Financial clearinghouse consolidates IT systems

Bad news tends to travel faster than good on Bay Street these days, but either way, everyone wants to know about the bottom line as quickly as possible.

That means reporting tools need to be as efficient as possible at the Canadian Depository

for Securities (CDS), a clearinghouse for daily trades made between banks and brokers. It holds nearly $2 trillion on deposit and settles up to $200 billion daily for banks, trust companies and other financial services firms. CDS provides these companies with settlement reports and the exchange of payments between the end users.

Until this year, CDS had been using two systems – one to manage transactions in government debt and money market securities and the other for equities and corporate debt securities.

But to keep up with demands from its users for up-to-date information, it needed to move to one platform to do all those tasks and make it easier for the clients (like banks and brokers) to create the status reports they wanted throughout the day. CDSX is the system that replaces the two legacy systems the company was using to process the transactions.

“”We wanted to help our end-users get value out of the technology,”” says Ken Wong, assistant vice-president of IT development for CDS.

CDS developed a Web reporting application with Information Builders’ WebFocus that processes debt and money market securities to allow straight-through processing and hopefully reduce the error rate of data entry.

“”We have it done by processing debt and equity trades and creating reports as well as continuously netting those trading positions,”” says Wong. “”So throughout the day participants often have a need to know what’s been done, what’s not been done on their behalf, that kind of thing.””

“”They can build the reports when they need them without waiting for us and requesting us to do it for them, thus giving more control to them.””

With 500 COBOL reports to be replaced from the two legacy systems, Wong says the original cost to replace them was estimated at $3.5 million, due to the labour-intensive process. He wouldn’t say what the end cost was using WebFocus, but indicated it was significantly less.

“”We did achieve a pretty impressive cost savings. And because we had a very aggressive timeline to get CDSX up and running we decided to look for a technology solution that could help us drive out those business values and empower our end users to get at data and do inquires on their own,”” said Wong.

With COBOL, Wong says a different skill set was required to translate reports that were delivered to a terminal screen or printer. With the new process, it’s done over the Web.

“”Today we provide the end user access to data to do query and customized reports on their own so there is a lot less work from CDS technology people,”” he said.

The end result was a subset of those original 500 reports that required a fraction of the number of templates, said Brent Bruin, systems engineer with Information Builders Canada. “”I think that’s where a lot of the return on investment comes from,”” he said.

The users can have any number of parameters set on a screen and generate multiple scenarios and create the reports in Word, Excel, and PDF format.

“”That’s what we find with many of our clients, they don’t necessarily know what questions are going to be generated by the users. So if you give them the options through a screen with a variety of parameters they can pick and choose what they’re looking for and let the data steer them down the appropriate path,”” said Bill Arkell, enterprise sales manager with Information Builders.

The first portion of the project was completed in five months. To date, the money market and most debt securities are processed on the CDSX platform with the remaining debt and equity securities scheduled for conversion in 2003.


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