Archive for October, 2014

Recent Banking regulatory news.

October 31st, 2014

The videos below from PWC provide an interesting insight into the current status and future direction of banking

Learn more at –
“Powerful forces are reshaping the banking industry, creating an imperative for change. Banks need to chose what posture they want to adopt – to lead the change, to follow fast, or to manage for the present. Whatever their chosen strategy, leading banks will need to balance execution against 6 critical priorities and have a clear sense of the posture they wish to adopt. However, each of them is important, and success will come from a balanced execution across these priorities — and a balance of tactical initiatives and longer-term programs, all coming together as an integrated whole.”

Banking Banana Skins 2014 Overview

Regulators want to ensure that banks, implement effective corporate governance. The scope of corporate governance to address has increased exponentially The separation between ownership and control in firms could result in managers exploiting corporate assets for their own individual interests.”

In the mid-1900s Legislators introduced a wave of corporate governance regulations to mitigate risk with new requirements for the role of the board overseeing the firm’s business strategy and financial soundness, key personnel decisions, internal organisation, governance structures and risk management practices. So long as boards did their job, it then seemed that investors would be protected.

Now a bank’s corporate governance has to protect against all the risks that bank’s business may experience. and there is zero tolerance of a bank’s failure to manage its risks. Not to mention adverse negative media attention and steep regulatory fines. The fallout of the 2007 financial crisis, perhaps overlooks the risks inherent in a bank’s business model – with governments, regulators, investors and customers all demanding change.

New laws impose more stringent requirements and intensified scrutiny and pressure from regulators. Significant problems remain. The Financial Stability Board (FSB) has asserted that much more work is needed to “establish effective risk governance frameworks” (2013).

The Basel Committee on Banking Supervision (BCBS) recently revised its Guidelines Corporate governance principles for banks on 10 October 2014. This further raises the standards in corporate governance at banks and emphasizes the critical role of the board and its risk committees in ensuring a bank’s risk governance.

The BCBS suggests that boards should be more involved in “evaluating and promoting a strong risk culture in the bank” by setting the banks” risk appetite and overseeing the implementation of this. The increased focus on risk and the supporting governance framework includes identifying the responsibilities of different parts of the bank for addressing and managing risk. These areas are often referred to as the “three lines of defence”:
– business units
– risk management function
– internal audit.

Regardless of the structure, responsibilities for each line of defence should be well defined and communicated and supported by the board.

Managing risks includes identifying, assessing and reporting such exposures, taking into account the bank’s risk appetite and its policies, procedures and controls. The manner in which the front line a business unit executes its responsibilities should reflect the bank’s existing risk culture—in a top-down fashion directly aligned to the approach set by the board.

An effective risk management function complements the business unit’s risk activities by monitoring and reporting against responsibilities. Among it is responsible for overseeing the bank’s risk-taking activities and assessing risks and issues independently from the business line. This requires an independent and effective compliance function responsible for routinely monitoring compliance with laws, corporate governance rules, regulations, codes and policies to which the bank is subject. The function must have sufficient authority, stature, independence, resources and access to the board.

An independent and effective internal audit function . should “provide independent review and assurance on the quality and effectiveness of the bank’s risk governance framework including links to organisational culture, as well as strategic and business planning, compensation and decision-making processes”. The board should ensure that the risk management, compliance and audit functions are properly positioned, staffed and resourced and carry out their responsibilities independently and effectively.

Effective internal corporate governance provisions doesn’t just benefit small stakeholders. Ensuring effective oversight of managerial actions should result in lower equity and debt capital cost for the bank, a reduction of labour costs and higher value in products and services from clients but it also poses many challenges for the banks and their regulators. . Complexity can take many forms such as the evaluating the quality of a bank’s loan portfolio or ascertaining the importance of off-balance sheet operations. The BCBS’s revised principles provide a framework within which banks and supervisors should operate to achieve robust and transparent risk management and decision-making and, in doing so, promote public confidence and uphold the safety and soundness of the banking system.

EU banks s(bar Italy) stood-up pretty well to the EBA’s stress test. Only 25 failed (CET> 5.5%) from the 130 banks tested. About half of those had already taken actions to remedy their alleged failings, .

So outside of Italy, EU banks should be more confident to lend again and rebuild their damaged balance sheets.. Banks will eventually have to open their cheque books and start lending again. Moreover, the Banking Union will further break-down barriers to cross-border lending within the Eurozone. Banks will no longer have any endogenous constraints to lending in any Eurozone country.

External constraints still need to be considered. The Eurozone economy is on the verge of tipping into its third recession in only six years. The Eurozone is “marching towards stagnation and deflation” according to the Economist (25 October 2014). A large portion of its private sector is actually minimising debt instead of maximising profits following the housing collapse in the 1990s, to repair their balance sheets. This deleveraging reduces aggregate demand and throws the economy into a very special type of recession. There are signs that the EU may be suffering from a similar fate to Japan.. Governments and central banks don’t have any easy solutions to put things right again.

Other financial institutions are considering taking a larger slice of the credit market. Insurance firms provide one option – they take in more than €1 trillion in premiums each year. As with the banks, new rules will force insurers to hold more capital than before against corporate loans. Equity investment or debt finance from asset managers and other shadow bank players are also increasingly another option for obtaining credit. Regulatory action to facilitate some types of credit is also being considered. For example, the EBA is seeking views on what is required to simulate a “prudentially sound securitisation market” with a view to “widening long-term funding opportunities for the European economy”. It

The EBA published its Work Programme 2015 on 10 October 2014 (dated 30 September 2015). Drafting regulatory and technical standards on CRD IV, BRRD and the revision of the Deposit-Guarantee Schemes Directive will take-up the majority of the EBA’s workload in 2015. The EBA also expects to contribute to the various legislative processes (e.g. shadow banking), monitor implementation (e.g. CRD IV), calibrate rules (liquidity and leverage ratios) and develop various ad-hoc reports (e.g. Bitcoin).

The FSB revised its Key Attributes of Effective Resolution Regimes for Financial Institutions (Key Attributes) on 15 October 2014,to incorporate recently published guidance on the resolution of FMIs and insurers, client asset protection and information sharing. The FSB also published Guidance on Cooperation and Information Sharing with Host Authorities of Jurisdictions Not Represented on CMGs where a G-SIFI has a Systemic Presence on 17 October 2014.

The ECB will take over responsibility for prudential supervision of Eurozone banks from 4 November 2014. This change represents a significant milestone in the evolution of EU banking regulation.
Also, on 20 October 2014, it published a Decision of the European Central Bank of 17 September 2014 on the implementation of separation between the monetary policy and supervision functions of the European Central Bank (ECB/2014/39). The decision sets out the ECB’s arrangements for complying with the separation of the monetary policy function from the new supervisory function under SSM. It outlines arrangements related to professional secrecy and the exchange of information between the two functions. The decision will enter into force on the day of its publication in the Official Journal.

Further to our recent meetings with many banks at Gitex. We will be hosting BRSAnalytics principals and software authors, Computime and holding a series of meetings and proof of concepts with local banks in mid November. Meet with our expert team and understand how the purpose designed data model and regulatory processes built into BRSAnalytics proven in many bank over over the last 8years, can help you comply with current and future regulatory compliance with a rapid implementation. Slash reporting time, and cost and risk of error and relax in the knowledge of expert local support that will keep reports current with Central Bank requirements.

Call us on 0097143365589

Dubai trams-take care.

October 28th, 2014

Stiff penalties await motorists who disobey new rules governing traffic on roads shared with Dubai Tram, the Roads and Transport Authority (RTA) has warned.

New signs and pavement markings have been put up along the 10.6 kilometre tram network ahead of its November 11 opening.

RTA has urged motorists as well as pedestrians to learn and to understand the signs before they use roads shared with Dubai Tram.

Where the routes of the Dubai tram and other vehicles intersect, the tram will have priority. Vehicular traffic from all directions will stop whenever trams cross the intersections, as the trams will have right of way. It is important for motorists not to block these box junctions!

The trams pass through at least 30 junctions, crossings and intersections starting from Dubai Police Academy in Al Sufouh to Dubai Marina and Jumeirah Beach Residence.
Each tram will have capacity for 405 passengers on seven coaches. It will operate for 20 hours a day, from 5am to 1am.

The signs and markings applied on the road as part of the Dubai Tram project have not been used previously on Dubai roads. . People should be extra careful when they drive or walk on roads and pavements that share space with trams.

Failure to obey a regulatory sign, unless directed otherwise by a traffic officer, constitutes an offence and is punishable by law. RTA has announced huge fines for various offences related to disruption of tram movement, ranging from Dh2,000 to Dh30,000. Among the biggest offences is jumping the red light at a tram intersection and causing a fatal accident. This offence could lead to a fine in the range of Dh10,000 to Dh30,000 along with suspension of the offender’s driving licence for up to one year.

Apart from road signs, there are several regulatory pavement markings that are unique to areas where the tram operates. The display of a regulatory marking on its own is sufficient to establish a regulatory condition and does not require a supportive regulatory sign to give effect to the regulatory message of the marking. Disregard for a regulatory pavement marking constitutes an offence and is punishable by law. Examples of regulatory markings include zigzag lines where stopping a vehicle or changing lanes is prohibited at all times. Other pavement markings include yellow and white zebra crossings on tram tracks that are not controlled by traffic lights, and raised speed humps.

The new Dubai tram system will be surrounded by 64 new speed cameras to slow nearby motorists – 150 traffic officers will also be deployed to monitor traffic at tram intersections.

Driving schools have introduced mandatory classes to teach students how to interpret the signs and to avoid accidents while sharing the road with the tram

Bank Regulatory Reporting update – Middle East – October 2014 – Synergy Software Systems

October 26th, 2014

The importance of transparency in bank reporting was the subject of an extended article in Gulf News. “In a recent discussion paper, it is appropriate and long overdue that the Basel Committee on Banking Supervision recognised the need to incorporate the accounting, non-risk weighted leverage into the framework of assessing capital adequacy. “
Dr. R. Seetharaman, Group CEO, Doha Bank spoke at the fifth US- MENA Private Sector Dialogue on correspondent banking, which was hosted by the Union of Arab Banks at BNY Mellon, New York on 14th and 15th October 2014
I the session “Customer risk ratings and evolving nature of financial crime” he said that Banks should strengthen their fight against financial crime to protect against reputation risks. Dr. Seetharaman also gave insights on current trends in Correspondent Banking. “Banks have looked forward to scale their vast Correspondent Banking networks to reduce risks and strengthen controls, expand their client coverage and geographic reach by striking up new banking partnerships. However with the onslaught of new financial regulation banks need to reassess and redefine this business. With banking revenues under pressure, many banks are questioning whether they can continue to try to offer all services to clients in all markets, combined with rising costs related to new regulations. Banks are selectively increasing the global banking partnerships. … After crisis, letters of credit re-emerged as the key solution for alleviating the spike in credit risk concerns. During the financial crisis, it was correspondent banking, which played a pivotal role as many global banks retreated towards their home market, leaving constraints in trade funding and risk mitigation. Local banks became vital, both for local corporates and their international trading partners. When it came to securing the handling of trade flows despite a spike in perceived risks during the crisis, local banks proved that their knowledge of local companies was critical to keep trades flowing.”

Dr. Seetharaman also gave his views on the regulatory focus on correspondent banking. He said “Regulators continue to scrutinise due diligence and risk management practices in the Correspondent Banking arena due to the inherent risks associated with processing transactions as well as cases in which Correspondent Banking accounts have been used to move illicit funds. Recent regulatory actions have resulted in record-breaking financial penalties and have highlighted the vulnerabilities which financial institutions are exposed to when there are failures in in the areas of governance, client due diligence, risk assessment and transaction monitoring.“

Dr. Seetharaman further highlighted recent Financial Crimes, and AML lawsuits faced by financial institutions. “Certain banks failed to conduct basic due diligence on some of its account holders, assign the appropriate risk categories and ignored warnings that monitoring systems are not adequate. Violation of Know Your Customer (KYC) norms also exposed them to fraud risks. Certain banks failed to check and monitor the relationships its corporate customers had with politically exposed people. Some banks failed to identify high risk transactions. Financial crimes have increased the penalties for banks and also affected the reputation risks.”

Islamic Banking continues to grow in the region but what exactly is it?
You will find a lot of useful information on this portal. Islamic Finance News Portal – Bringing you the latest updates in global Shariah finance
The 4th Annual World Islamic Retail Banking Conference was officially inaugurated this month with more than 150 delegates – The conference started with a panel discussion outlining regulatory changes and the impact those will have on retail banking.

In the USA On October 17th the Federal Reserve Board (FRB) released instructions and guidance (Guidance) for CCAR 2015 and finalized amendments to the Capital Plan rule, providing more clarity . Modifications to the Capital Plan rule are consistent with the June proposal, and the Guidance provides additional information on content and the organization of capital plan submissions. The Guidance’s focuses on: internal controls, model inventory, risk identification, and organization

This indicates both that the FRB’s emphasis is now moving from quantitative to qualitative judgments and that the regulators’ expectations continue to rise and this is likely to reflected in this region’s regulatory authority focus. Some key points
Completeness in risk identification is key.
Documentation for internal controls –increased expectation.
Methodology and model inventory must be mapped to FR Y-14 and be subject to internal audit.
This follows on form September when, the Office of the Comptroller of the Currency (“OCC”) finalized its risk governance framework for large banks and thrifts (“Guidelines”) that was proposed in January 2014.

The responsibility to oversee risk management in the USA clearly remains squarely with the Board of Directors, which retains the ultimate risk governance oversight role. The Guidelines clarify that the Board need not take on responsibility for day-to-day managerial duties. This however require consideration of risk appetite and risk profile, lines of reporting, talent management training and retention, regulatory reporting systems – robustness, ease of use, auditability, adaptability and scalability etc..

You can register now for our next free seminar on Bank Regulatory Reporting to be held at Microsoft Gulf, Offices, DIC during the morning of 17 November 2014


Islamic liturgical year 2014

October 23rd, 2014

The month of Muharram marks the beginning of the Islamic liturgical year and we can say “Happy new Year”. The Islamic year begins on the first day of Muharram around the World and it is observed around the World. It is counted from the year of the Hegira (anno Hegirae) the year in which Muhammad emigrated from Mecca to Medina (A.D. July 16, 622).

The crescent Moon may be visible a day or so after the new Moon, but weather and other factors may delay the sighting. This year it is anticipated for Saturday, and if that is the case, then Synergy’s offices will be closed for the day.

BI4Dynamics – new release. Wow! Ask Synergy Software Systems

October 21st, 2014

Biggest BI4Dynamics release in the history includes:
• Smartest self-service Cube Wizard in the market
Easily create custom cubes in 4 simple steps. Download the Manual and watch How to Videos.
• BI4Dynamics SQL framework refactored and upgraded
o Improved performance (30 to 50% performance improvement with incremental processing).
o Faster and easier custom development (more than 50% less custom code needed when creating new modules).
o Improved logging in the SQL framework (more detailed execution information for each procedure are available).
o Easier debugging of incorrect data in custom development (data references that connect fact and stage records have been added).
• NAV2013 R2 multitenant and NAV 2015 support
• SQL Server 2014 support
• Log window improvements
Better and easier tracking of log entries

Note: BI4Dynamics v4 and v5 can run simultaneously in separate folders.

And of course you still get prebuilt dashboards and reports and direct access to your data for ad hoc reports and inquires from Excel -just pick the fields you need – tis that easy and very fast because the KPIs and total and summary calculations are already defined and processed in the underlying data warehouse. No other BI solution implements a s fast and no other provides anything like the same prebuilt content.

If you are either a Dynamics Nav partner, or a Customer then contact us – you must take a look.

Special cube and report pack also for NAV Retail.

Dynamics Ax ? Yes BI4Dynamcis is also available and updated content packs for 2012 R3 will be released shortly.

Ask about our special post Gitex offer. Invest in BI4Dynamics with us and also get a free training place on our 2 day Management Reporter course in November.

Credit reporting in the GCC

October 20th, 2014

Marwan Ahmad Lutfi, CEO of Al Etihad Credit Bureau (AECB), the UAE federal government company mandated to implement and operate a credit reporting system across the UAE, stressed the importance of strengthening communication, collaboration and knowledge exchange between GCC countries in order to support the regional credit reporting industry and in turn enhance GCC economies and credit markets.

Speaking during a panel discussion ­ ‘credit reporting growth in the GCC region: progress with the credit reporting infrastructure and business models in the GCC region’ at today’s World Consumer Credit Reporting Conference (WCCRC) in Dubai, Mr. Lutfi said:

“In light of the GCC’s continuing economic recovery and the ongoing development of the region’s financial infrastructure, there is a need for certain precautions to be taken in order to protect the lending sector, by providing a clear picture of credit behaviour patterns and minimising any risks to the credit market. This will help banks and financial institutions to reduce costs and lower provisions for credit losses, as well as allow individuals and companies with good credit profiles to access better loan terms and interest rates.”

The 9th World Consumer Credit Reporting Conference (WCCRC) is being held until October 21st in Dubaifor the first time in the Middle East\.

Mr. Lutfi added: “The banking sector in the GCC, and particularly in the UAE, has experienced a number of positive developments in recent years, through the implementation of high quality credit reporting and enhanced transparency. Credit bureaux will provide reliable and accurate credit information to help banks and financial institutions effectively evaluate risk, enabling them to make positive decisions in order to reduce credit losses from non-performing loans. This will, in turn, enhance the financial and regulatory infrastructure across GCC countries.”

Dynamics Ax – Let Synergy Software Systems show you mobile apps

October 20th, 2014

See how the Microsoft Dynamics Expense app helps you record and categorize cash payments and file expense reports right from your smartphone or tablet. No need to keep track of miscellaneous paper receipts –digitalize print receipts on the spot with a quick photo, attach it to your expense entry, and securely submit over Windows Azure to the Dynamics back end.

Find out about other mobile productivity tools for Microsoft Dynamics AX e.g.
Mobile Timesheet App:
Microsoft Dynamics AX Mobile Expense App:
Mobile Retail Clienteling App:

Dynamics Ax 2003 R3 – Demand Forecasting

October 20th, 2014

Microsoft Dynamics AX 2012 R3, includes a light, powerful demand forecasting tool. It leverages SQL Analysis Services to enable users to forecast demand based on historical data, adjusts that information for the forecasted demand…using Excel, and then imports those values back into Microsoft Dynamics AX forecast models.

With a design that leverages familiar Microsoft technology, Dynamics AX’s demand forecasting functionality offers the flexibility to make adjustments at any order point…and no extra license cost.

Call us to ask for a copy of the White Paper: Demand Forecasting in AX 2012 R3.pdf

Bikram 0097143365589

Dynamics Ax 7 – Rainier update

October 18th, 2014

Microsoft Dynamics AX General Manager, Dan Brown, who spoke last week at the AXUG Summit in St. Louis said that Microsoft expects the next major release of Microsoft Dynamics AX, code named AX ‘7′, in approximately a year. “I don’t want to get any more specific than that just to give myself some breathing room,” he told the audience. “But that’s when the browser-based client is going to be delivered.”

AX ‘7′ will be primarily a technology release, according to Brown, with two primary focus
– The first goal is the updated user experience that is browser based and that supports mobile clients across many device platforms. The new browser based interface will replace the Windows client. It will not only expose standard AX client features, but it will also replace the AX Enterprise Portal, Brown said. Typical portal capabilities like employee self-service will be rolled into the new browser interface.
– The second goal is to support AX in production on Azure to be managed by partners.

Brown acknowledged that the functional updates for AX that continue to roll out are both a competitive necessity and a concern for the existing user base in terms of staying current with the product.

There’s a time to value that we get from getting features out into the market more quickly and becoming more competitive,” he said. “So we’re trying to balance being more competitive and gaining market share, which I think benefits us all, with the impact on [AX users] when you apply code into your environment.”

Gitex end – Synergy Software Systems. Dubai

October 18th, 2014

A very busy week – thank you to the many visitors vendors, customers, friends and the curious. Also a very tiring week and everyone ready for the weekend

Thank you to all the staff who manned the stand, the administrative tram behind the scenes, and those keeping the business going who covered work for their colleagues at the show.

A particular thank you to our partners Computime who joined us on the stand to help present BRSAnalytics for Banking regulatory reporting

For the many visitors from around all around the region interested in our solutions we will be in touch – but please be patient for a day or two there are a lot of you!

What’s next:
17th November 2014 at Microsoft Gulf Offices, we will be holding a morning seminar on BRSAnalytics and up to date information about the latest regional information on regulatory reporting. See for example regulatory reports in the regional Central Bank mandated formats.

In the afternoon we will be holding a Dynamics Ax 2012R3 seminar for the Construction and Property Management sector which will highlight Flex Property module, AEC BIM construction and tools, our localised GCC module for HR and Payroll, and our exciting offerings for BI (Management reporter new features, Atlas6, BI4Dynamcs and an incredible new cross platform app to visualise your Dynamics Ax (and other system) data

We will be running another Management reporter course soon – watch this blog for details.

In December we will also run our annual course on Year end closure for Dynamics Ax-there is always a high demand for this course so book early. New features in Ax 2012 and R3 for example budgets, and encumbrance accounting now also need to be considered.