IBS Journal March 2015
Euroclear Finland in major technology overhaul
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Carty explains that T2S has been a major driver for modernisation efforts among CSDs, and Euroclear Finland saw the initia- tive as an opportune moment to upgrade its platforms. ‘T2S was a large driver for this given that we were operating two separate systems for fixed income and equities,’ he says. ‘We reviewed the sys- tems and determined that a replacement programme would be the most suitable option for the timelines that we had.’ The initial steps of the project date
back to 2012, when Euroclear Finland drew up its requirements and kicked off a selection process. ‘Our RFP process ran from November 2012 to February 2013. Then we had contract negotia- tions from February until April 2013. The actual project work has been quite quick, we managed to go live with an end-to-end retail CSD system in 22 months, which is quite an achievement,’ says Carty. TCS was selected from an orig-
inal list of five vendors, which was then whittled down to two at the final shortlist stage. ‘We spent a lot of time working with those two vendors and deciding on the pros and cons of each offering,’ recalls Carty. He remarks that ‘TCS had some good references in the CSD space that we did call, and is also engaged in another T2S implemen- tation project which is in wave three ahead of us’, which was why Euroclear Finland went this route. After finalising the agreements with
TCS, the project started with a detailed requirements phase. ‘We have sever- al suppliers involved, so it was impor- tant to bring the supply chain together in the requirements phases’, says Car- ty. Then there was a solution alignment phase, which was delivered from offshore in India, with the design and the testing also done there. ‘That was delivered back to us for system integration testing (SIT) in March/April 2014. We had to check our legacy systems, data warehouses and issu- er applications over the course of a cou- ple of months,’ says Carty. Finally, this was followed up with UAT, and then a market testing phase from August 2014.
6 Part of the project has been dedicat-
ed to the customisation of the Bancs plat- form, states Carty. ‘The standards that were meant for T2S are different to what has been done in the past, especially the har- monisation of corporate actions process- es according to ISO 20022 standards, for instance, so there were some changes to the software needed.’ He estimates that roughly 20 per cent of the vanilla software has been refined.
participants on the platform in a very struc- tured way’ to manage the complexity. Euroclear has opted to carry out the
implementation independently, with mini- mal external resources. However, Capgem- ini is one strategic partner, working on the installation of a new data warehouse built using SAP’s Business Objects. Carty stresses though ‘we are the best placed to oversee and referee the project. So the entire man- agement of the vendors, the service man- agement and the project management is with Euroclear’. Once fully live, the system will
support the full end-to-end cycle of securities processing, from accepting trades, settling trades, posting balanc- es, updating all the accounts as neces- sary and providing all the data required for the participants and counterpar- ties, including issuers. Carty sees the latter as one group in particular which will benefit from the Infinity project. ‘I believe that we provide a lot of new possibilities for our issuer community in this system, especially in phase two of the project when we focus on the equi- ties processes,’ he says. Euroclear Sweden looks like it too
Michael Carty, Euroclear
There has also been a process to
onboard the Euroclear Finland user com- munity to Infinity. Carty explains that Euro- clear has been ‘working closely with the market to explain all of the changes we were going to make, to provide them with the documentation they need for the spec- ifications of the messages they will send to us, the service descriptions for what we provide, and bringing them up to speed with training’. There is also oversight from the Bank of Finland, and a lot of stake- holders involved including the commer- cial banks, payments services providers and regulators, which has required a bal- ancing act, says Carty. He emphasises that ‘for the second release we will certify the
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will consider an overhaul of its soft- ware in the coming years, with discus- sions ongoing about modernising the infrastructure here. Riksbanken (the Swedish central bank and regulator) is thought to be giving consideration to joining T2S, which would necessitate
a more modern infrastructure. ‘We have a 25 year-old system in Sweden which is no secret, and there is a demand from the market to have something newer,’ says Car- ty. It may not be the last to do so either. ‘CSDs are realising the challenges to adapt fairly old systems towards the changes in the CSD space, it seems to be a constant wave of change at the moment,’ he muses. In neighbouring Norway, for example, the local CSD, Verdipapirsentralen ASA (VPS), has engaged with a regional software firm, Percival CSD Partners, to roll out a new core processing engine. ‘I think moving to more mainstream technologies with greater skill bases available is being looked at seriously,’ concludes Carty.
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