Relating to the transaction reporting under EMIR, SimCorp has been able to support Finnish insurance specialist Fennia in its investment decision making based on timely and accurate information. One element in this is managing market risks efficiently while minimizing operational risks with robust processes. As a company with 140 years of history, continuity, regulatory compliance, and high degree of solvency are of key importance to Fennia.
To strengthen this even further, Fennia decided to use SimCorp’s Regulatory Reporting Platform for EMIR transaction reporting. We asked them to share this experience:
Q1. What was the initial driver for Fennia to look at other options for EMIR reporting?
I’d say there were three major drivers behind our EMIR reporting infrastructure overhaul: First, we are anticipating that the upcoming EMIR Refit will cause substantial changes to the technical implementations of EMIR transaction reporting and that would necessitate us updating our reporting infrastructure in any case. Second, while the previous solution had served us several years, it did not seem flexible enough for our purposes. Third, Fennia is actively considering cloud-based solutions when these seem beneficial.
Additionally, there also has been somewhat of a change in our thinking on regulatory reporting. Rather than seeing these as one-off projects to be implemented according to the technical specifications set by the regulatory authorities, we now see these regulatory frameworks as something that will keep on constantly evolving, either with the recurring changes in the technical specifications or with e.g. scope of investment products used. Hence, the solutions used should support the evolving nature of regulation.
Q2. How would you describe the value delivered so far by the collaboration with SimCorp?
The onboarding project of the Regulatory Reporting Platform was smooth and the transition to the new reporting environment was completed according to the planned schedule. We now have the transaction reporting of our current derivative instruments, both OTC and ETD products, as well as valuation and collateral updates, all handled from within SimCorp Dimension. The workflow seems well integrated from deal entry all the way to the trade repository. When the deal capture system and the reporting system work as one unit, it is easier to maintain the reporting infrastructure which reduces the workload of day-to-day operations. As a side benefit from the project, we now also have bilateral and CCP counterparty derivative master agreement and collateral agreement structures modeled in Dimension which allows us to e.g. improve our collateral management operations going forward. Also valuable for us is the fact that pricing of the regulatory reporting service is straightforward and predictable with support and upcoming regulatory changes included in the price. This allows us to plan and budget accordingly. Of course, having Regulatory Reporting Platform as a service does not aim to fully eliminate the need for internal knowledge on regulatory reporting. Due to the relative complexity of the technical details and the two-sided reporting requirement of the EMIR transaction reporting, the SimCorp service surely allows us now to focus more on to our core business. But I think internal knowledge on the reporting requirements is still valuable, both during the implementation as well as during the normal operation phase.
Q3. How would you describe the role SimCorp, and our technology platform play for Fennia?
Fennia has been using SimCorp Dimension for ten years as the backbone of its investment management processes. Our Dimension installation has been through several corporate transactions and changes in investment strategy and organization. SimCorp Dimension Platform has been stable enough to work as a secure foundation for the investment management function but at the same time also allowing for flexibility, extensibility and reconfiguration when needed. Lately, we have also been able to interface SimCorp Dimension with business intelligence software and corporate data warehouse and reporting systems. Now we are making the first steps toward cloud-based technology and services with SimCorp as well.
Q4. Long term, what role does the partnership with SimCorp play to achieve the strategic goals of Fennia?
Profitable investment activities support the main insurance business of Fennia, allowing us to be ready for future challenges and to better serve our customers in the changing environment.