Ambit BancWare AMBIT funds Transfer PerforMAnce ... - SunGard

AMBIT Ambit BancWare
Performance Management Funds Transfer
Pricing

Better analysis delivers better results. For competitive
organizations, funds transfer pricing (FTP) is essential to effec-
tive management accounting.

Integration throughout
all Ambit BancWare
solutions…

Effective FTP must be transparent, rational We recognize that FTP plays a pivotal role
and theoretically sound. It must consistently in pricing, business planning and risk man-
measure net interest income contribution from agement. That’s why funds transfer pricing is
an asset or liability over its entire life. It must embedded and integrated throughout
have the flexibility to be applied at the cus- the Ambit Risk & Compliance solution suite.
tomer account level, to facilitate evaluation of
products, customers, business units and other • Ambit BancWare Profitability provides the
views of the enterprise. And finally, FTP must ultimate multidimensional OLAP platform
be integrated within the performance report- for presenting and analyzing performance,
ing, planning and interest rate risk manage- including funds transfer pricing results
ment of the organization. and the funding center mismatch. Pro-
forma FTP is also integrated with the Ambit
SunGard’s Ambit BancWare Funds Transfer BancWare Relationship Manager, so you can
Pricing provides financial institutions with the view the current profitability of a customer
most effective decision-making platform for relationship, and effectively model and price
customer, organizational and product profit- new business. With full-life key performance
ability, product pricing and balance sheet and indicators, rather than historical or snapshot
resource allocations. By transferring funding views, you’re able to make more informed
risks to those who manage them, business and better business decisions.
managers can focus directly on what they con-
trol – pricing and profitability. • Ambit BancWare Data Integration FTP cal-
culates and assigns FTP for all existing busi-
Ambit BancWare FTP ness at the transaction level.
provides:
• Ambit BancWare ALM and Ambit
• 100% confidence in source data with BancWare Budgeting & Planning with pro-
full audit trails forma FTP calculates FTP for all new busi-
ness forecasts and blends the FTP rates for
• Unlimited, fully flexible transfer pricing new business with existing business.
methodologies
• Ambit BancWare ALM OAV@R determines
• Total user control for a hands-on process Option Adjusted FTP Spreads by modeling
an instrument’s unique behaviors for multiple
• Crucial profitability information essential rate paths.
to making product pricing, balance sheet
allocation, and compensation decisions Ambit BancWare FTP extracts as much of the
available financial information from accounting
• Pro-forma FTP for budgeting & planning subsystems as is relevant to the funds transfer
pricing process. Any data deficiencies
• Historical transfer prices and spreads as a are addressed directly by finance person-
resource for performance reporting, nel as data is collected, and enhanced using
planning, budgeting, and control functions finance-specific algorithms to supplement
throughout the institution missing origination or repricing dates, original
balances, payment amounts, or other material
• Extensive, comprehensive reporting inputs.
capabilities including Web delivery

• Stochastic analysis providing Option
Adjusted FTP Spreads

Hundreds of Ambit BancWare ALM and
Methodologies Available Ambit BancWare budgeting &
planning with pro-forma FTP
Ambit BancWare FTP’s sophisticated feature
functionality provides you with the flexibility Ambit Risk & Compliance solutions compre-
to… hensively model future financial statements,
allowing you to evaluate and change assump-
• Select from any number of FTP rate tables tions for future interest rates, prepayment
for yield curves and indexes rates, new volumes, spreads, and many other
drivers of risk and performance.
• Assign different FTP curves for assets and
liabilities Data for existing business is created and
processed using Ambit BancWare Data
• Support multiple currencies Integration and is seamlessly fed into the
model as the starting point for this analysis
• Calculate the FTP rate based on: – including FTP rates associated with each
planning account. Pro-forma FTP allows users
- Assignment of an index to transfer price new business throughout the
forecast horizon, and blend this with the FTP
- An explicit yield curve point rates associated with existing business. Thus,
business planners can more effectively fore-
- Cash flows until repricing or maturity cast their controllable contribution to profit-
ability – new volumes and spreads.
- Time-weighted cash flows until repricing
or maturity Budgets and forecasts of interest income
and expense, and the subsequent analysis of
- Computed duration variances, become powerful tools, because
the components of spread actually earned
- A rate given in the application subsystem on individual positions can be compared
to the forecast spreads. Ambit BancWare
• Calculate FTP based on original contract Performance Management users have
assumptions or on current state assumptions successfully employed this type of analysis to
focus managers’ attention on increasing profit
• Assign prepayment behaviors to the trans- margins and total profits, rather than simply
action level and/or calculate a “break-fund- on growing volume.
ing” charge or credit when an instrument is
deemed to have prepaid Funding Center Mismatch Summary

• Create alternative transaction behaviors by Jul-05 Assets Sep-05 Liabilities and Capital
overriding the recorded characteristics of an Aug-05 Jul-05 Aug-05 Sep-05
instrument. This facilitates modeling cash flows -2.22% -2.2-%
for non-contractual maturity loans or depos- Base Funding Rate -0.19% -2.21% -0.20% 2.19% 2.20% 2.23%
its. Term (Liq) Funding Addon Spread -0.04% -0.19% -0.06% 0.17% 0.16% 0.17%
Options Funding Addon Spread 0.00% -0.04% -0.02% 0.00% 0.00% 0.00%
• Determine multiple FTP rates for each Prepay Penalty Addon Spread 0.00% 0.00% 0.00% -0.01%
transaction, to:
3.00%
- Model “tranches” of behaviors for blending
to an FTP rate PrePay Penalty 2.00%
Addon Spread 1.00%
- Break out the funding risk components
(such as rate risk, term/liquidity risk, Options Funding 0.00%
options risk, basis risk) Addon Spread

- Measure and present to management the
impact of FTP methodology changes that
are being proposed

• Assign Option-Adjusted FTP Spreads
calculated in Ambit BancWare ALM OAV@R

Term (Liq) Funding -1.00%
Addon Spread

Base Funding Rate -2.00%

-3.00% Jul-05 Assets Sep-05 Liab and Capital
Aug-05 Jul-05 Aug-05 Sep-05
Assets
Liabilities and Capital

Extensive analytic capabilities enable easy creation of polished
reports, and ability to drill into the details.

Why Choose AMBIT BancWare Funds

Transfer Pricing?

Ambit BancWare FTP offers unmatched funds FTP facilitates the evaluation of products, cus-
transfer pricing functionality for financial insti- tomers, business units and other views of the
tutions. With Ambit BancWare FTP, banks financial institution. Fully integrated with other
can transfer price all financial instruments – Ambit Risk & Compliance solutions, Ambit
particularly important when transfer pricing BancWare FTP allows for more efficient use
instruments with complex attributes, behaviors of data, and faster, more complete analytic
and cash flows. By applying transfer prices at cycles that drive better decision-making.
the customer account level, Ambit BancWare

Flexibility Comprehensive instrument
coverage
Transfer priced data is available from Ambit
BancWare FTP at any level of detail necessary Ambit BancWare FTP lets you accurately
to support analysis and reporting in a variety transfer price all of your financial instruments
of formats. Data can be fed to other systems – even the most complex, including loans
through an ODBC link, and a flexible report with prepayment assumptions and/or peculiar
writer enables numerous reporting options. cash-flows, tranches of non-maturity liabilities,
complex leases, preferred stock borrowings,
performance asset securitizations and other unique sources
and uses of funds.
Working efficiently is the key to working
smart. With some vendors, calculating FTP Empowering the Financial
is inflexibly tied to market value and income Analyst
simulation. With Ambit BancWare FTP, funds
transfer pricing calculations can be unbundled Allowing financial data conversion to be man-
and run separately for faster results. Or, you aged by the financial analyst dramatically
can choose to calculate option adjusted FTP, reduces the burden on overextended informa-
depending on your unique needs. Calculations tion technology resources for custom extracts
can be performed on millions of transactions and special programming, and keeps the pro-
quickly and accurately, giving you the flex- cess where the relevant expertise resides –
ibility to do more complex analysis (calculate within the finance department.
multiple rates, use multiple curves, etc), while
saving valuable time.

Full Control

Ambit BancWare FTP enables complete con-
trol over the calculation and assignment of
funds transfer prices. This control includes the
ability to specify complex conditional logic for
selecting how and which rates will be applied
to each customer account or user-defined
aggregation (pool).

Proven Record of Customer Support Excellence

Delivered and supported by a team of and support team is always available to pro-
experts, SunGard provides consistent, predict- vide training, customization, and risk manage-
able implementations “on time and on bud- ment consulting.
get.” Moreover, our highly trained consulting

INTEGRATED RISK AND PERFORMANCE SOLUTIONS

A leader in risk management, Ambit Risk & and allows decisions to be driven by com-
Compliance solutions offer scalable technol- mon strategy and assumptions. Ambit Risk
ogy and proven solutions that help financial & Compliance solutions can integrate critical
firms effectively measure and manage risk, financial management systems, giving you the
forecast balance sheet performance, meet power to share comprehensive analytics, deci-
regulatory requirements and make critical sion-support and performance measurement
business decisions. Our modular, integrated at all levels of your business.
solutions for asset/liability management,
profitability, strategic planning, credit risk, With over 25 years of banking technology
operational risk, economic capital and regula- experience and more than 500 clients in more
tory compliance provide a complete picture than 40 countries, Ambit Risk & Compliance
of your banking business. A unified view of solutions deliver high-caliber, actionable intel-
risk and performance measurements across all ligence to meet the specific needs of financial
activities and markets drives greater under- institutions – both large and small.
standing of your complete financial picture

about sungard

With annual revenue of $5 billion, SunGard is a global leader in software and processing solu-
tions for financial services, higher education and the public sector. SunGard also helps infor-
mation-dependent enterprises of all types to ensure the continuity of their business. SunGard
serves more than 25,000 customers in more than 50 countries, including the world’s 50 largest
financial services companies.

about AMBIT

SunGard’s Ambit is a banking solution suite for retail, commercial and private banks. It provides
banking professionals with solutions that support front-, middle- and back-office operations, as
well as solutions for financial management, risk and compliance. Ambit helps banks improve
customer service management, streamline business processes, comply with regulations and cap-
ture growth opportunities. For more information, visit www.sungard.com/ambit.

www.sungard.com/ambit

For more information contact us at [email protected]

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