Risk and Compliance
Experience Funds Transfer Pricing
Banks and other financial institutions need efficient and easy to use tools to better understand the business performance at all levels and take advantage of all opportunities and ultimately improve profitability. We have the best solution for your business challenge - Experience™ Funds Transfer Pricing. Experience FTP is specially tailored to answer South Eastern Europe markets’ needs. Flexible funding models, integration with Tezauri BDW or any third party data source and detailed reports based on customizable profitability dimensions provide effective and robust FTP solution for any financial institutions in the market.
Flexible funding models provide a powerful yet easy to use way to model different transfer pricing strategies.
Funding strategy is centrally modelled using different methodologies and reference interest rates. Funding models provide performance data for each interest-bearing arrangement.
Different views and comparisons of the performance data are delivered throughout the bank by a flexible reporting system.
Drill-down reports enable easy and intuitive exploration of different aspects of your profitability based on different and customizable criteria.
Service oriented architecture guarantees flexibility, scalability, extensibility and risk-free implementation.
Robust database design based on years of experience guarantees scalability and performance.
Improves pricing decisions through better understanding of which products, markets, customers and branches are most and least profitable.
Enables better allocation of scarce resources such as management attention, systems resources, marketing, expenditures and capital, through comparative evaluation of business lines.
Provides different views and analysis of profitability by measuring and breaking profitability down in different ways.
Basis for performance management by comparing business line performance to budget.
Integrates easily with any data source or consumer.
Transfer Price Modelling
Funds Transfer Pricing or FTP is a methodology used to calculate relative profitability of all interest baring transactions in a financial institution, relative to an internal reference yield curve (FTP yield curve).
You can use combination of different funding methods to model transfer pricing:
- Multiple pools method groups arrangements into pools of different maturities and applies a transfer price per pool. Use contracted maturity, average life or Macaulay duration to determine arrangement maturities.
- Core - volatile method determines a minimum balance over a past period and uses this knowledge to fund part of the current balance up to the minimum level using core and the rest using volatile interest rate.
- Fixed rate method assumes manually set fixed funding rate.
Drill-down reports based on product type, business unit, industry or custom dimensions provide clear view on performance from the perspective you require.
With Experience FTP, you can use the following reports to better understand business performance of your bank:
- Summary report to summarize performance in different time frames.
- Detailed report to perform detailed performance analysis in a time frame.
- Comparison report to compare performance of two different components in the same time frame. For instance two business units or two regions.
- Interest rates report to analyse interest rates distribution in a time frame.
- New production report to analyse new production in a time frame.
Reports can be viewed in a browser, or you can have it delivered to your email inbox or download them in many formats, including Excel, Word and PDF. Microsoft SQL Server Reporting Services platform is used to provide powerful reporting experience. Advanced report caching features and early data aggregation provide great performance, even for most complex reports.
Technical Specification of the Solution
Cost-effective infrastructure is achieved by deploying the solution to the optimal hardware environment.
Service oriented architecture allows the system to scale up independently each of the modules, from a modest couple of servers up to a powerful group of server clusters.
Experience FTP database model enable a highly scalable database, efficient storage of large amounts of data and great reporting performance based on the IBM® IFW IDM guidelines and years of the Tezauri Banking Data Warehouse implementation experience.
Database schemas used in the database simplify administration of security and database management and are vital in protecting data with third party source data providers or output data consumers.
Integration points in Experience FTP for 3rd Party Integrations are designed to easily snap-in to your enterprise IT environment any way you need it.
- Desktop client: Windows XP Vista / 7
- Thin client: remote desktop terminal
- Application services: Microsoft .NET on Windows Server 2008 R2
- Analytics platform: Microsoft SQL Server 2008 Integration / Reporting Services