One bank of note had some initial success in building a spreadsheet solution and didn’t realise that it had painted itself into a substantial corner until very late in its development cycle. The physical constraint on the number of rows per worksheet and difficulties in looping to optimise collateral for the FIRB approach made it impossible to continue down this path; money spent, time wasted, and still no solution. The Confucian lesson from this story would be something like, ‘If you begin with a tool which imposes constraint, you will end up with a constrained solution.’

Another instance saw a bank attempting to run miles and miles of SQL against its Basel data mart and glue togther all of its result sets. The resource who had written the SQL left the role shortly after its initial completion and the code was immediately deemed to be unsupportable. The moral of this story is, ‘If the solution cannot be understood and supported by a safe number of resources, the risks to the organisation are inexorably high.’

Yet another instance saw a bank attempting to implement a solution in Visual Basic and Access. When SMEs queried some of the logic in the solution it was discovered that it concentrated solely on the ‘low hanging fruit’ in the Accord because the more intricate logic could not be accomplished in Visual Basic. The lesson from this story is, ‘Banks are obliged to meet ALL of the Basel II requirements, not just the easy ones.’

Lastly, nearly everyone would have read an ‘Idiots Guide to Excel’ or ‘Visual Basic for Dummies’ at some stage in their career, and hopefully it helped to achieve the goal of building a ‘utility’. But there needs to be careful consideration of the difference between this short term thirst for knowledge and the high calibre Software Engineers who have worked and studied for years in order to hone both the art and science of graceful software architecture.

If your bank has been searching for just this type of graceful solution, at a price which is so competitive, that you would question undertaking even a modest in-house attempt…Why not talk to us at RegCap?