Bridging the Banking Reporting Gap

The banking industry has a reporting issue. The traditional systems that have been in place for years continue to serve their purpose, but are not designed for today’s banking reporting needs. Traditional Asset & Liabilities Management (ALM) systems are designed to do risk assessment for the institution and have a complete listing of the banks instruments, while some banks have a separate system for tracking the individual instruments. The General Ledgers (GL) have all the standard accounting information needed to run the business. When it comes time to do reporting, such as the Y-9C or Call Reporting, the finance department needs information from them ALL.

What’s the problem?

The information in the ALM system has way too much detail for the Y-9C. For that report really all you need are the Principal Balances, the Interest, the maturity and few other items from existing loans (by Instrument ID and by GL). To get that information can take a very long time, often days. This leads to conflicts as with Treasury as the different departments are trying to get their jobs done.

The solution? Having a system, like Tagetik, that serves as a reporting layer taking information from both systems. From here, the reports can be run without relying on data feeds from the ALM and GL that are then input into spreadsheets to get the reports needed.

A not-so-small side benefit

This solves another issue that often arises. The balances from the ALM and GL are often not in sync. Having Tagetik sitting between the two can act as a reconciling agent, with validation rules to identify issues. This alone has value to banks.


When it comes to planning banks face multiple issues. Accuracy in the cash flow generated by the existing portfolio, rigor in having the projected cash generated by the new volumes (balances and interest) and the ability to budget even the non-specific items such as Capex, Non Interest Income and Expenses and the Payroll is becoming a key factor for all the banks. Being able to do that within one application without having to rely on other departments verticals (Treasury, HR, Marketing) is a big value added. In addition, having the ability to run variance reports Actual Vs Budget, Forecast Vs Actual and a complete Board Reporting Pack within the same application gives the bank the chance to react quickly to Board comments such as top-down adjustments or parallel simulations.

Balancing everything is the last, but certainly not least, important part in a big chain. Once the budget season is over the planning department should be in the position to check the overall bank Asset & Liabilities and take action if they do not tie, investing more money (i.e. Fed Funds) or even borrowing additional cash. This will force them to re-run the complete budgeting simulation that is possible only by using a driver based budgeting application that re-calculates the complete simulation based on different assumptions and keeps them stored for reporting purposes.

The G A P widens

On top of the standard reporting and planning, banks are now faced with growing regulation. In the US, this past quarter (Jan-Mar ‘14) banks had to go through stress tests on the projected years. The Dodd-Frank Act Stress Test (DFAST) and subsequent Comprehensive Capital Analysis and Review (CCAR). With these tests, banks must run through a ‘worst-case’ scenario to see how they stand up. Addressing these requirements on the back end of the reporting and planning process is something banks are dealing with now. Having one system for all would streamline this process and provide more time for analysis.

Banks are in a new era of regulation and reporting requirements. The time for bridging the gap with spreadsheets and off-line systems has to end. A unified system for all the reporting and planning needs of today’s banks will save time, money and most importantly reduce risks.


Tagetik CPM Software

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