Tackles operational efficiency and strengthens risk management
Read the article and learn:
- Why close partnerships are key to ensuring a successful transformation project
- Why growing reserves required higher operational efficiency and improved risk management at Thailand’s national bank
- How increased automation improves front office performance and risk management
About the author
Wongjan Sripaoraya has more than 20 years of experience in investment management and financial risk management. Wongjan started her career at Fuji Bank in Tokyo as a management trainee in 1995. She joined Bank of Thailand in 1997 and worked as Investment Officer, Reserve Management Section and Senior Risk Analyst, Financial Risk Management Section. She later spent two years with GIC in Singapore working as Senior Portfolio Analyst, Fixed Income Department. She joined two asset management firms in Thailand and later in early 2013 returned to the Bank of Thailand. Wongjan holds a Master of Science in Financial Engineering from Birkbeck, University of London and a Master of Arts in Business and Commerce from Keio University, Tokyo.
Increasing front office operational efficiency
Increasing front office operational efficiency
With Thailand forming one of the region’s most advanced emerging markets economies, the responsibility of managing Bank of Thailand’s growing reserves made us to take the decision to modernize and consolidate our systems to increase operational efficiency and improve risk management. The successful transformation project completes a vital component of our Corporate Excellence Strategy, created to deliver operational best practice. In this article, we share the story of how the bank became readied to adapt to changing regional market conditions and take on the exploration of global multi-asset investments.
The Bank of Thailand’s responsibility is to maintain financial stability by keeping inflation and exchange rates at appropriate levels for Thailand’s economic conditions. Other responsibilities include banknote circulation management, supervision of financial institutions and payment system, as well as financial consumer protection.
Maintaining financial stability includes managing foreign exchange reserves and conducting open market operations. At the Bank of Thailand, our dealing room system supports both of these functions.
As we have seen our foreign exchange reserves increase from USD 32 billion 20 years ago to over USD 220 billion today, we realized that we had a need to manage the fund and its reserves more efficiently, including adding more asset classes to our investment strategies. Furthermore, the higher level of reserves mean that we have an increasing demand for a holistic view, with improved risk management and real-time monitoring capabilities.
Preparing for future demands with a new system
So to help us operate more efficiently going forward, strengthen risk management and be able to execute global multi-asset investment strategies, we decided to look for a system that could meet these needs and also evolve with us. We wanted to ensure that the Bank of Thailand can scale and expand in terms of market coverage and be able to adapt to future market development, as we continue to operate in a more sophisticated investment environment.
Partnering up with the right vendor
After a thorough due diligence process, we decided for a front-to-back solution. Our close partnership and collaboration with the vendor, throughout, has been key to the success of both the implementation of the system and also achieving our vision for corporate excellence.
We have had great management support, both from our vendor and within the bank, which ensured the project was delivered both on time and on budget.
The benefits achieved in the front office and across operations
With amore granular and holistic view of our reserves, we are now more readily able to analyze and act on our data, and with greater governance. We are confident that the strong commitment we have placed on achieving operational efficiency will keep us on track and enable us to adapt to changing market conditions.
Since our recent go-live on SimCorp’s consolidated front-to back investment management platform, the Bank of Thailand has gained a number of operational efficiencies, including increased automation by 70% and 50% less spent on reporting. The new solution, which since July this year has managed the bank’s more than USD 220 billion in reserves, has enabled us to expedite critical workflows across reserve management and monetary policy operations, including reconciliations, pre-compliance checks and reporting.
Delivering on our Corporate Excellence Strategy
With Thailand forming one of the region’s most advanced emerging markets economies, the bank’s go-live on SimCorp Dimension completes a vital component of our Corporate Excellence Strategy, created to deliver operational best practice. With the transformation complete, the bank is now set with increased scalability and instrument coverage, two key elements in adapting to changing regional market conditions and the exploration of global multi-asset investments.
The go-live has tackled a number of operational challenges through automation and key operational achievements following the implementation include:
- Replacement of four disparate systems and over 10 manual Excel-driven processes, with one core multi-asset class platform for greater control and efficiency.
- A consolidated accounting general ledger, using one data set across both IBOR and the Accounting Book of Record (ABOR).
- Exhaustive global accounting coverage providing a consistent set of holdings, while supporting the bank’s highly customized general ledger and meeting Thai government Accounting Laws and Policies.
- Highly automated workflows minimizing the need for human intervention. This has reduced operational risk, generating more reliable and informed investment decision-making and has enabled the bank to redeploy its resources to more high-value, core-banking tasks.
- 70% increase of STP rate across operations
- 20% increase in rules automation, speeding up pre-compliance checks
- 50% less time spent on reporting
- Increase in number of daily reconciliations of portfolios and positions
We are proud that the completion of this integral implementation project sees the Bank of Thailand leading the way for our regional peers, consolidating the bank’s reserve and monetary operations and all invested asset classes, onto one core platform.
The Bank of Thailand’s success in achieving increased scalability and instrument coverage, key elements in adapting to changing regional market conditions and the exploration of global multi-asset investments, and its commitment to innovation, sees it being honored with the SimCorp Award, at this year’s SimCorp’s International User Community Meeting, in Amsterdam.