Bank of Ireland

Background

Bank of Ireland Global Markets, with offices in Dublin, London, Bristol and Stamford Connecticut, provides Treasury and Risk Management services to the entire Bank of Ireland Group. Its worldwide Trade Operations and Risk Management functions are located within its Dublin offices. 

In 2001 Bank of Ireland Global Markets embarked on a significant Change Program to transform its operational environment. A component of that was the introduction of an enterprise middleware infrastructure to allow straight-through processing. A key concern that emerged following its introduction was how the business could effectively manage the complete trade-lifecycle flows across multiple processes in a geographically dispersed, real-time, distributed application environment.

Bank of Ireland Global Markets goal was not to engage in a large BPM project but to seek to implement, in conjunction with the existing transformation projects, a solution which would quickly address the above concerns but also allow for the ongoing delivery of business efficiencies and enhanced operational risk management.

In 2003, initial discussions with PaceMetrics centred on a number of key issues, in particular the transparency of business flows across multiple business functions, the identification of business process gaps and the improvement of operational efficiencies in the Back Office, the management of Operational Risk and positioning the Bank to meet the regulatory and compliance requirements of Basel II.

It was agreed to implement a Pilot Project to demonstrate how the PaceMetrics solutions could:

• be implemented through non-intrusive integration with existing/new in-house/third-party applications
• deliver functionality without degradation of performance
• give management a real-time Dashboard of the overall transaction flow  across multiple business functions
• identify gaps in the existing business processes and procedures
• provide real-time trade capacity/volume planning
• alert business functions to missing or delayed transactions
• improve staff productivity by flagging transactional errors in real-time
• improve the efficiency of exception resolution
• provide better Customer Service 
• gather and analyse the data necessary to meet Basel II and other regulatory requirements

The pilot ran for 4 week period and quickly demonstrated the benefits of the PaceMaker system.

Full rollout began in January 2004, with final sign-off in March 2004. Subsequent phases would continue to deliver improved operational efficiencies and control.

Implementation

The PaceMetrics Professional Services team deployed monitors initially in the most critical areas i.e. the trade life-cycle and the inter-application communication. This immediately provided real-time end to end control and full transparency into every transaction with no impact on system performance.

Over time, these rules were expanded and enhanced to give ever increasing insight into, and control of, the overall process. The business logic covering different transaction types was defined using the Rules Engine. Here, it was essential to recognise the sub-components of each transaction as they were being processed by the various sub-systems. A useful by-product of this exercise was the identification of business process gaps which were highlighted by the surprising areas where exceptions were arising.

An intuitive Dashboard displayed a traffic light system to gave instant visual warning of any transactions that had failed or were about to fail, so that the team could respond systematically and logically. Where appropriate, customers could be advised as the exception was passed to the Exception resolution module of PaceMaker. Fire-fighting was eliminated and staff could instead concentrate on more productive work.

Now all authorised team members had a holistic view of the entire process, with multiple disparate systems pulled together into one logical view. Managers could keep an eye on the ‘big picture’, while Operations staff gained detailed views into the process, based on their roles and responsibilities. Bottlenecks were identified in time to be managed, which significantly enhanced the transaction flow as payment cut-off times approached.

Exception resolution is automated wherever possible, although in some cases, manual resolution is appropriate. In either event, PaceMaker also monitors the progress of resolution. Using workflow, exceptions are resolved by a series of pre-defined methods – escalation via email, alerts to predefined roles and people etc.

An important component of the Bank of Ireland solution is the Operational Event Store (OES). This is a database of all transaction processing statistics, transaction details and resolution history. In addition to providing a comprehensive source for documentation and reporting purposes, the OES provides valuable information for on-going process improvement and operational risk management. A number of reports were generated from this store identifying “out of the ordinary” transactions and activities.

Benefits

The PaceMaker implementation has successfully addressed the original project objectives and Bank of Ireland’s expectations have been met and surpassed. After four years in use, the system has been extended to cover additional products and has led to a marked increase in Back Office productivity, a substantial reduction of costly and time consuming errors, delays and risks. The Operational Risk Managers enjoy the benefits of documented rules and processes and can easily demonstrate their compliance with in-house and regulatory requirements.

Lorcan Connolly, Director of IT at Bank of Ireland Global Markets: “With the PaceMetrics solution in place, we now have a critical, real-time life-cycle view of our overall trade-processing operations, yet there is minimal impact on our existing systems.