Design and implementation of a budgeting system for a commercial bank

BACKGROUND

Our client is a banking entity in Eastern Europe, known for offering a broad spectrum of financial services to both individual and corporate clients. The client needed a solution to effectively manage and optimize their enterprise’s financial performance, focusing on both enhancing revenue and controlling expenses.

CHALLENGES

  • Designing and creating a budgeting system for all core and supplementary budgets, such as OPEX, CAPEX, and more.
  • Acceleration of budgeting, negotiation and approval processes.
  • Scenario modeling and forecasting.
  • Exploring the possibility of correct budgets according to budget methodology.
  • Creating a system of analytical reporting: plan/fact/variance.
  • Training users to work in the system and providing support in day-to-day activities.

SOLUTION HIGHLIGHTS

  • Development of the solution architecture and its integration into the existing IT landscape, together with the methodologist and the bank’s IT team.
  • Implementation of a budgeting system using IBM Cognos Planning.
  • Realization of the main and auxiliary budgets calculations: operational activity budgets, non-operational expenses, capital expenses, etc.
  • Implementation of basic normative calculations, such as capital adequacy ratio, instant liquidity ratio, current liquidity ratio, ratio of operating assets to non-operating assets, ratio of non-operating expenses to operating profit.
  • Performance optimization of cubes.
  • User access rights management according to the bank’s policy.
  • Work with users — options for working with data both through an add-on in Excel and through the web interface.

KEY RESULTS

  • Transition from Excel planning to a full-fledged budgeting system.
  • Significant reduction of the budgeting process from months to 2 weeks.
  • Accurate scenario analysis and profitability calculation of banking products.
  • Control and monitoring of expense limitation and rationing in different fields, e.g. time, cost and profit centers.
  • Ability to modeling the optimal size of administrative and economic expenses, depending on the level of bank business activity and separate business directions.
  • Ensuring data security through the delimitation of access within the system.