Dodd Frank Real Time Reporting            A.J. Aronoff - Connectivity Practice Director, Prolifics          Mike McChesney...
Building a Smarter Planet: Banking & Financial Markets    Business Agility in Banking    Dodd Frank Real Time Reporting   ...
Business Agility for Smarter Banking Agenda         1                    Real Time Reporting Update         2          Cas...
Business Agility for Smarter BankingTop of mind risk and compliance business issues                        What’s keeping ...
Business Agility for Smarter BankingChallenges In Planning for ComplianceWhat’s Keeping Your Peers Up at Night?  Macro-Pr...
Business Agility for Smarter BankingInnovative firms can drive significant strategic benefits bycapitalizing on the magnit...
Business Agility for Smarter Banking                                Dodd Frank Uncertainty Continues         Source: Davis...
Business Agility for Smarter Banking         SEC Rulemaking for Real Time Reporting Not Finalized         From DavisDavis ...
Business Agility for Smarter Banking                              Complex Compliance Challenges  Dodd-Frank Act is 848 pa...
Business Agility for Smarter Banking                           Other Challenges (Complex Rules) Additional (50-100) data ...
Business Agility for Smarter Banking Agenda         1                    Real Time Reporting Update         2          Cas...
Business Agility for Smarter BankingDepository Trust and Clearing Corporation (DTCC)Keeping up with growth while keeping m...
Business Agility for Smarter BankingAn international financial firmEmploys real-time monitoring and pattern recognition to...
Business Agility for Smarter BankingTop 5 North American BankIncreases cross-selling resultsthrough deep customer insight ...
Business Agility for Smarter Banking                                                  We Can HelpFrom the CFTC rule: “As s...
Business Agility for Smarter Banking                                       Thank you                                      ...
Dodd Frank Real Time Reporting            A.J. Aronoff - Connectivity Practice Director, Prolifics          Mike McChesney...
Agenda     1. Risk And Compliance Issues     2. Keep Me in the Green     3. SPOF: Single Point of Failure     4. MQ Monito...
Accomplished IBM Software Partner     AWARDS:                                              SKILLS and RESOURCES:      201...
Prolifics Customers                       Financial Services       Healthcare                           Government     Ret...
“Keep me in the Green”      The almost universal message from anyone dealing with       compliance         Keep me in th...
Dodd Frank Reporting Requirements      The Dodd-Frank Act requires that swap transaction and pricing data be       report...
SPOF: Single Point of Failure      SPOF (Single Point of Failure) is a 4 letter word. That is one of the       many many ...
WebSphere MQ & Message Broker Monitoring Decrease Downtime w/ WebSphere MQ & WebSphere Message  Broker     Identifies co...
WebSphere MQ Performance and Availability Monitoring Navigator                                                            ...
MQ High Availability: Multi-instance Queue Managers 1. Normal                          MQ                     MQ Execution...
Multi-instance Queue Managers    2. Disaster                      MQ                    MQ      Strikes                   ...
Multi-instance Queue Managers 3. Standby        MQ                  MQ                                                    ...
Multi-instance Queue Managers4. Recovery       MQ                  MQ Complete        Client              Client          ...
Next Steps      Prolifics is offering free Dodd Frank discovery calls that        take into consideration the prevalence,...
Contact – A.J. AronoffConnectivity Practice DirectorEmail - aj@prolifics.com
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Dodd-Frank Real Time Reporting

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Learn what the Dodd-Frank real-time reporting requirements mean for you and how to ensure you're compliant.

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  • WelcomeAbout ProlificsOfferings and sales playsQ and A
  • “Keep me in the green” is a thought that has been expressed by many customersAn ounce of prevention is better than a pound of cure
  • Dodd-Frank Real Time Reporting

    1. 1. Dodd Frank Real Time Reporting A.J. Aronoff - Connectivity Practice Director, Prolifics Mike McChesney - Websphere Business Agility Tiger TeamWebSphere Powers Smarter Banking
    2. 2. Building a Smarter Planet: Banking & Financial Markets Business Agility in Banking Dodd Frank Real Time Reporting Mike McChesney Websphere Business Agility Tiger Team WebSphere Powers Smarter Banking© 2013 IBM Corporation
    3. 3. Business Agility for Smarter Banking Agenda 1 Real Time Reporting Update 2 Case Studies 3 © 2013 IBM Corporation WebSphere Powers Smarter Banking 3 3
    4. 4. Business Agility for Smarter BankingTop of mind risk and compliance business issues What’s keeping executives up at night? • Aligning risk exposure with • Risk adjusted forecasting • Reducing risk exposure • Ensuring regulatory business objectives and risk-based resource • Ensuring regulatory compliance • Risk management across allocation compliance • Managing through market, credit, operational • Better financial risk • Reducing control testing regulatory change domains management (e.g. market, and internal audit burden • Managing regulatory • Ensuring adequate regulatory credit, liquidity, stress • Reporting on risk exams, audits and and economic capital and testing) exposure against business requests (e.g. FFIEC) liquidity • Regulatory requirements objectives and IT KRIs • Reducing cost for • Quantifying risk exposure • Financial reporting (e.g. • Preparing for internal and policy and control • Avoiding unexpected loss SOX, IFRS, FSA) external audits and RCSAs management • Establishing risk appetite • Fulfilling compliance • Business continuity risk • Adherence to policy • Risk Culture and Policy obligations (e.g. BSA/AML, • Vendor Risk and procedures Communication SEC, FINRA, Dodd-Frank) CRO CFO CIO/CISO CCO © 2013 IBM Corporation WebSphere Powers Smarter Banking 4
    5. 5. Business Agility for Smarter BankingChallenges In Planning for ComplianceWhat’s Keeping Your Peers Up at Night?  Macro-Prudential Risk Regulations such as DFA are Enormously Disruptive – Impacting capital allocation & business / operating model – Inherently rolling nature from Act to statutory code  Even where firms have PMOs to demonstrate attainment and maintenance of compliance, they wrestle with – Collective decision making and consensus building amongst the stakeholders – Decisions are point in time and recursive  Firms are struggling with truly understanding the economic and financial impact AND are having challenges making it actionable – McKinsey Day of Reckoning? ROE Capital markets businesses from 20% to 7%  Impact on the business and the operating model – Given the breadth of the enacting legislation, the related management and reporting burdens and costs are significant. – Demands on budgets are doubling, yet maintenance budgets are being slashed. – As compliance is pure cost, are there revenue-offset opportunities? New regulations require a new model to achieving compliance. © 2013 IBM Corporation WebSphere Powers Smarter Banking 5
    6. 6. Business Agility for Smarter BankingInnovative firms can drive significant strategic benefits bycapitalizing on the magnitude of the required investment Followers Innovators Achieve “Basic Dodd-Frank Achieve “Strategic Value” Compliance” Strategic Strategic business investment for value business value Helps unlock the strategic business value Required Government Required Government investment for compliance & investment for compliance & mandate cost savings mandate cost savings Business Business Investment Investment value value • Deploy minimal work-arounds and changes to • Identify and maximize opportunities to increase comply with government mandates at the business value by using Dodd-Frank mandate lowest possible cost as an opportunity to invest in innovation for cost savings and growth © 2013 IBM Corporation WebSphere Powers Smarter Banking 6
    7. 7. Business Agility for Smarter Banking Dodd Frank Uncertainty Continues Source: Davis Polk Regulatory Tracker © 2013 IBM Corporation WebSphere Powers Smarter Banking 7
    8. 8. Business Agility for Smarter Banking SEC Rulemaking for Real Time Reporting Not Finalized From DavisDavis Polk Regulatory Tracker Source: Polk Regulatory Tracker © 2013 IBM Corporation WebSphere Powers Smarter Banking 8
    9. 9. Business Agility for Smarter Banking Complex Compliance Challenges  Dodd-Frank Act is 848 pages with 398 rulemaking requirements.  Two 85 page rules for real time reporting from CFTC and SEC with hundreds of comments from a wide array of interested parties.  Phase in with 6 categories of time delay based on asset class, counterparty or swap type.  Time delay rule covers 7 pages.  5 pages of rules on data definitions.  Different thresholds and time delays required by CFTC and SEC.  Need to track reportable events against time based or event based criteria.  Real time reporting including time stamping to the second using UTC (vs. Greenwich mean) coordinated universal time.  What’s next? Cre dit lines © 2013 IBM Corporation WebSphere Powers Smarter Banking 9 P All a ss t cla ss s e e History All instr ume nt s Mark
    10. 10. Business Agility for Smarter Banking Other Challenges (Complex Rules) Additional (50-100) data elements to be reported to the SEC. Oral or phone trades systematized based on time on phone when “material terms” agreed to. Pricing reporting challenges based on pricing definition-spread/basis points/discount or premium. Reporting “as soon as technologically practicable.” If a data field for a particular swap is a relevant term of the publicly reportable swap transaction, the reporting party must provide sufficient information to publicly disseminate transaction and pricing data. The Commission understands, further, that the SBS market is almost entirely institutional, and large institutions have in place the systems and processes necessary to support trading and risk management of complex structured products. In many cases, trade details will already be systematized and little or no manual intervention would be necessary to aggregate or send the transaction data. In such cases, where it is technologically practicable for a reporting party to report the SBS transaction information required by proposed Rule 901(c) in one second, then it would be required to report the SBS transaction to a registered SDR in one second. Would require the reporting party to electronically transmit the information required to be reported… in a format as required by the registered SDR. In addition, …would require a registered SDR to have policies and procedures that specify the data format (which must be an open- source structured data format that is widely used by participants), connectivity requirements, and other protocols for submitting information. © 2013 IBM Corporation WebSphere Powers Smarter Banking 10
    11. 11. Business Agility for Smarter Banking Agenda 1 Real Time Reporting Update 2 Case Studies 3 © 2013 IBM Corporation WebSphere Powers Smarter Banking 11 11
    12. 12. Business Agility for Smarter BankingDepository Trust and Clearing Corporation (DTCC)Keeping up with growth while keeping markets on firm groundBusiness challenge: “Our ability to expand capacityThe dominant provider of investment processing services in the U.S., DTCC sought demonstrates our commitment toto parlay its record of service innovation and cost leadership by expanding globally. prepare for unprecedented growthTo meet the additional processing demands and new service developmentrequirements of these new markets, DTCC needed scalability, reliability and and other risk factors affecting theflexibility in its processing platform. global marketplace. IBMs technology and vision have been essential to ourSolution: success in doing this.”DTCC teamed with IBM to re-architect its core processing infrastructure to enable it — William B. Aimetti,to push its already world-leading transaction capabilities even further to President and CEO, DTCCaccommodate DTCC’s global growth vision. By re-architecting its systems anddoubling its unmatched processing capabilities, DTCC has been able to enter new Solution components:global markets while developing new services. IBM’s assistance in moving the  IBM Global Business Servicescompany toward SOA is a key part of DTCC’s drive toward increased flexibility.  IBM WebSphere® Application Server  IBM WebSphere MQBenefits:  IBM DB2® 77% increase in overall transaction processing capacity, enabling TCC to handle  IBM Tivoli® Composite Application 3x the highest volume ever recorded Manager 100% rate of reliability, with $1.5 quadrillion in trades settled annually  IBM System z 25% reduction in cost per transaction, giving DTCC the lowest cost per transaction in the world Rebates of excess transaction fees of more than $580 million © 2013 IBM Corporation WebSphere Powers Smarter Banking 12
    13. 13. Business Agility for Smarter BankingAn international financial firmEmploys real-time monitoring and pattern recognition to identify suspicious behaviorThe need:With many unique business units, each employing independent processes and Solution components:standards, this international financial firm was plagued by inefficiencies. In particular,  IBM WebSphere® Applicationthe organization could not effectively coordinate its anti–money laundering and Serveranti–terrorist financing efforts enterprise wide. Some business units lacked any  IBM WebSphere MQviable plans at all. To comply with international regulations and standards, theorganization needed to establish a common strategy.  IBM System z9® Enterprise ClassThe solution:  IBM System z10™Working closely with IBM Business Partner, the company implemented a unified Enterprise Classmonitoring solution that tracks global financial transactions in real time,automatically detecting suspicious behavior. The solution, leveraging IBMWebSphere® software and hosted on IBM System z® hardware, comparesincoming transactions against regularly updated sanctions and watch lists. It alsoevaluates transactions for operational (e.g., credit) risks.What makes it smarter: Monitors the transaction stream in real time, improving the efficiency and quality of anti–money laundering and anti–terrorist financing efforts Standardizes and automates the identification of suspicious activity with deterministic detection and artificial intelligence techniques Improves monitoring without compromising throughput, enabling the firm to screen over one million transactions per day, with less than 0.5 percent false alerts © 2013 IBM Corporation WebSphere Powers Smarter Banking 13
    14. 14. Business Agility for Smarter BankingTop 5 North American BankIncreases cross-selling resultsthrough deep customer insight and automated decisioningDramatic increase in offer acceptance leads to $14M new revenue in 2.5 monthsThe need:One of the largest financial services providers in the world recognized it was losing Solution components:revenue opportunities within its customer base, as it was unable to present the  IBM WebSphere® Operationalright offer at the right time to customers. Decision ManagerOffers were sometimes proposed for which customers could not qualify, damaging  IBM WebSphere Applicationcustomer satisfaction. Decision logic was scattered and inconsistent across Serverchannels, creating a lack of enterprise control.  IBM WebSphere MQThe solution:  IBM DB2®Using components from the IBM Banking Industry Framework for customer careand insight, the bank revamped its decision support systems to use customer profiledata and compliance policies to generate pre-approved offer recommendations of high interest to customers in real time.The system calculates risk, distribution amount, eligibility and limits with consistency across channels and speedsapplication upon offer acceptance.What makes it smarter: Employees are equipped to make intelligent product recommendations in real time. Result: $14 million in new business in 2.5 months. Customer experience is enhanced with pre-approved offers that better match needs. Result: Offer acceptance increased from 3% to 20%-30%. Share of wallet is increased with improved risk management, and speed to market for new offers / products is increased improving competitive results. © 2013 IBM Corporation WebSphere Powers Smarter Banking 14
    15. 15. Business Agility for Smarter Banking We Can HelpFrom the CFTC rule: “As soon as technologically practicable” means as soon as possible, taking into consideration the prevalence, implementation and use of technology by comparable market participants.” The prevalence, implementation and use of technology by comparable market participants can be delivered using an appropriate software stack from IBM. Real time-low latency High availability Complex rule and event processing across lines of business and platforms Credit lines P All asset classe s History All instr uments Mark Lendi© 2013 IBM Corporation ng WebSphere Powers Smarter Banking ng Tradi 15 Limits transactions transactions P
    16. 16. Business Agility for Smarter Banking Thank you © 2013 IBM Corporation WebSphere Powers Smarter Banking 16
    17. 17. Dodd Frank Real Time Reporting A.J. Aronoff - Connectivity Practice Director, Prolifics Mike McChesney - Websphere Business Agility Tiger TeamWebSphere Powers Smarter Banking
    18. 18. Agenda 1. Risk And Compliance Issues 2. Keep Me in the Green 3. SPOF: Single Point of Failure 4. MQ Monitoring (Find problems & solutions) 5. MQ High Availability (no stranded messages)18
    19. 19. Accomplished IBM Software Partner AWARDS: SKILLS and RESOURCES:  2013 IBM Beacon Award Outstanding Technical  Serviced over 1500 IBM software accounts in the past 8 years; Vitality implemented over 300 portals  2013 IBM Collaboration Solutions Distinguished  Conducted migrations to WebSphere from other technologies for Business Achievement over 140 clients encompassing more than 2,000 applications  2012 Outstanding Business Agility Solution Award  Prolifics boasts over 400 J2EE, WebSphere, ICS, Security, Business Analytics, ECM, Tivoli, Rational certifications for architecture,  2012 IBM Smart SOA Impact Award Winner development, administration, and project management  2012 Global WebSphere Community Customer  IBM’s highest technical rating (Level 5) Recognition Award Winner  Highly Accredited - IBM Tivoli “AAA Accredited;” IBM Cloud  2012 ICS Award for Best Industry Oriented Social Certified; Accredited with Ready for Rational; IBM Authorizations Business Solution for Security, Insurance, Finance, Healthcare & Life Sciences,  2012 IBM Awarding Client Excellence (ACE) Banking, Energy & Utilities, Social Business and Enterprise Content Award Winner Management.  2010 Impact Best BPM Solution Award  15 Technical Staff are "IBM Champions"  2010 Lotus Best End-User Solution Award  Prolifics has worked with internal development teams multiple times for the development of IBM technologies.  2010 Lotus Best Industry Solution Award  Strategic relationship gains internal access to IBM’s resources,  2009 Rational Solution Award labs, and product development teams  2008 Outstanding SOA Solution Award  2008 Overall Technical Excellence Award  2007 Overall Technical Excellence Award  2007 Impact SOA Process Solution Award  2006 Best Portal Solution Lotus Award  2005 5-Star Partner Award19
    20. 20. Prolifics Customers Financial Services Healthcare Government Retail & Distribution Utilities Insurance Education20
    21. 21. “Keep me in the Green”  The almost universal message from anyone dealing with compliance  Keep me in the Green  Everyone from Einstein to Erasmus has said that “prevention is better than cure”  Einstein’s quote:  Brilliant people solve problems Geniuses prevent them  The goal of this presentation is avoiding problems And finding a bit of a safe harbor21
    22. 22. Dodd Frank Reporting Requirements  The Dodd-Frank Act requires that swap transaction and pricing data be reported “as soon as technologically practicable.” What does that mean under the proposed rules?  “As soon as technologically practicable” means as soon as possible, taking into consideration the prevalence, implementation and use of technology by comparable market participants. http://www.cftc.gov/ucm/groups/public/@newsroom/documents/file/rtpr _qa.pdf  MQ for guaranteed delivery of messages and High Availability to handle failures is the prevalent implementation and use of technology by comparable market participants.  Note: MQ H.A. is available via a special part number.22
    23. 23. SPOF: Single Point of Failure  SPOF (Single Point of Failure) is a 4 letter word. That is one of the many many words heard after hurricane Sandy  Every time there is a major outage, there are many lessons learned. One company had a clause guaranteeing next day delivery of fuel under any emergency. Sadly, (nor surprise) delivery proved to be impossible during an emergency. (The employees save the day. Preparation reduces anxiety.)  SPOFs have included: redundant firewalls that didn’t failover, air conditioners that melted & every other unimaginable occurrence  For compliance, using multi instance or highly available queue managers covers the clause for the prevalent implementation and use of technology by comparable market participants23
    24. 24. WebSphere MQ & Message Broker Monitoring Decrease Downtime w/ WebSphere MQ & WebSphere Message Broker Identifies common problems and automates corrective actions Auto-discovery and immediate monitoring of complex environments Drill-down to locate problem, identify root cause and resolve bottlenecks or outages Proactively Prevent Problems Correctly configure and deploy your WebSphere MQ infrastructure Detect and repair problems as they happen, or alert you to an imminent concern Provides key MQ and Message Broker metrics for real-time and historical data analysis24
    25. 25. WebSphere MQ Performance and Availability Monitoring Navigator Workspace chart showing WMQ shows threshold monitoring agent violation values both initial & current Clicking on links takes you to the problem area ‘Expert Advice’ gives help for resolving out-of-box situations ‘Take Action’ allows for manual or automated problem resolution  Monitor WebSphere MQ health and status  Monitor availability of all Queue  Monitor channel status and performance Managers  Monitor queue status and performance  Monitor queue/channel thresholds  Queue Sharing Group status  Automatically repair error conditions25
    26. 26. MQ High Availability: Multi-instance Queue Managers 1. Normal MQ MQ Execution Client Client network 192.168.0.1 192.168.0.2 Machine A Machine B QM1 QM1 Active can fail-over Standby instance instance QM1 networked storage Owns the queue manager data
    27. 27. Multi-instance Queue Managers 2. Disaster MQ MQ Strikes Client Client networkConnectionsbroken fromclients 192.168.0.1 192.168.0.2 Machine A Machine B QM1 QM1 Active locks freed Standby instance instance QM1 networked storage
    28. 28. Multi-instance Queue Managers 3. Standby MQ MQ ConnectionsComes to Life Client Client still broken network 192.168.0.2 Machine B QM1 Active instance QM1 networked storage Owns the queue manager data
    29. 29. Multi-instance Queue Managers4. Recovery MQ MQ Complete Client Client Clients reconnected. Processing continues. network 192.168.0.2 Machine B QM1 Active instance QM1 networked storage Owns the queue manager data
    30. 30. Next Steps  Prolifics is offering free Dodd Frank discovery calls that take into consideration the prevalence, implementation and use of technology by comparable market participants  IBM and Prolifics are offering MQ High Availability Licenses at large costs savings. Combination offerings (including installation and configuration) are available as well  MQ Advanced Developer licenses makes it easy to keep up with the latest advances in MQ (including security and Managed File Transfer).  IBM offers tools to monitor your systems and support pacs for recording transactions. Demos, discussion, software and service combos are all available.30
    31. 31. Contact – A.J. AronoffConnectivity Practice DirectorEmail - aj@prolifics.com

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