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CAPABILITY

The Oracle and Accenture Middle Office Product Control

An integrated approach from Accenture’s finance and risk capabilities and Oracle Financial Accounting Hub.

Overview

Financial institutions—faced with a lower return on equity and greater regulatory demands—have been forced to reduce their cost structure to help maintain profitability. To complicate matters, financial institutions often find themselves dealing with a costly, non-standard, and overly complex infrastructure, including multiple product sub-ledgers and general ledgers. In some cases the existing legacy infrastructure has not kept pace with trading processes and product development, leading to deficient platforms and offline manual processes.

Product control is the first point of entry to improve data accuracy and completeness for the finance and risk functions. Sourcing data once through a consistent framework simplifies processing and helps reduce complexity across finance and risk.

With these concerns in mind, Accenture and Oracle have developed an innovative approach: The Oracle and Accenture Middle Office Product Control. It combines the Oracle Financial Accounting Hub offering and Accenture’s finance and risk capabilities to help clients capture more value from their investment. Oracle Financial Accounting Hub acts as the contract sub-ledger or trade repository, as well as the accounting rules repository and the contract-level balancing and posting engine. This approach streamlines the product control function. It helps provide seamless, controlled, automated access to co-mingled trade and accounting data, automated desk versus ledger profit and loss (P&L) reconciliation, and adjustment capabilities.

DOWNLOAD: MIDDLE OFFICE PRODUCT CONTROL [PDF]

Why Accenture

Accenture’s Finance & Risk Services team has deep experience in shaping strategy and transforming the middle office, product control and finance functions.

Every financial institution has its own unique challenges and opportunities. The Oracle and Accenture Middle Office Product Control approach uses Oracle Financial Accounting Hub to provide a stable foundation for a broad product control framework.

The approach could be tailored to the client’s situation in the capital markets or banking space. It can leverage Accenture and Oracle assets and templates to accelerate the design approach, including proof of concept testing in lab environments with trade sub-ledgers configured for financial services clients. These assets, in addition to established deployment methodologies and architectures, can help clients realize near-term benefits while simultaneously establishing a strategic foundation for growth.

Specific Services

The Oracle and Accenture approach to product control provides key services including:

  • Helping banks drill down to detailed transaction data, data lineage and common data dictionaries.

  • Assisting in standardization and automation of product control architecture.

  • Improving data quality for liquidity and collateral reporting requirements.

  • Facilitating reconciliation between daily P&L and trade P&L, as well as between different GAAP (Generally Accepted Accounting Principles) representations.

  • Reducing adjustment processing for daily and month-end close.

  • Identifying intraday price/ valuation mismatches between T0 and T1 daily P&L using a single tool.

  • Providing near real-time visibility into intraday positions to enable more insightful trading decisions.

  • Generating controls and audit trail on price adjustments.

  • Delivering transparency into net cash from trading activity.

This approach centralizes and standardizes the product control function providing complete, transparent access to cross-asset class contract accounting and corporate accounting logic, together with an automatic reconciliation of the finance books and records. It utilizes a built-in common data model, including critical sub-ledger dimensions, which can integrate and consume data from a range of trading system data formats from a variety of vendors, making it possible to easily leverage existing systems and feeds. It also facilitates accelerated implementation with out-of-the-box account balancing and posting, using a pre-established business event model, and instrument accounting rules across asset classes.

DOWNLOAD: MIDDLE OFFICE PRODUCT CONTROL [PDF]