Basel II norms are compliance requirements that are followed by banking institutions and Investment management firms. Under these norms, banks are encouraged to identify future risks and maintain a minimum capital. This kind of risk assessment stipulates a comprehensive measure and minimum standard for capital adequacy.

1. The client is an international financial services company based in the USA. It provides investment management, asset and fund administration, fiduciary,
and banking services. The company serves its global clients through a network of offices in North America, Europe and the Asia-Pacific region.
Client Overview
Case Study
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Basel II ERM implementation for a Fortune 500 Global Investment Management firm
Business Benefits
• The risk engine ensured better
investment decisions that were in sync
with the customer’s risk appetite.
• It helped the client in differentiating
between risky and non-risky assets. It
also helped in identifying risk weighted
assets using their internal rating
system.
• The data warehouse became a one
stop shop for credit risk related data
and the capital market.
• It became a useful tool in measuring
the performance of business units by
comparing them with the stated
financial targets.
PeopleSoft
Business Needs
Basel II norms are compliance requirements that are followed by banking institutions and
Investment management firms. Under these norms, banks are encouraged to identify future risks
and maintain a minimum capital. This kind of risk assessment stipulates a comprehensive
measure and minimum standard for capital adequacy. In order to comply with these stringent
regulatory norms, the client decided to implement a data warehouse incorporated with the
compliance requirement Basel II.
Scope
Our task, at Hexaware, was to upgrade the current applications from PeopleSoft FSCM v8.8 and
The client’s objective was to incorporate an automated and centralized database that could extract
data from various source systems and processes. The data would then be used to calculate
minimum capital or capital adequacy, which needs to be maintained. It would also facilitate:
• Credit Exposure Monitoring – This would allow the client to aggregate the credit exposure for
their clients.
• Credit Risk Reporting – This would enable the production of reports on credit risks, for
corporate and Board level credit risk reporting.
• Basel II History Data Archives – These archives would collect and record existing tactical data
going back to 1999.
Challenges
• The implementation requirements were spread out over different business teams. Interaction
and coordination with each of them, to understand requirement specifications, proved to be a
major challenge.
• There was a constant need for regular exchange of information and interaction with third party
vendors. This was required to prevent rework and wastage of time.
• The data warehouse was implemented as per the norms of Basel II. They were quite complex
and required good business understanding.
• Performance tuning was required at every stage of implementation, due to the huge volume
of data.
Solution
The Hexaware team built the Basel II Data Warehouse as a data management and maintenance
system - an automated and centralized IT architectural database that could extract data from
various source systems and processes. This system could also compute and arrive at the
regulatory capital, by entering data into its Calculation Engines.
The Hexaware team successfully made a consistent, accurate, and automated mechanism that
could provide the required data with appropriate control and integrity.
Technology Enviroment
• Ascential DataStage 7.5
• Oracle 10g