22.08.2019

How to migrate successfully from a legacy financial spreading application

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Capturing and spreading a borrower’s financial statement data is a key process in any commercial lending activity. Although this requirement is far from being new, several trends and market developments currently fuel the demand for new financial spreading software applications:

  • Spreading Automation: Manual data capturing and spreading financial statement should be enhanced by automation capabilities.
  • Integrated Solutions: Banks tend to replace isolated systems with comprehensive credit risk platforms that cover aspects, such as internal ratings, credit origination or early warning systems.
  • Adoption of Cloud / SaaS Solutions: Following a general industry trend, the demand for cloud-ready and SaaS-offerings is heavily increasing.
  • System Replacements: If a software platform becomes EOL (end of life), banks need to search for options to replace such legacy applications.

Key Considerations for Financial Spreading Replacement Projects

While the above trends sustain, there are questions that need to be addressed: What are the options for banks that want to modernize or replace their financial spreading tooling? What are the must-have functions and features that credit risk analysts require?

Here are a few dimensions and related questions that should be asked, when screening and evaluating potential options:

  • Vendor Experience: Does the software vendor have a track record in the financial services industry? Does the vendor serve other banks with financial spreading and credit risk management solutions?
  • Functional Coverage: Does the solution cover the key functional requirements for a financial spreading application, including but not limited to capabilities such as:
    • Manual data capture
    • Data import capabilities (e.g. XBRL)
    • Flexible calculation engine (e.g. financial ratios)
    • Custom accounts and ratios
    • Consolidation of borrower groups
    • Financial statement projection
    • Annualization / LTM calculations
    • Integrated reports
  • IT / Architecture: Does the solution cover key technical requirements of a modern and scalable application, such as
    • Cloud-readiness
    • Scalability
    • Security
    • Integration capabilities
    • High level of configurability

How to successfully perform historic data migration

Data stored in a financial spreading software are key assets for a bank and are subject to compliance obligations. It is therefore, a key requirement to extract, transform and load such data into any new spreading application.

ACTICO has developed concepts and technical capabilities for migration of historical financial spreading data. This includes a rule-based migration tool that sources the data from the legacy system’s database, applies transformation rules and loads the data into the new spreading platform. For those banks that have used spreadsheets for financial statement spreading, we have developed an Excel based bulk-import tool.

Would you like to learn more about our financial spreading software and migration capabilities? Please feel free to contact us.

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