Volcker Regulatory Reporting

XML (Extensible Mark-up Language) is the lingua franca for the exchange of information in the banking industry, but many institutions are struggling to use it effectively. Failure to correctly translate RAW trading message data into XML-related languages could cause banks to miss regulatory deadlines and incur large fines. Brickendon were engaged to develop a system to transform RAW data via XSLT into XML/FPML-format to enable quick and accurate reporting to the appropriate regulatory authorities.

The Challenges

• To develop a system that can be used by different proprietary trading systems, which all have their own development teams with their own views
• A lack of resources
• Poor communication between teams and across departments
• Tight deadlines due to regulatory reporting requirements
• Internal developers are focussed on day-to-day trading activities and the reporting side is often overlooked
• Management believed that XSLT solutions provided by PTSs were not always of high quality
• To ensure the new code is written with care and integrated into the existing system, rather than being added in an ad hoc way and becoming part of the spaghetti code

The Brickendon Solution

• To devise a message transformation testing framework, allowing high-quality testing to be carried out in a variety of ways
• To test transformation code which turns RAW data into regulatory reporting
• To develop Schematron XML Unit test frameworks to verify the required business rules
• To develop a variety of tools including value-to-value reconciliation, which includes source-to-target XPath mapping validation; as well as content-coverage to help take the source and result data and determine what attributes have not made it across after message transformation.
• To develop a reusable and shared transformation library for common trade reporting components
• To ensure the project continues to move forward and avoid errors with the use of expected regression testing, which becomes part of continual integration
• To provide management with a variety of informative cross-PTS reports
• To communicate  with BAs across a number of departments and a range of proprietary trading systems (PTS) – can be across different countries

Client Benefits

• An efficient reporting system enabling the bank to meet strict regulatory deadlines and avoid the risk of incurring large fines
• Peace of mind that problems can be spotted early, removing the need for last-minute costly fixes once the system is up and running
• Higher quality software due to rigorous test procedures
• A good helicopter view across all PTSs
• The system can be replicated across other areas of the business
• The Test Framework proved so useful that PTS Dev teams started using it. Later, the framework was extended to provide reconciliation capabilities, which are now used by many business analysts in the bank