SkySparc is advising one of the world’s largest central banks on proactively improving the performance of its reserve management system to ensure future stability and resilience
Challenge
With the objective of eliminating operational and reputational risk, our client wanted to be sure its investment and reserve management system was robust and operating as efficiently as possible against current and future needs. In particular, the central bank wanted to test how the system would scale up in transaction volumes and processing demands, as a result of implementing new market easing measures such as initiating a large bond program, or due to other, perhaps unexpected, market events.
With these objectives, the central bank commissioned SkySparc to conduct a system review of its reserve management system implementation and test the resilience of the system in different scenarios.
The first requirement was to establish a baseline of current performance as a reference point. This benchmark would then be used to test how the system coped with a large growth in transaction volumes. Finally, the study would identify enhancements and areas for improvements in order to assure stable systems performance.
SkySparc’s consultants worked very methodically. Initially they spent quite a few days in workshops, talking to users in order to collect information about perceived bottlenecks in the system. Their approach always cut straight to the core of the issue and whenever they made a change, they were clear what they wanted to achieve.
Client Director closely involved in the project
Solution
SkySparc drew on its long experience of advising central banks and other users of treasury and portfolio management systems to design a comprehensive, phased system review study. It was important to gather quality information about the current system usage and understand expectations for the future. In-depth workshops were held with different groups of users to gain a full picture of the requirements and user experiences. The output was then used to define the requirements, including user profiles, test scenarios and test cases for the study.
Phase one of the study focused on benchmarking. Three test scenarios were established: a baseline scenario using data from the current production environment and two future scenarios, created by importing additional purchase and sale transactions to stress test the system’s performance under increased trading conditions. Once the tests were run, it was possible to identify the level of increased volumes that would impact performance and to pinpoint which system areas would be affected and how.
Phase two of the study made recommendations for performance enhancements and fine-tuning to ensure the system would be able to support future processing needs.
Phase three of the study focused on measuring the nightly activity cycle run times to ensure the system would be able to handle the expected increase in transaction volumes and cash flows. It was critical to understand if the system would be able to maintain current processes with the addition of new instrument asset classes and activities in the future.
One area of analysis focused on a customization that delivers transaction data from the central bank’s reserve management system to its proprietary data warehouse. These activities are particularly resource intensive - and so could cause the activity cycle to fail to complete in the required time. In addition, we suggested improved system maintenance procedures to optimize performance and ensure future stability.
The initial study was completed, fully documented and delivered to our client for their review of the clear performance assessment and recommendations made. Based on a very positive response to this report, we implemented prioritized enhancements recommended by the study. These included ensuring the system could handle the growing transaction volumes and associated increased activity run times.
A further phase of in-depth testing and extended benchmarking is now underway, covering other aspects of performance, for example, settlement processing.
Results
- The performance of the system was validated and enhancements identified and implemented.
- The impact of a sudden increase in trading levels was accurately measured, and steps taken to ensure critical stability is maintained in the central bank’s systems. For example – risk data is reliably available to business users in the data warehouse, without risk of interruptions to the run cycle.
- Future-proofing is in place: our client now has a performance base-line and methodology for future benchmarking and resilience planning.
