RESEARCH & RESOURCES

CASE STUDY - IXIS Accelerates Profit and Loss Analysis

Commentary by Damien Le Marchand, Project Manager, IXIS CIB

For the investment bank IXIS CIB, a subsidiary of the third largest banking group in France, the process of calculating its profit and loss (P&L) on a daily basis involves analyzing 300 million transaction lines.

Until recently, IXIS CIB used a reporting system designed solely for trading floor operators. This system relied on both a production database and an information database. Both of these were transactional management databases.

“We carried out batch loading from the production database to the information database. Requests from traders were made alongside this transaction processing, which could cause performance problems. With the growing complexity of analysis required by traders, loading times increased to four hours. Due to these constraints, background history was gradually reduced to a period of no more than six months in the production database and 15 consecutive days in the information database,” explains Damien Le Marchand, project manager at IXIS CIB. The huge volume of processing together with peak loadings caused bottlenecks and affected response times. Complex requests could take up to three hours.

To better support the activities of its risk managers, the bank realized it needed a more efficient and scalable system—a system that would enable it to reconcile P&L and accounts. The new system would have to combine P&L lines, the dynamic risk parameters in each portfolio, and cash flow, which meant the target system would need the capacity to handle much larger data volumes and a constantly increasing number of requests.

Evaluating Alternatives

IXIS CIB identified two ways to address this challenge. One involved reviewing working patterns and changing operational procedures. The second involved consolidating all transaction data into a central information database, isolating reporting and analysis from transaction processing. The key to making this second method work was the ability to deploy a robust, high-performance data management system with the capacity to scale as data storage requirements increased, and to expedite loading and response times regardless of the number of users and the complexity of requests.

IXIS CIB chose the second way and found its data management solution in the Sybase IQ analytics server. After achieving positive results in testing, the bank began to integrate P&L lines and the dynamic performance indicators coming from front-office trading applications, namely Summit for fixed-income and foreign-exchange business, and Calypso for credit derivatives and complex rates, in total representing 300 million lines.

The project went live within a month thanks to support from Sybase Professional Services, which facilitated the porting of the previous central information database to Sybase IQ and the transfer of skills to the P&L IT team.

A future phase will integrate two other front-office applications: Sophis for shares and ACBS for financial accounting and cash flow lines. All data will be available through Business Objects reporting tools via an intranet.

By separating out the transaction processing database, we’ve achieved response times that are between 10 and 20 times faster than our earlier system.
Damien Le Marchand, IXIS CIB

 

Sybase IQ Delivers in Real Time

Thanks to Sybase IQ, transactions from the previous day are available to trading operators and risk managers before the markets open, with load times reduced to 30 minutes. Sybase IQ provides risk managers with both the speed and the detail to allow them to complete their tasks successfully by zooming right in on the minute details of each transaction. This has all been achieved without impacting database availability or performance.

“By separating out the transaction processing database, we’ve achieved response times that are between 10 and 20 times faster than our earlier system. Responses do not exceed four minutes, even for the most complex cases,” says Le Marchand. The speed of processing calculations that are linked with the central information base, which consolidates all transactions and cash flow lines, now provides full visibility of trading results the following day. Moreover, daily consolidation gives the accounts department access to data following the close of each day’s trading, allowing it to meet the reduced 15-day reporting cycle required to comply with the IFRS standard.

The bank has also realized IT cost reductions, which by themselves constitute an impressive ROI.

This article originally appeared in the issue of .

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