FHB Bank, Hungary

FHB, one of the leading banks in the lending industry in Hungary, has implemented the FLEXCUBE core banking product in 2006. The main modules are CORE, CASA, TD, CL and FT along with an internet banking interface for online TD opening, Funds Transfer and CASA related enquires.

FHB is a mid size bank with 50,000 CASA accounts, 20,000 active consumer loans and around 500 funds transfers/day. We have deployed our FLEXCUBE consultants on-site.

To remain competitive, FHB bank has introduced various account packages which classify customer accounts into various categories and for each category, based on account balance, turnover etc. accounts are eligible for various attractive offers on interest rates and charges. This has resulted in a complicated IC module setup with multiple rules for each account. Due to this complicated setup, the Bank faced a huge challenge in terms of maintaining the existing IC products, introducing new offers, and changing the interest rates and charges frequently.

Also, the bank faced difficulties in maintaining effective communication with OFSS and obtaining the required support on-time. In most cases, the bank didn't receive solutions on time and had to spend a major effort in providing multiple support documents which consumed extra time. There are multiple instances where the bank couldn't start their operations the next day on-time due to EOD issues and support turn-around time.

Our team has helped FHB Bank overcome these challenges by deploying FLEXCUBE experts on-site and provided the following services:

- Effective communication with OFSS explaining the cause of the issue, simulation steps and the possible solution/work-around.

- Monitoring and verification of IC interest rate and charges modifications.

- Month-end simulation and results verification on the support system during the last week of every month.

- Effective FLEXUCBE support during transaction hours and End of Day processing.

- Guidance on new product setup, identifying work-around and application tuning.

Encountered many technical and functional Issues under Interest and Charges, Consumer Lending, CASA, End of Cycle, Term Deposits and Fund Transfer through Interfaces. A few of the significant issues are listed below.:

- Interest and Charges

Major causes for wrong Interest calculations encountered are listed below:

• Failure in IC resolution
  • Identified the problems in IC resolution after Rate Code and Account product Identifier changes. Assisted the Bank with suitable workarounds for initial survival and fixed the problem with a permanent solution which includes the recalculation of interest and charges for problematic accounts across backdated periods.
• Incomplete technical maintenance of the Interest Rule by system
  • Identified the system failure to handle the Interest derivation rule of greater length. System couldn't create the necessary dynamic database objects for Interest Derivation Rule. Helped the bank with a workaround and provided a permanent solution.
• Missed/Duplicate turnover and balance update for customer accounts
  • In some cases, the Credit / Debit Turnover and Daily Balance update were missed or updated more than once for a few accounts which led to incorrect interest calculations. Solved the problem with reconciliation between account balances and transaction history. Provided a system for the bank to provide proper balance updates to the accounts.

- End of Cycle (EOC)

FHB process parallel EOD for branches in groups every day. Encountered a unique problem while marking End of Transaction Input, which resulted in more EOD processing time, affecting the statement generation and other parallel activities. The system reported an error which was not the real cause for failure. Suggested the suitable steps and necessary changes to track and solve the unhandled exception.

Assisted the bank in solving everyday problems such as balance mismatch in Real, Contingent and Position General Ledgers.

- Consumer Lending

Any changes to an existing loan are done by Value Dated Amendments functions through FLEXCUBE. After VAMI, a few loans in the FHB developed problems which resulted in duplicate interest accruals for the same day with different amounts.

These duplicate interest accruals have caused serious concern about the Interest amount earned by the customers. Investigated the problem and helped the bank rectify a system bug. Principal component for schedules disappears when Interest method is changed from simple to amortized method, earlier to the initial date maintained, verified the repopulation of wrong schedules where principle component is missed.

Principal component for schedules disappears when Interest method is changed from simple to amortized method, earlier to the initial date maintained, verified the repopulation of wrong schedules where principle component is missed.

- Term Deposits through Interfaces

Due to a technical bug in the system, a few TD bookings resulted in partial accounting entries in which the debit entry for the offset account were missed, leaving the positive balance in the TD account. Such booking items caused problems in End of Cycle and Credit Interest in the TD and the deposit amount is not taken from the customer. Suggested suitable workaround for initial survival and fixed the problem permanently later with effective communications through OFSS.

- Fund Transfer through Interfaces

FHB undergoes more than 500 incoming and outgoing Fund Transfers everyday through the GIRO interface. In many cases, the reason for FT transactions being rejected or unprocessed during the batch upload are not explicitly demonstrated to user. Our team helped FHB in this daily problem discover the cause of the error and we suggested suitable reprocessing methods/workarounds.

With the knowledge gained from past experience with various problems across modules, we have set up an optimized verification method to identify and prevent most of the problems before they become reality.

- Well organized simulated End of Month for Interest and Charges, which includes reconciliation of processed accounts under each IC Product/Branch against two months history.

- Frequent checks to confirm the successful IC resolution.

- Reconciliation of Interest accounts processed against the necessary Accounting Entries.

- Well optimized error identification methods to find out the problems expected during End of Day. This assures the successful EOD operations and that branches are opened the next business day on-time.

- Complete analysis before any change in parameterization for any module, which helps to save time, resources and prevents post parameterization errors.

- Proper investigation of errors, identified the root cause for failure, suggested the best solution or workaround applicable to solve the problem permanently.

- Always focused on impact to the related modules and functions due to change in sources; only the required changes are applied to the system.