CASE STUDY
AlBaraka Bank , a provider of Islamic banking services , recently prioritised meeting the South African Reserve Bank ( SARB ) requirements . The bank recently modernised its core banking platform and consulted Synthesis to integrate this new system with the SARB through txstream which resulted in a streamlined reporting solution .
Challenge
Banks need to ensure that the correct information is submitted based on SARB requirements . This includes Balance of Payments ( BoP ) reporting on foreign currency trades to the SARB in a specified format to comply with Financial Surveillance requirements .
When AlBaraka began updating its core banking platform it needed to ensure that the new system integrated with the SARB and complied with local legislation .
The previous system that managed crossborder payments was run in-house by the AlBaraka development team . This system was time and maintenance heavy .
A streamlined and outsourced solution would ensure that the new core banking platform correctly integrated and maintained SARB standards .
“ The bank had a bespoke solution designed by a foreign vendor in order to meet the regulatory requirements . The challenge with that is that the bank had to understand the regulatory requirements and be able to provide the analysis of the data for vendor to develop the solution . The bank was unable to find an out of box solution at that point , making the exercise costly and resource intensive ,” said Mohammed Kaka , COO , AlBaraka Bank .
AlBaraka teamed up with Synthesis to manage this integration as the software development , digital solutions and regtech company is at the forefront of SARB reporting with over 20 years ’ experience serving the majority of South African Banks .
Kaka said the two main challenges the bank faced were the cost of the system and the resource requirements to maintain the system . “ The bank had to constantly monitor for regulatory changes , to ensure business and IT rules were up to date . By partnering with Synthesis , we handle the business compliance and Synthesis ensures compliance through technology ,” he said .
The solution
Synthesis implemented its BoP and txstream solution into AlBaraka ’ s core banking platform . This enabled AlBaraka to accurately report on all transactions to the SARB , simplify its deployment of consistent FinSurv rules throughout the bank and provide an application that allows for efficient storage , reporting and audit .
Kaka added that : “ Our core banking system was reaching its end of life . In line with the bank ’ s modernisation strategy , it needed a regulatory reporting system that was able to gel with the new system .”
Chris Assad , Business Development Manager , Synthesis , said in order to comply with exchange control reporting requirements in South Africa , AlBaraka Bank is obliged to enrich and validate transactions prior to the transactions being authorised on the core banking system .
Assad said using API technology , Synthesis was able to partner with its core system vendor in order to ensure that the BoP forms integrated into the transaction processing , thereby ensuring compliance with the regulations and streamlining operations and improving efficiency in the bank .
“ Synthesis was able to automate a number of processes with regard to our report services application system . Firstly , evaluation of transactions in an automated manner that stops manual decision making around whether a transaction is reportable or not . Secondly , validation of the transaction data to ensure the quality of captured data so that it complies with SARB requirements ,” he said . “ We simplified the payments process and regulatory reporting requirements , resulting in better overall compliance to the SARB rules .”
The rules-based approach of the solution validates the information against the SARB
OUR CORE BANKING SYSTEM WAS REACHING ITS END OF LIFE . IN LINE WITH THE BANK ’ S MODERNISATION STRATEGY , IT NEEDED A REGULATORY REPORTING SYSTEM THAT WAS ABLE
TO GEL WITH THE NEW SYSTEM . www . intelligentcio . com INTELLIGENTCIO
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