Building a Basel II Business Information Model for Bank Austria
Bank Austria ranks among the three most important banking institutions in Austria. It has a dominant market position in Central and Eastern Europe and is a member of the UniCredit Group. Their challenge was to build a Business Information Model (or Business Data Model - BDM) that was also compliant with Basel II. Learn how Simplity helped them accomplish this large-scale task.
New standard solution for Group requirements
Bank Austria, a member of the UniCredit Group, has the strongest capital base amongst the banks in Austria, maintaining a network of around 300 branches throughout Austria with about 7,500 employees. In addition, it serves as UniCredit’s hub for the banking network in Central and Eastern Europe.
Due to the monolithic silos in the BI environment, the Bank was lacking the ability to support business needs and regulatory requirements in a timely manner. In addition, the Bank was facing high maintenance and operational costs, as well as data quality problems and consequent high risks.
Project in numbers
Build a new Business Information Model to standardize the Group’s requirements
The CEE headquarters within Bank Austria needed to address the issue of its limited ability to control and govern the subsidiaries, whilst the lack of support to deal with frequently changing requirements, so far handled by basic Excel sheets, resulted in extremely time-consuming report generation and expensive and inflexible data architecture. There was no standard solution for Group requirements such as Basel II Credit Risk, Market and Operational Risk, Bank of Italy Reporting, or ALM.
As a result, in 2007, Bank Austria created a roadmap to tackle these problems and launched an enterprise data warehouse (EDWH). As a first step, it conducted a divisional reorganization, based on UniCredit Group structures, and consolidated the core banking systems for Italy, Austria, and Germany under EuroSIG.
In parallel with this initiative, a Group standard single standardized data warehouse environment (GCD) for the CFO area was implemented as a basis for an integrated “single version of truth”. It would provide analytical data to CFO applications and serve as a data hub for CRO where integration or reconciliation of CRO calculations with CFO is required. The development of such a Group solution, with the support of country-specific environments (e.g. local data marts), required a well-defined collaboration model. Simplity’s consultants conducted a Business Information Modelling (BIM) project, which served as the central hub for requirements, specification, and testing, as well as an ETL framework to improve efficiency and quality in the distributed development.
Simplity provided a comprehensive range of consulting and technical services in the fields of workload and data analysis, process proposals, source-target matrix, communications with business users, and proposals and implementation of interfaces for controlling applications, Basel and statutory reporting, as well as data quality assurance.
The new, overall Basel II Business Information Model was highly effective in helping Bank Austria overcome their challenges
To accelerate the development of an urgently needed unified Basel II solution within their CEE business, a Basel II compliant Business Information Model (BIM) was implemented as a physical data mart and fed by an interim ETL layer (bypassing the integrated core layer). The modeled business data elements (BDEs) were used to define and raise data requirements towards the EuroSIG sources and served to identify existing, or helped build new, extraction interfaces to the integrated core layer and BI applications. This approach facilitated the provision of Basel II data to the Head Office in 25 data structures with around 500 attributes, that even with its huge complexity, was completed within eight months.
The harmonization of data provided a common understanding amongst business departments, creating a “single version of the truth”. Within the GCD project for Austria, approximately 200 business data structures with 5,000 business data elements were created. This consolidated source of data ensures consistency of reporting. The corresponding data is fed by around 250 source interface files from 70 systems and delivered through 142 output files, or tables, to nine external data marts (one of them being used for Basel II and regulatory reporting).
In addition, the data is available in a common access layer consisting of 131 structures, based on the BIM, supporting business in self-service data provisioning. By maintaining the references to data requirements and IT systems, Bank Austria can ensure consistency, enable traceability, and ultimately, improve data quality. This approach dramatically improves the ability to meet the needs of business when required and supports data governance processes.