Crisis analytics

The Greek economy has been the vortex of the financial crisis in Europe. And Alpha Bank, the country’s third largest financial services institution, has been at the eye of the storm.

The crisis was not altogether unexpected, however, and at the start of 2008 Alpha Bank sought to arm itself against the forthcoming downturn.

At the time, the bank’s priority to get a better view of its operational risk exposure. Secondly, given the tightening constraints on liquidity, it needed a way to make sure its lending was as profitable as possible.

"We wanted to understand the needs of customers at a very detailed level, so we could adjust our pricing for each product and customer segment", explains Dimitrios Dassios, manager of Alpha Bank’s MIS division.

These objectives called for a daily, bank-wide view of operational and customer data. Unfortunately, having once operated from just one legacy banking application, Alpha Bank’s application infrastructure had recently become diverse and heterogenous as it expanded into new geographies and lines of business.

"Until six or seven years ago, Alpha Bank had one legacy system but we changed our IT policy and adopted many different applications for each of our different lines of business," explains Dassios. "These included Oracle’s iFlex banking application, SAP’s general ledger and SunGard for Basel II compliance."

The bank also had a number of business intelligence tools, including SAP’s BusinessObjects and IBM’s Cognos, but these too were used separately by the different divisions of the business.

To monitor its operational risk, and to maximise the profitability of its lending activites, the bank needed to draw all this siloed data into a single repository.

Alpha Bank selected extract, transfer and load (ETL) functionality from iWay, a subsidiary of Information Builders, as its DataMigrator tool had all of the "adapters" required to integrate data from its legacy systems. It also adopted Information Builders’ WebFocus front-end business intelligence tools, and had a local IT services provider build a custom data mart.

Using all-Information Builders kit on the project allowed Alpha Bank to use the same data definitions for both the back-end and front-end of the business intelligence (BI) systems, says Dassios, and the same development language for customising the software.

Indeed, a central component of the project was asserting what Dassios describes as a common "dictionary" for the pulled in from the various legacy systems. "We let all the subsidiaries use their own data definitions, but we put them into the central data dictionary during ETL," he says.

Not only did the implementation help the bank’s management get a handle on risk and liquidity, it proved essential when the Central Bank of Greece introduced new regulatory reporting requirements during the banking crisis. "During the crisis, the regulator started asking for some very detailed information," recalls Dassios. "We had to build some specific reports for them, but we could use the data we had collected in the data mart."

Perhaps surprisingly, given the economic context of the project, Alpha Bank did not build a return-on-invesement case for the BI implementation. "Our primary goal was to reduce operational risk," says Dassios, "That was how we justified it to general management, and they were happy with the results."

Of course, the BI implementation was not enough to spare Alpha Bank from the impact of the financial crisis. Its woes continue to this day, having lost €500 million in its most recent financial half-year.  

But who knows where Alpha Bank, which announced a merger with one of Greece’s other banks in August 2011, would have been without it.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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