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Microsoft and HCL build Excel compliance tools for banks and traders

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7th Mar 2007
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Microsoft has been working with Indian software house and services company HCL to devise a series of prototype Excel Services systems for handling trading, settlement and compliance reporting within financial services companies. John Stokdyk reports.

Microsoft UK's chief technology officer for financial services, James Burns, said the two technology companies had been working with around half a dozen financial organisations - including some well known high street banks.

Much of the information that flows through financial services organisations is contained in spreadsheets and email, which can cause huge compliance problems, Burns said.

"HCL has wrapped a number of components around Excel Services to change how traders and front-office organisations operate. People used to look for spreadsheets containing product models and cut and paste information into new spreadsheets."

A lot of complex financial products are modelled on spreadsheets, which is typically done by hand, Burns explained. If the product becomes successful, the model is often passed on to programmers to create a more robust tool.

"But with Excel Servies they can now build models in a spreadsheet and save it as a database on the server. It's a new way of looking at how we can develop solutions," he said.

One of the biggest challenges facing these organisations relates to risk reporting. Burns explained that on a trading floor, each desk will maintain a risk position, and an overall floor position will also be monitored.

"To do that kind of reporting is a nightmare," said Burns. "We've done some work to simply that process based on Excel Services spreadsheets and to handle more sophisticated P&L reporting - the types of report the compliance team and controllers need for middle office, where all the risk reporting is done.

"A lot of trading floors and finance departments have to go 'through the back door' to get at data, which compliance hates. We can put an Excel Services layer in to cache data to stop it going back and forth. Sso compliance is happy, IT is happy, and users are happy."

Burns added that throughout the development of Excel 2007 and Excel Services, the development team zeroed in on issues facing the financial services sector, because it turned up the most errors and requests for top level support. Some of the key compliance issues were set out in a Microsoft whitepaper (730k Word download) issued last year.

"A lot of the issues also apply to the financial departments of large organisations," Burns added.

The Excel Services capabilities being used by the HCL implementation team were designed to plug the compliance gaps identified in the Microsoft whitepaper and form part of the Microsoft Office Sharepoint Server (MOSS).

Burns explained that the Excel-SQL Server data connections are controlled by the Windows Workflow Foundation, which provides an auditing mechanism to log when files are opened and modified. Some of the version control tools are also part of the SharepointServer web publishing mechanism, and there is an electronic forms system so people can design XML forms to accept data inputs in a controlled manner. Around all of this is a security/entitlement model for the spreadsheet, which can also connect to non-Microsoft authentication models.

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