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When Jeffrey Miller joined the New
York branch of the NatWest Group in 1994, the bank was using a wide variety
of regulatory reporting methods, most of which were based solely on
information from its general ledger system. But using the general ledger in
combination with spreadsheets and other downloaded information posed
challenges in recognizing some customers or transactions that had to be
shown on the reports as well as verifying that the downloaded information
was correct.
Shortly after Mr. Miller joined the
organization, NatWest initiated a bank-wide project to eliminate accounting
inefficiencies resulting from the decentralization of the New York branch
from the rest of the U.K.-based NatWest. The institution had decided it
needed an in-house data warehousing facility to serve as the source of
information for a variety of reports – such as head office, management and
regulatory -- feeding off of the data warehouse.
Mr. Miller, now Vice President of
Regulatory Reporting for the New York branch, embarked on a project to find
an automated, integrated system that would allow the branch to accomplish
accurate and consistent reporting and one which provided the opportunity to
get transactional data directly from a data warehouse, rather than from
general ledger summary information.
After a review of the marketplace, he selected REG-Reporter® from IDOM,
Inc., Newark, N.J., a leading provider of banking automation products and
management consulting services to the financial sector.
Seeking a Regulatory Reporting
Solution
NatWest Global Financial Markets (GFM)
is a highly successful and growing business within the NatWest Group PLC.
GFM represents a portfolio of well-balanced products, providing innovative
and value-added solutions in money markets, short-term interest rate
derivatives, foreign exchange, currency options, structured derivatives and
related high-quality research. The New York International Banking Facility,
along with a facility in Nassau, the Bahamas, has approximately $16 billion
in assets.
The banking industry has heavy
reporting requirements including the Federal Reserve Bank, U.S. Department
of Commerce, U.S. regulatory agencies and the New York State Banking
Department. According to Mr. Miller, NatWest looked at several domestic and
international regulatory reporting solutions in 1996, but none included the
extensive number of reports produced by REG-Reporter, and none came from
companies with banking and reporting expertise on staff as had IDOM®.
“Regulatory reporting is very labor intensive to do manually, and it’s
extremely helpful to work with a vendor whose people understand your
business and all of the various reports and can help with suggestions for
changes or adjustments,” Mr. Miller said.
In order to get a true feel for the
REG-Reporter environment, his review process included visiting the New York
branch of Rabobank, a longtime IDOM client, to see first-hand how that
institution was using REG-Reporter. The Rabobank installation convinced Mr.
Miller of the advantages of the product.
“We had several goals for the
implementation of REG-Reporter,” Mr. Miller said. “We needed to build a
reliable, consistent database from which regulatory reports could be
completed. Reports are never-ending – they come daily, weekly, monthly and
quarterly. There are always many reports going out at the same time, and we
needed one system that could accommodate all reports in an effective and
cost-efficient manner.
He said NatWest also wanted to have the ability to further analyze data,
improve reporting accuracy, look at trends and answer questions from the
Federal Reserve Board.
NatWest completed the implementation of REG-Reporter in late 1997 and found quickly that it met
all of the key goals and objectives. “Our experience with REG-Reporter and
IDOM has been very positive,” Mr. Miller said. “Many of IDOM’s analysts and
employees are from the Federal Reserve Board’s statistical and technology
departments in New York. They understand the nature of regulatory reporting,
the burden and the process of managing it.”
The Business Benefits
Mr. Miller said the bank now has a
consistent and reliable daily database of information. “In fact, because
we’re using the same database for all reports, we have more consistency in
our reporting, in addition to the ability to perform edit checks and make
comparisons among reports.
“We wanted to minimize having to make changes manually. In the past, there
was a lot of manual effort put into updating reporting instructions when the
reports changed. Each unit had to decide how to handle changes. We can’t
always interpret changes appropriately, but having a vendor to keep us aware
of FRB changes and implement the modifications for us eases the risk for
those of us who do regulatory reporting.
“Because of the number of reports that REG-Reporter can produce, we’re
cost-saving on the regulatory reporting process. In addition, now that our
regulatory reporting has been standardized, it’s easier to train new staff,
standardize policies and procedures, and we can prepare reports much more
quickly. That reduces the man-hours spent in preparation and increases the
time we can spend reviewing and analyzing the information and integrating it
with other reporting information.”
Additional business benefits of the automated reporting system include:
- ability to create a consistent and logical daily database of regulatory reporting information
- ability to produce reports that reconcile accrued interest receivable/payable detail and premium/discount
detail
- understanding of foreign banking organizations and U.S. branch regulatory reporting needs
- coding logic for currency/country which mirror Federal Reserve Bank reports and
more meaningful analysis of regulatory reports
There are additional benefits to
REG-Reporter that NatWest and Mr. Miller did not anticipate when he was
researching automated regulatory reporting options.
“With so much consolidation going on in the financial industry, having
implemented a system like this one in place gives us a competitive advantage
over those who have not organized their reporting responsibilities
efficiently.
“In addition, REG-Reporter will
allow us to improve our reporting even further, by allowing us the
possibility of merging different reporting functions in the future. We plan
to install the newest version of REG-Reporter, 4.2, early next year. That
will allow us to continue to improve on our reporting capabilities,” Mr.
Miller said.
On a personal note, Mr. Miller has
gained so much experience in regulatory reporting that in 1999, he was
elected as an International Financial Services Association (IFSA) U.S.
Chapter Technical Committee Chair - Regulatory Reporting. In that capacity,
he is able to share his regulatory reporting expertise with his colleagues
in the industry.
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Case
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