Unique Counterparty Identification and Group Formation for Erste Group

Erste Group needed to create a central financial transaction system for the unique identification of counterparties and uniform counterparty group formation. Learn how Simplity helped them tackle this difficult challenge.

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Challenge

No single source of truth

Erste Group is one of the largest financial services providers in Central and Eastern Europe serving 15.7 million clients.

A consistent and holistic view of the customer is paramount to the success of any organization but increasingly difficult to achieve. Likewise, the unique identification of counterparties and groups of connected counterparties in Erste Group was only possible with high manual effort. This created material operational risk and serious challenges in meeting regulatory requirements.

Counterparty data was stored in multiple applications with little standardization and no single or golden “source of truth”. The responsibility for client data input and maintenance was highly fragmented and partially unclear. This created unnecessary data manipulation and reconciliation efforts in sales, risk management, and operations.

Project in numbers

Erste Group is one of the largest financial services providers in Central and Eastern Europe with branches in Austria, Czech Republic, Slovakia, Romania, Hungary, Croatia, and Serbia.

countries

2,700

branches

15.7million

clients

A consistent and holistic view of the customer is paramount to the success of any organization but increasingly difficult to achieve.

Objective

Central system for the unique identification of counterparties and uniform counterparty group formation

Customer master data should be maintained only by qualified and certified specialists, central review and approval workflows should ensure good data quality.

Another goal was establishing a new central shared service center for customer data management.

Solution

Erste Group decided to create a central system for the unique identification of counterparties and uniform counterparty group formation. Customer master data would only be maintained by qualified and certified specialists including a central review and approval workflow which would ensure good data quality.

As a group-wide project, the solution needed to deal with the specific constraints of all seven different countries served by Erste Group. As often in such settings, in the beginning there was no mutual understanding of key business concepts such as a legal entity, leading to confusion and threatening the whole initiative. The Simplity team helped in clarifying the business requirements and harmonizing the underlying data definitions.

The distributed setting, as well as dependencies to data-consuming Business Intelligence systems, imposed additional challenges. Simplity supported Erste Group in managing those internal and external relationships in an efficient way.

Throughout the project, various areas of improvement within and beyond the scope of customer master data were revealed. With the help of Simplity consultants, Erste Group managed to stay on target, avoid scope creep and finally achieve a successful go-live of the solution.

Benefits

The central uCOIN (Unique COunterparty IdeNtification) database allows the whole Erste Group to uniquely identify and manage legal entity counterparties and their ultimate beneficial owners (UBO).

This includes groups of connected customers (GCC) formation across countries and distribution of the data to local customer data solutions, as well as subsequent BI systems.

On top of the technical solution, a new central shared service center for customer data management was established and appropriate processes and operating models were set up.