Industry Financial Services

Business Challenge Enterprise wide financial reporting

Technology Solution Financial Architects Financial Studio™ using MicrosoftSQL Server 2000 Enterprise Edition (64-bit) and 64-bitversion of Microsoft Windows Server 2003 EnterpriseEdition on HP Itanium® 2-based servers

Enterprise Hardware PlatformHP Servers based on Itanium® 2 processors

Business Intelligence forFinancial Institutions

H P I N T E L S O L U T I O N C E N T E R B L U E P R I N T F I N A N C I A L S E R V I C E S

S O L U T I O N A R C H I T E C T S

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Meeting New Market DemandsFinancial institutions are constantly looking for ways to takecosts out of business operations while simultaneously buildingcapabilities that support business growth. There is a relentlessneed for comprehensive information and analysis capabilitiesto support these business objectives. The capabilities soughtencompass both compliance with the regulatory environment(e.g. IAS/IFRS & Basel II) and profitability analyses.

Technology investments are recognised as an enabler, butfinancial institutions are wary of the complexities, delays andcosts associated with many IT implementations. Any proposedsolutions must therefore meet demanding selection criteriathat include functional capabilities, technology performance,implementation ease and total life costs. HP has broughttogether a powerful cost-effective solution available on HPProLiant and Intel® Itanium® 2-based servers that provides atested business intelligence offering for financial institutions.

Use of the Itanium® 2 ensures outstanding performance andthroughput capacity combined with superb reliability,manageability and serviceability. Itanium® 2-based serversprovide higher performance, lower cost and greater choicethan other technologies for the most data-intensive, businesscritical applications.

The business intelligence for banking solution provides anenterprise wide packaged ERP (enterprise resource planning)and analytic business intelligence solution designed forfinancial institutions. The end-to-end solution is based onFinancial Architects’ Financial Studio and the new 64-bitversion of Microsoft SQL Server 2000 Enterprise Edition*running on HP Itanium® 2-based servers. The Financial Studiobusiness intelligence for financial institutions solution is acomplete suite of functional modules including financialaccounting, product and customer profitability, regulatoryreporting, management accounting, risk measurement, Basel IIcompliancy and strategic budgeting and control into a singledata platform.

The Business Challenge

Financial institutions need reliably to handle massive amountsof data from varied sources and turn this into meaningfulinformation for real-time decision-making.

The challenge is to achieve the following:

• meet the corporate needs for powerful analytical capability

• deliver best-of-breed accounting and operationsfunctionality

• provide users timely access and ease of use

• cope with increasing and ever more complex regulatoryrequirements such as Basel II

• offer simple and seamless integration into existingenvironments

• assist with the organisational challenges of data collectionand data consistency

• handle multiple and disparate data sources from legacysystems

• manage large data volumes (current and historical)

• minimise total cost of IT operations

Use of the Intel server platform provides financial institutionswith a broad choice of interoperable, flexible hardware andsoftware building blocks to customise, optimise and cost-effectively scale their IT systems as needed. It ensures a highlevel of quality, reliability and price-performance with rapidreturn on investment and long-term growth potential.

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The Solution Overview

The solution’s framework and application accelerator iscentered around a large analytical database designed forcomplex financial reporting requirements for financialinstitutions and serves as the foundation for businessintelligence (BI) activities including risk functions. Businessintelligence is enhanced with ERP data, traditionally takenfrom in-house general ledger (GL) and back office systems,which completes the solution.

Financial institutions benefit from a single source financialmanagement solution, storing data into a central repositoryaccording to a rich and flexible data model. A wide range ofsmart calculators empowers the business users with access toall of the data and decision-making tools.

Insights to make better decisions will be immediately derivedfrom this business intelligence solution due to the innovativedata model. Financial and non-financial data is efficientlymaintained at the lowest level of detail thereby providing asingle validated and reconciled source of financial information.Summary reports, and high level analysis are major benefits,but equally important is the thorough retention of data, whichallows for a full audit trail capacity to any level of detail.

The solution is available on cost-effective industry standardhardware and software platforms. Utilising the MicrosoftWindows* operating system, Microsoft SQL Server 2000, andHP Intel-based servers the Financial Studio can be introducedinto any existing technology architecture. The solution iscompatible with the newest HP servers using Intel® Xeon™and Itanium® 2 processors to meet the future capacity andgrowth needs of the enterprise.

Technology

Financial Studio on Windows Server 2003 was built on 32-bitIntel Xeon systems and runs natively unmodified on HPItanium® 2-based servers with Microsoft SQL Server 2000Enteprise Edition (64-bit). Immediate performance gains andgreater scalability can be transparently achieved using 64-bittechnology. A customer can choose to run the same softwareversion of Financial Studio on industry standard Intel® XeonTM

processor-based, and Itanium® 2 -based servers making asmooth migration from 32-bit Intel® architecture to theincreased performance and impressive scalability offered by64-bit computing.

The HP Proliant family of industry standard servers is basedon 32-bit Intel® XeonTM processors. Intel-based servers providebest-in-class performance across the widest range ofapplication environments. ProLiant is the leading platform inuse for Windows-based applications and provides a high-performance and cost effective platform for implementation.Many organizations, based on their usage patterns, candeploy their solutions on ProLiant.

For enterprises requiring increased levels of capacity Itanium®

2-based servers running 64-bit software from Microsoft

provide an option. State-of-the-art 64 bit processing isprovided by the Intel® Itanium® processor family, the industrystandard technology of the future. Itanium® 2 processorsincluded in HP’s rx2600 2-way and rx5670 4-way serversutilise explicitly parallel instruction computing (EPIC). EPIC isdesigned to paralyse the instructions within each clock cycle.This is accomplished using software compilers that decidewhich instructions can be processed in parallel. This providesthe growth in processor performance needed to meet theapplication performance needs of the future

The HP zx1 chipset, a special hardware enhancement uniqueto HP Itanium® 2-based servers, provides better price-performance than competitors due to its low latency, highbandwidth and low cost design. Another key new feature isthe ability to address greater than 3 GB of virtual addressspace. This advanced memory addressing capability allows forin-memory computation, and avoids heavy disk I/O which canhinder performance.

The application software runs on Microsoft Windows Server2003 Enterprise Edition 64-bit utilising the new SQL Server2000 Enterprise Edition (64-bit). A server agent and analysisserver provides for OLAP (on-line analytical processing) anddata mining. This Itanium® based operating system anddatabase engine delivers exceptional performance andscalability for complex analytic and business intelligenceworkloads. With the ability to install up to 16 database engineinstances on a single Itanium® 2-based server, multiple high-end applications can be managed.

The Financial Studio solution combines new Web-basedreporting technologies with XML and XBRL standards todeliver maximum functionality and flexibility to the end user.

Target Market and Customer

Banking intelligence targets the financial services industry on aglobal basis, addressing the needs of a wide range ofbusiness areas, such as capital markets, private banking, retailbanking, corporate and wholesale banking, brokerage anddealer business.

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GL AnalysisProfitability

DemographicsSensitivity

Key PerformanceIndicators

VarianceForecasting

TrendingSeasonality

Contribution

SupplyChain

CustomerRelationship

Mgmnt(CRM)

EnterpriseResourcePlanning

(ERP)

BalancedScorecard

Budgeting

SalesAnalysis

Financial Studio

Source: Gartner Research

MarketingAnalysis

FinancialAnalysis

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The Financial Studio solution offers a scalable architecture forsmall and mid-size to large banking institutions offeringsupport to key businesses within a bank’s organisation, suchas finance and control, risk department, treasury, ALM, etc.

Proof Points

The HP Intel Solution Center conducted a proof of concept(POC) benchmark showing performance on the HP ProliantDL580 with two Xeon 1.6GHz processors, compared with theperformance gains and database size increases when usingthe HP Itanium® 2 -based server rx2600 with two Itanium® 2processors 1.0GHz.

The graphs below show the increased performance across theboard of the Itanium® 2 solution, with a processor running atjust 62 percent of the Xeon processor speed. Future versionsof the Itanium® 2 processor will run at 1.5 GHz which willincrease even further the performance capabilities.

In this benchmark IA-32 Xeon performed only slightly underHP rx2600 Itanium® 2 –based servers, but Xeon would notscale to the larger database size.

Also proven is the portability of SQL Server applications from32-bit architecture to 64-bit Intel® Itanium® architectures.Financial Architects’ ’Financial Studio’ application wasoriginally developed for IA-32 Servers using Microsoft’s 32-bitSQL server.

Now the same software version is proven to run on Itanium®

2-based systems with SQL Server 2000 Enterprise edition (64-bit) in a high availability environment, but run faster andaddress larger databases.

Customer Value Proposition

This business intelligence solution has been put together by agroup of companies that are all market leaders (FinancialArchitects, Intel, Microsoft and Hewlett Packard) in theirrespective fields specifically to meet the needs of financialinstitutions

• A comprehensive analytical capability

• Platform excellence with built-in reliability

• Maximum return on IT investment (RoIT) through- industry standard technologies- industry leading performance and scalability - intelligent manageability- support and services

This Banking Intelligence solution has been tested in the HPIntel Solution Center using the market-leading HP ProLiantand Itanium® processor family servers. Use of Itanium®

technology ensures industry-leading enterprise performance,improved scalability and reliability for data-intensive, businesscritical computing, and headroom for growth. The solutiondelivers the following:

• an integrated and tested software stack to reducedeployment time and complexity

• ability to focus on customisation and integration

• data to determine configurations of systems that meetrequirements

The proof of concept was put together by a multi-disciplinaryteam from all the vendors involved, and a comparable teamcan be assembled to accomplish similar proof of concepts forcustomers. The same team is then available to follow throughwith deployment. During implementation, the team wouldmake sure that the solution is seamlessly integrated into allthe relevant existing systems and data sources, and also toensure the deployment occurs transparently without anydisruption to current process and work flow.

Itanium® 2 1.0 Ghz 2W

XeonTM MP 1.6 Ghz 2w

Itanium® 2 1.0 Ghz 2W

XeonTM MP 1.6 Ghz 2w

Functional Business Concept

The complete solution is modular in design and provides a setof functions built around a rich banking data model. The broadcoverage of banking practices (retail, corporate, investment,treasury, etc.), and the wide range of banking products andfinancial instruments covered makes Financial Studio the idealaccelerator to address complex enterprise wide reportingrequirements.

Financial Studio is designed to take feeds from multiplesources. This is achieved using the SQL Server DataTransformation Service* (DTS) or Microsoft Biztalk* Server.This has been successfully implemented across multipleplatforms and with all data transformations. The openness ofFinancial Studio also allows integration with other middlewaretools. User-friendly screens give the end user the ability toprovide manual input.

Thanks to DTS, different source data can be used (flat files,HTML files, Excel*, Access*, Paradox*, dBase, ODBC forOracle*). Any other ETL (extraction/transformation/loading) toolcan also be used. The tool will extract, transfer and load thedata into the data model, using standard stored procedures.

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Common Financial Layer

ContractData

CustomerData

MarketData

FinancialAccounting

PortfolioIntelligence

Calculators &Reporting BookBuilders

Reporting &Analysis

Layered Approach

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User Experience

Transactional data, postings or movements are taken from thedifferent source systems. Detailed balances are created oncustomer level, deal level, and account level integratinginformation such as financial data, product and customer data.

User-definable multi-dimensional account keys (e.g. entity, costcentre, account, and more) makes it easy for end-users toaccess data in simplified reports by using smart calculatorswithin the functional modules.

CustomerDetails

Detailed Transactions Deal Balances CustomerBalances

AccountBalances

Period

Averages

Budgets

GAAP

Entity

Currency

Actuals

Chart ofAccounts

ContractDetails

Reference Data

FinancialAccounting

Product

Deal

AccountManager

ProjectEntity

Desk

Customer

Distribution Channel

• FX• MM• Loans• Deposits• Fra& IRS• ...

Full detailof

exposure

Full detailof loan

Drill though Into

Exposure balances

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Software Architecture

The solution stack is developed primarily on Microsoft SQL Server2000 technology using stored procedures. This allows the softwareto run 100 percent on Intel architecture 32-bit servers, or 100percent on 64-bit Itanium® 2-based servers.

Other optional Microsoft enterprise server products can becollocated on the same server, or not, depending on the featuresand analysis to be used: Microsoft Data Transformation Services,Microsoft Biztalk, Microsoft SharePoint* Portal Server (Sharepoint),Microsoft Internet Explorer* and Microsoft Analysis Services*.

Financial Studio can be implemented as an N-tiered application.

• Client: the client is separated from the rest of the applicationby the network (LAN or WAN). The client can be either thin(Internet browser) or rich (native application or MicrosoftOffice*).

• Web & Business Server: the application logic resides on theWeb and business server. This server interprets the clientrequests to run procedures on the database. The Web serveris the front-end (exposed to the client) while the businessserver is the back-end (exposed to the database). The front-end can be either an ASP application (thin browsers) or aWeb service (rich browsers). Front-end and back-endcommunicate with each other through means of messagequeues.

• Relational Database Server: the Microsoft SQL Server2000 Enterprise Edition (64-bit) database server houses oneor several databases.

BackOfficeSystems

BiztalkServer2002

FinStudioExplorer

DTS

FinStudioDBs &OLAP Server

Windows 2003 ServerActive Directory SQLServer 2000

FinStudio Web Portal.Net

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• OLAP Analysis Server: the analysis server takes data fromthe database server and makes it available to the businessserver for OLAP reporting requests. Analysis Server is acomponent of SQL Server 2000 Enterprise Edition and canbe co-located on the same server as Financial Studio, oranother server.

Financial Studio is designed to take feeds from multiple sources.This is achieved using the SQL Server Data TransformationService (DTS) or Microsoft Biztalk Server. This

A massive detailed database is needed that can manage manyreal time inquiries from multiple sources. Inquiries are processedalmost instantaneously with Microsoft SQL Server 2000.

The security model of the overall solution manages roles andresponsibilities. The standard security features of the solutioninclude processing functions, security on the different types ofjournals in data entry, and data online management as well asaccess to the business unit the user belongs to. Existing securityprofiles from other systems can also be imported, reducingduplication.

FinStudio Journals

Back OfficePackage

In-HouseSystem

Excel files

...

AccountBalance Head

Office

OLAPCubes

Regulatory

ContractData

Customer Data

CollateralInfo

MarketData

IAS__________

Accountinggenerator

Basel II__________

Riskengine

BusinessCalculators

(reconciliation,consolidation,profitability, ...)

DT

S/B

izta

lk/M

idd

lew

are

Deskto

pE

xplo

rerW

ebp

ortal

FinStudioReports(Office)

BusinessObjects

Feed othersystems

Web Reports(.Net/SPPS)

FinStudioOLAP (AnalysisServices)

FinReporter(Office)

Banking industryData model

Calculators/Engines

Results/Data marts

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Systems Architecture

The configuration of the business intelligence solution testedwas based on a relational database server hosted on two HP rx2600 server with Itanium® 2 processors in a highavailability (HA) cluster. A powerful configuration of 1 GhzItanium® 2 processors and 4 GB of RAM easily accommodatedthe software combination of 64-bit Microsoft Windows Server2003 Enterprise Edition, and SQL Server 2000 Enterprise Edition(64-bit), even when using the largest database size where the IA-32 server could not complete.

The HA capability of the solution is provided by connecting theservers using Microsoft Cluster Server* (MSCS). The database islocated on shared storage on an HP virtual array VA7105accessed through a S.A.N. (storage Area Network) over fibreoptic connections. All systems are networked together usingintegrated Gigabit LAN.

Management Server Database Servers

Domain controllerDNS Proliant DL380

rx2600 Itanium® 2 servers dual12 GB RAM 1.0 Ghz

Finarch1 Finarch 2

Ethernet LAN 10/100

Ethernet LAN 1Gb

EthernetManagementInfrastructure

Switched network

hp StorageWorksFC switch 2GB

Storage Area NetworkInfrastructure

Storage

Volume F: 40 GBVolume G: 40 GBVolume H: 30 GBVolume I: 30 GB

HP Virtual ArrayVA74xx

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How To Engage

The HP Intel Solution Center is chartered to help customerscomplete proof of concept (POC) testing and sizing to prove thisis the best solution available for you. If you want to verify thissolution will work for you please fill in our qualification:www.hpintelco.net/engage

Learn more about this innovative solutionwww.hpintelco.net

www.hp.com

www.intel.com

www.microsoft.com/sql

www.finarch.com

Copyright ©2003 HP Invent. All Rights Reserved.

Intel, the Intel and Intel Inside logos, Pentium and Xeon are trademarks or registered trademarks of the Intel Corporation or its subsidiaries in the United States and other countries.

Copyright ©2003 Intel Corporation. All Rights Reserved.

*Other names and brands may be claimed as the property of others. Information regarding third party products is provided solely for educational purposes. Intel is notresponsible for the performance or support of third party products and does not make any representations or warranties whatsoever regarding quality, reliability,functionality, or compatibility of these devices or products.

Part Number: BP04-2003/E