements,robust platform, greater flexibility towards future challenges in volume and complexity. Without this investment the volume andcomplexity growth planned by the business cannot be supported.

Total Cost of Ownership 4,073 k EUR Return on investment 188 %

NPV 6,004 k EUR Payback period 25 months

Source: Dresdner Kleinwort PMO Project presentation Equities V1 7.ppt


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The Baseline 2

The Projects 14

The Priorities 23

The Target Architecture 28

The Next Steps 43

Appendix 45

Content

Section Slide


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The Next Steps

Detail the major projects

Provide updated figures on savings and investments


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Appendix


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The Ops Processes

Top Down Processes

Trading

Enhancement of Trade Capture

Confirmation & Documentation

Settlment & Payments

Brokerage, DRE, Other payments & Billing

Positions

Key Events Management

Collateral Management

Position Management

Cash Management

Margining

End of Lifecycle

Expiry

Unwinding / Sale

Management

Continuous Improvement

Management Information & Reporting

Support

Reference Data

Reconciliation

Investigation

Claims Customer Support

Risk Analysis, Compliance, Audit Confirms

The following processes have been defined during the Top Down approach:

Documents

Applications and Systems