Customer Solution Case Study
/ Automated Reconciliation Solution Helps Bank to Double Online Transactions
Overview
Country or Region: Denmark
Industry: Financial services
Customer Profile
Headquartered in Copenhagen, Saxo Bank is an online trading and investment specialist with offices in Europe, the Middle East, and Asia-Pacific. Its SaxoTrader platforms are available in more than 20 languages.
Business Situation
Saxo Bank needed an automated reconciliations solution to decrease operational risk and increase its ability to manage high volumes of financial transactions.
Solution
Working with SunGard, Saxo Bank deployed IntelliMatch Operational Control. It consolidates data, automatically matching transactions and highlighting discrepancies.
Benefits
· Reduces financial risk
· Meets compliance requirements
· Supports high transactional volumes
· Increases operational efficiency
/ “We knew that we wanted to scale up our online business, but we needed to match this with more effective operational risk controls. Errors in trade processing can result in financial loss for the bank.”
Karina Deacon, Chief Financial Officer, Saxo Bank
Saxo Bank, a specialist in trading and investment, wanted to automate complex reconciliation processes to strengthen its ability to monitor and manage operational risk. The bank evaluated several products on the market, after which it chose to deploy the SunGard IntelliMatch Operational Control solution. It runs on Microsoft SQL Server data management software and the Windows Server 2008 operating system, matching internal and external data sources with the bank’s financial systems. Since deploying the SunGard solution, Saxo Bank has boosted its position in the investment market, doubling daily transactions and increasing revenues. In addition, it has decreased financial risk for itself and its customers, and ensured compliance with today’s regulatory requirements.
Situation
In 2001, Copenhagen-based Saxo Bank officially gained European bank status. Since then, a focus on client services, competitive pricing, and innovation in technology has helped it become a leading player in the online financial trading industry. Over the years, the bank has gained industry recognition for its online trading platforms and multiproduct offerings. Most notably, two of the bank’s founders received the coveted Achievement Award 2007 from FX Week—a newsletter for foreign exchange and money market professionals—for their outstanding contribution and strong commitment to the success of the electronic foreign exchange industry. Saxo Bank employs around 900 people in Europe, the Middle East, and Asia-Pacific.
In 2006, a small team managed daily reconciliations manually. But Saxo Bank wanted to automate the reconciliations process to decrease operational risk and increase the volume of transactions the bank was able to process.
Karina Deacon, Chief Financial Officer, Saxo Bank, says: “Processing speed and accuracy are crucial in matching and reconciling transactions. We need to detect discrepancies quickly to protect our business and clients from financial risk. We used to employ six people to match positions, cash, and trades, but it took them hours of overtime to ensure this was done correctly. Finding a discrepancy was like looking for a needle in a haystack. It could take days to locate it and the situation posed a risk to our company and our clients.”
Saxo Bank needed to change the way it reconciled end-of-day trading before it expanded its portfolio of online products and services. Deacon says: “We knew that we wanted to scale up our online business, but we needed to match this with more effective operational risk controls. Errors in trade processing can result in financial loss for the bank, client mistrust, and regulatory sanctions.”
Solution
Executives from the bank attended the annual Sibos conference held in Copenhagen. They met with Microsoft Gold Certified Partner SunGard, a leading software and services provider that focuses on solutions for the finance, government, and higher education sectors. IntelliMatch Operational Control proved to be the perfect fit for the bank’s new business requirements. Jennifer Hanes, Chief Operating Officer for the SunGard IntelliMatch Operational Control business, says: “We designed IntelliMatch Operational Control—and all our products—with the rationale that they need to be deployed quickly. Time to market for customers is our key goal. All our products are flexible, scalable, and easy-to-use for both non-IT and IT professionals.”
IntelliMatch Operational Control runs on Microsoft technologies, including Microsoft SQL Server data management software and the Windows Server 2003 operating system. The solution provides a real-time matching and reconciliation platform on which Saxo Bank can consolidate its reconciliation operations. The highly scalable solution reconciles all transactions from external applications and counter parties with data from Saxo Bank line-of-business applications. It uses a rules-based engine to highlight discrepancies automatically.
“The reconciliation process is automated to the point that our employees now only manage exceptions,” says Deacon. Business analysts and managers can use a dashboard to view information on specific trading areas, and risk or performance indicators.
Deacon says: “Initially we planned to use IntelliMatch Operational Control for cash reconciliations. But we soon realised that the solution could also manage all our asset classes and transactions, including cash, derivatives, confirmations and futures, and options. By automating the reconciliation process and providing a comprehensive audit trail, we’re helping to ensure that the business complies with the high standards of transparency and accuracy required by our clients and the regulator.”
Saxo Bank has taken advantage of the solution’s flexibility and scalability. Now, all the trading platforms at the bank—SaxoWebTrader, SaxoTrader, SaxoMobileTrader, and Euro Trader—are linked, and IntelliMatch Operational Control manages all trading conducted on a Saxo Bank product.
Benefits
The bank’s reconciliation solution has delivered a good return on investment by decreasing financial risk to clients and the business, enhancing reconciliations operations, and providing Saxo Bank with a platform from which to expand its services without increasing resourcing overheads. “Since we deployed IntelliMatch Operational Control, our transactions have doubled. There’s no doubt that the solution has supported this growth and will continue to do so in the future,” says Deacon.
Revenue Is Increased While Decreasing Risk
In the past four years, Saxo Bank has steadily increased its business and revenue. Deacon says: “We process an additional 100,000 transactions a day compared to four years ago. This number is continually growing as we expand our products. Today, we manage around 300,000 transactions daily, and most of these are matched automatically. By increasing our match rate we’re decreasing financial risk for ourselves and our clients.”
Compliance Is Supported Despite Increasing Regulation
It’s crucial that Saxo Bank can demonstrate security and transparency in all of its financial processes. With the IntelliMatch Operational Control solution, Saxo Bank has the tools to create comprehensive reports for financial regulators and internal auditors. It can also demonstrate that all exceptions are investigated and resolved quickly.
Fewer Staff Can Manage High Transactional Volumes
IntelliMatch Operational Control is equipped to manage peaks in volumes. It scales easily to meet Saxo Bank processing volumes, which range from an average of 200,000 transactions to more than 600,000 transactions at peak times. This scalability has given the Saxo Bank back-office team the freedom to focus on different areas of the business. Deacon says: “Four years ago, around 70 per cent of our employees working in the back office were devoted to reconciliation tasks—today, only 30 per cent are.” Staff can also use IntelliMatch Operational Control to resolve discrepancies faster, whereas previously employees used spreadsheets to analyse information.
User-Friendly Software Improves Efficiency
The bank’s IT team can configure the IntelliMatch Operational Control platform to accommodate new business products with minimal help from SunGard. For example, it easily configures the transactional requirements for new assets, and does so without having to hire additional staff. Deacon points out that the software is also extremely user-friendly, and that her team have trained two super-users—non-IT workers—who can resolve most of the internal queries related to the solution.
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