Case study liquidity management banking luxoft for a top10global investment bank
For more information about Luxoft, visitwww.luxoft.comwww.luxoft.com/financial-services/case studyLiquidity Managementand Analysis SystemSummary13.09.2012Develop a system to monitor, analyze, and report liquidity risk for use by the bank’sTreasury and Liquidity Risk Operations departments.uu Client: A top ten global investment bankuu Business Area: Investment banking liquidity risk managementuu Asset Classes: Equities, fixed income, loans, equity derivatives, FIderivativesuu Technology Set: Oracle, Oracle BI, PL/SQL, Core Java, JMS, Spring,Hibernate, Jasper, Tomcat, WebLogic, Messaging, KSH Scripts, Control MJobs, SharePoint, QlikView, iRiseuu Integration: Oracle, Ad-hoc Integrationuu User Profile: Treasury, Liquidity Risk Operationsuu Geography: Worldwide (US, UK, Europe, Asia Pacific, Latin America,South Africa)uu Relationships Status: Ongoing ODC, T&Muu Services Provided: Business analysis, Development, QA/Testing,Production supportuu Team Size: 20+ team membersuu Duration: 3+ years development and ongoing maintenance
Business ChallengeIncreased regulatory requirements that followed the global financial crisiscompelled the bank to seek a new solution for liquidity management. Theywanted a flexible, scalable system that would measure and analyze theend-of-day liquidity position in a way that complied with Basel II regulatoryrequirements and that supported proactive liquidity management byensuring bank’s ability to meet obligations on time without incurringunacceptable losses.02Luxoft - Case StudyLuxoft Delivered SolutionThe bank began the software development internally with support froman offshore vendor. As the system’s complexity and size hit critical levels,the bank looked for a new partner to complete system development anddelivery. Luxoft was selected as the bank’s new software developmentpartner and the project moved from India to the Ukraine.Luxoft successfully delivered the system on time and within the budget,providing the bank with the following key business functions:uu Management of short-term liquidity gaps against existing limitsuu Management of overnight funding exposureuu Scenario Analysisuu Collateral Managementuu Maintaining liquidity reserve in the form of liquid assetsuu Internal and Regulatory Reportinguu Analysis of liquidity risk drivers (ratings, regional crises, insecure funding,insufficient collateral, etc.) for stress testingThe Liquidity Measurement and Analysis system performs the critical tasksof extracting and cleansing data from upstream systems, modeling andgenerating cash flows, running stress test scenarios, and publishing liquidityrisk data for end users and downstream systems. It manages over 70 datafeeds and generates over 100 reports and is optimized with data quality andperformance enhancements.
03Luxoft - Case StudyUPSTREAM SYSTEMSLIQUIDITY RISK MANAGEMENT AND ANALYSIS SYSTEMDOWNSTREAM SYSTEMS USERSTRADING DATA(TRADES, CASH FLOWS,POSITIONS, COLLATERALS)ETL MAPPINGSTATIC DATA(SECURITIES, COUNTERPARTIESS,BUSINESS HIERARCHIES)MODELINGLIMITS MANAGEMENTQUALITY CONTROLTREASURYLROFINANCESTRESS TESTING ENGINELIMITS MANAGMMENT SYSTEM EXTREMALREGULATORSENRICHMENTREPORTING
04Luxoft - Case StudyBenefitsCustomer FeedbackWith Luxoft’s technical expertise and advanced business domainknowledge, the client realized the following benefits:uu Increased financial flexibility by monitoring changes that requirestrategic adjustmentsuu More efficient distribution of investments through accurate, end-of-dayliquidity positioninguu Reduced operational and management costs by fully automating thedata input and outputuu Increased visibility to, and thereby the control of, the cash flowuu Improved decision-making and minimized risks with an enterprise-widesolutionuu Provided more rigorous risk management for the Treasury and LiquidityRisk Operations departmentsuu Provided full compliance to Basel II reporting requirementsThe detailed feedback is provided upon the specific request.