Exmacon has proposed for banks an outsource development of analytical financial applications:
General Ledger Module
Transfer Pricing Module
Cost Allocation Module
Provisioning IAS 39
Competitor Analysis Module
Our team has been developed such applications for banks in CIS market taking into account their data structures. However, we are ready to develop an application suite from scratch to meet specific requirements of banks in other markets.
General Ledger Module allows users to generate a bank's balance sheet based on the information of the general ledger accounts. This module enables users to analyze the balance sheet data by currency, products, operating segments and organization units of a bank. Balance sheet can be generated at the date or per a certain reporting period (week, ten days, month, quarter or year). Moreover, this module makes it possible to analyze bank balance sheet not only at the particular date, but also in the dynamics.
General Ledger Module also allows users to construct a profit and loss report based on balance sheet accounts data as well as on income and expenses transactions per reporting period. This module allows users to generate reports by different dimensions: products, operating segments, organization units, currencies. The module makes it possible to build an income statement at the particular date and in the dynamics.
Set of risk management reports can be also generated based on General Ledger data and additional contract’s data such as duration, currency, nominal rate, etc. For CIS banks we usually include in the project scope for General Ledger application development the following risk management reports: client accounts’ balances dynamic, interest rate yield curves and liquidity forecuts.
Transfer Pricing Module automates calculations of the transfer income and expenses as well as transfer margin at the level of each contract, product, operating segment and organization units. Transfer income and expenses are calculated based on accounts’ turnover and accounts’ balances by currencies and maturities. On the basis of these calculations generated management reports to reconcile transfer calculations for a whole bank (the transfer trial balance) with specification to arrangements, accounts and posting entries, etc.
The functionality of the module includes generation of the management balance sheet and income statement by client segments, organization units taking into account transfer income and expenses, as well as the transfer margin specified to the level of individual client contract and accounts.
Due to lack of long-term market indicators for setting up of transfer rates in CIS markets, it is important to have functionality of transfer rates modeling at such application. The module should be able to build yield curves by currencies and maturity baskets based on interest rates of bank own interest bearing assets and liabilities. This function enables bank's analysts to select the most optimal model of transfer pricing.
After the implementation of a such module a bank acquires an opportunity not only to calculate yield curves but also to determine desirable spread as well as has an opportunity to take a step forward in the market risk management and more effectively protect own interest margin. As a result, this will lead to an optimization of bank profitability.
Cost allocation application is a next important component of a management accounting profitability system. It allows costs allocation by main products' group and contracts. Exmacon has a deep experience in outsource development of such bank applications in CIS market.
Development of a bank strategy, definition of priorities and challenges are associated with an analysis of competitive environment. Strategic analysis must contain an analysis of competitors and their performance. Competitor Analysis Module gives banks such opportunity.
Based on available financial statements in module is conducted banks financial analysis and defines the place of a bank among competitors. Exmacon had used algorithms of banking industry analysis as a whole and algorithms for bank financial statement analysis based on the DuPont model. The advantage of а such module is the possibility to analyze the market share of banks in the retail and corporate sectors, as well as a share in the interbank market. Exmacon has experience in configuring banks' financial analysis based on the regulatory reporting of the central bank of Ukraine.