Getting Started with Application Fundamentals for Financial Services Industry

This chapter discusses:

Financial Services Industry applications overview.
Financial Services Industry business processes.
Financial Services Industry integrations.
Financial Services Industry implementation.

Financial Services Industry Applications Overview

PeopleSoft has an integrated suite of applications for the financial services industry. These applications, which run within the PeopleSoft Enterprise Performance Management framework, are designed to help calculate and measure the economic profitability of an organization's customers, products, channels, and operating units. These are the PeopleSoft Financial Services Industry applications:

PeopleSoft Enterprise Funds Transfer Pricing

Provides the ability to attribute a net interest margin to sources and uses of funds within a financial institution based on several industry standards and best practice methodologies. Funds Transfer Pricing is also used to calculate the cost of allocated capital, which can then be factored into the profitability of that application or activity.
PeopleSoft Enterprise Risk-Weighted Capital

Allocates capital based on the risk of activities and portfolio balances. The risk-weighted capital amount is typically calculated as a function or based on the unexpected loss for an activity or instrument. With Risk-Weighted Capital, you can determine, for each instrument or business activity in your organization, the equity capital that you should allocate for the associated risk or earnings volatility. You can also calculate the normalized expected loss, which can be used instead of actual losses to analyze economic profit and loss. In addition, Risk-Weighted Capital can be used to address significant portions of the Basel II capital accords, particularly regarding credit risk processing.

The Financial Services Industry applications address profitability management by establishing an environment that specifically targets the business requirements of the financial services industry. You can set up the individual financial products or instruments within the system, apply specific processing and calculation rules, and then run the system to measure the values of the balance sheet and off-balance sheet items. You can also measure the sensitivity of those values under alternative economic and operating assumptions.

Financial Services Industry Business Processes

The Financial Services Industry applications are part of the PeopleSoft Enterprise Cash Management business process.

Financial Services Industry Applications Integrations

PeopleSoft Financial Services Industry applications integrates with the EPM Warehouse:

Charts integration.
Currency conversion integration.

Charts Integration

Many of the PeopleSoft Financial Services Industry application pages contain charts. To use charts, you must:

Install the PeopleSoft Enterprise Performance Management charting tool to enable the PeopleSoft Financial Services Industry application pages to use the chart feature.
Navigate to EPM Foundation, EPM Setup, Installation Analysis & Options, Installation Options, Web Services and set the following options:
- Select the Chart Server check box to enable you to use the basic charting features.
- Select the Applets check box to enable applets that several applications use to provide enhanced and interactive charting abilities.
  
  Warning! Applets download code to the client workstation.

Many charts are interactive. Depending on the chart type, you can:

Click a data point to view information about it, such as the x and y values and a description.
Rotate the chart by clicking an axis and dragging with your mouse.
Move the chart floor by clicking and dragging the floor's surface.
View details when you move your mouse over a point.

Currency Conversion Integration

All records contain amount fields for base currency and transaction currency. A company uses base currency to generate consolidated financial reports. If the company has multinational operations, then the business operations transacted in foreign currencies are converted to the base currency for consolidation. The analytic applications and support modules use both of these fields for processing and posting results.

To ensure that PeopleSoft Financial Services Industry applications and the financial services industry environment use the appropriate amount fields in their processing, set up your datamaps and constraints correctly in the warehouse. These are the four types of amount fields:

Base Currency Equivalent Amount (frequently identified with a BCE_AMT suffix—for example—FI_PAYMENT_BCE_AMT).
Posted Base Amount (POSTED_BASE_AMT).
Posted Transaction Amount (POSTED_TRANS_AMT).
Posted Total Amount (POSTED_TOTAL_AMT).

This is the total base currency amount for all foreign currency ledger accounts with the same key.

Note. Every amount or balance in the instrument and balance record has a field for the amount expressed in the transaction currency and another field for the amount expressed in base currency equivalent units. PeopleSoft Financial Services Industry applications and the financial services industry environment use both the base currency equivalent units, and the transaction currency amount fields, with the exception of the Cash Flow engine and FPM, both of which always use the transaction amount.

Financial Services Industry Implementation

PeopleSoft Setup Manager enables you to generate a list of setup tasks for your organization based on the features that you are implementing. The setup tasks include the components that you must set up, listed in the order in which you must enter data into the component tables, and links to the corresponding PeopleBook documentation.

Other Sources of Information

In the planning phase of your implementation, take advantage of all PeopleSoft sources of information, including the installation guides and troubleshooting information. A complete list of these resources appears in the preface in About These PeopleBooks with information about where to find the most current version of each.