Talend supports fund reconciliation

Talend Data Integration at Hauck & Aufhäuser Privatbankiers KGaA
We were particularly impressed by the functionality and user friendliness of Talend’s solution. The fact that it is an open source product wasn’t a decisive factor for us but it has opened up a number of interesting possibilities – including access to a well-networked Talend community.
Matthias Mikolasch, project manager

The customer

Hauck & Aufhäuser Privatbankiers is one of Germany’s few independent private banks. It is an enterprise with a long tradition stretching back over 200 years. Hauck & Aufhäuser was formed by the merger of two private banks steeped in tradition: Georg Hauck & Sohn Bankiers in Frankfurt am Main, which was founded in 1796, and Bankhaus H. Aufhäuser, which has been operating in Munich since 1870. The two firms came together in 1998. Hauck & Aufhäuser has always been renowned for its independent, responsible approach to business and close customer ties.

From its offices in Frankfurt am Main, Munich, Hamburg, Dusseldorf, Cologne and Luxemburg, the bank provides end-to-end consulting, flanked by asset management services for private, corporate and institutional investors, also supporting family offices and trusts. In addition, the bank collaborates with independent asset managers. Hauck & Aufhäuser combines its traditional roots with a modern outlook, providing individual solutions based on extensive, personal consultation. The bank’s capital is privately owned, and has one personally liable partner, Jochen Lucht, and two general partners, Michael O. Bentlage and Stephan Rupprecht.

The challenge

The Hauck & Aufhäuser Group has been operating in Luxemburg since 1973 through Hauck & Aufhäuser Banquiers Luxembourg S.A. (HAL). Founded in 1989, the subsidiary Hauck & Aufhäuser Investment Gesellschaft S.A. (HAIG) specializes in collective funds. HAIG provides a full lineup of one-stop, professional services supporting all investment structures. The bank enhanced its portfolio offering in 2009 with the creation of Hauck & Aufhäuser Alternative Investment Services S.A. (HAAS). HAAS specializes in alternative investment concepts and the management of external investment trusts.

Hauck & Aufhäuser is also the custodian bank for several investment companies. All transactions that fall under this remit are handled by the bank headquarters in Frankfurt. The special assets managed by the bank in its custodian role are evaluated in Luxemburg to ensure they comply with legal requirements. This process compares the net value of assets reported by each investment company with the values determined by the custodian bank. As part of this reconciliation process, the bank has to reference and compare a wide range of different criteria. A large number of different parameters have to be taken into consideration here, including fund indicators such as unit value, net asset value, issue price and shares in circulation. The fund assets under management, including securities, derivatives, bank account balances, charges, dividends and bond coupons, plus other evaluation criteria also have to be reconciled.

In its role as custodian bank, Hauck & Aufhäuser has to manage a high volume of special assets, a wide range of reconciliation criteria and tight deadlines with daily reconciliations. The bank therefore needs powerful IT systems to process this data stream. The data also has to be saved on a central database that can be accessed by all applications. Hauck & Aufhäuser had been using an infrastructure built around a Microsoft Access database, which had evolved with the bank over the years. As the bank’s custodian duties increased, however, this database system started to reach its limits. The bank thus decided to replace the Access applications with a modern landscape build on an Oracle database and an IT solution featuring extract, transform and load (ETL) functionality. 

A team headed by project manager Matthias Mikolasch prepared the requirements specifications. The main aim was to import all data and reconciliation criteria to a single database and to use this knowledge base to generate the many reports and analyses required for reconciliation. The team wanted a standard data integration product that would enable data to be loaded to the database and accessed. They were looking for a solution that would provide the main interfaces, import and export tools and fast, easy-to-use utilities to define processes. After an evaluation phase lasting several weeks, Hauck & Aufhäuser chose the Talend Data Integration enterprise open source solution.

The Talend solution

Talend Data Integration is the commercial version of the company’s open-source software. It provides professional support and a wide range of additional functions for enterprise environments. “We were particularly impressed by the functionality and user friendliness of Talend’s solution. The fact that it is an open source product wasn’t a decisive factor for us but it has opened up a number of interesting possibilities – including access to a well-networked Talend community,” recalls Matthias Mikolasch.

The project got underway towards the end of summer 2011. The first step involved collecting data for the implementation. Talend was then gradually deployed as the reconciliation platform over the following months. This was followed by a pilot phase, which quickly revealed the benefits of the new solution. Matthias Mikolasch was particularly impressed by the usability factor during the pilot installation. “The Talend toolset makes complex processes simple and easy to manage. Excel files, for example, are extremely important for us. With Talend, generating them is child’s play. Other data processing tools are much more complex,” reports Matthias Mikolasch. “Talend opens up a wealth of opportunities for our day-to-day business”, he adds.

Talend enabled Matthias Mikolasch to model new processes quickly and transition them to the productive environment. In fall 2011, the processes were refined to achieve the best possible data quality for reconciliation. This included incorporating all reconciliation-relevant criteria as these play a vital role in quickly and easily identifying discrepancies in asset values. These differences are at the heart of the daily fund reconciliation process. After the processes and data were optimized, the system was gradually rolled out and went live by the end of 2011 / start of 2012. Migrating to a new system supporting new processes during productive operation is always a tense time for any company. Looking back, however, Matthias Mikolasch found the migration a surprisingly relaxed affair.

The benefits

The data integration technology from Talend is now used to reconcile the special assets safeguarded by Hauck & Aufhäuser in its role as custodian bank. The first step in the reconciliation process involves importing the raw data that forms the backbone of the evaluation from external sources via secure lines and storing it in directories. The data is then loaded to the Oracle database using Talend Data Integration. Talend is also used to transfer data from a core banking system at Hauck & Aufhäuser to the database. This aggregated data is then analyzed, and the results are made available to the relevant departments in the form of Excel files, again using the Talend platform. Around 210 Excel files are automatically generated every day and sent to the relevant departments via an FTP server. The entire process is usually completed by 4 pm, with Talend supporting more and faster evaluations than was previously possible. Today, the Talend Suite analyzes around 210 net asset values (NAVs) each day. Previously, only around 40 NAVs could be evaluated in the same time window. Hauck & Aufhäuser deploys a job structure that comprises four main jobs and around 40 subordinate ETL processes. Together, these jobs and processes ensure that the data is processed without any errors and the results are output as Excel files.

“The Talend tools are easy to use,” confirms Matthias Mikolasch. “Talend also allows us to intuitively and quickly develop data integration processes. Plus the platform is stable. So far, we haven’t experienced any errors or downtime. And Talend provides us with a wide range of functions to automate our data processing steps,” he continues. The implementation of Talend at Hauck & Aufhäuser is a real success story, and the next chapter is already under discussion. The bank is already considering its data integration functionality; and Matthias Mikolasch and his team already have their eye on Talend’s Data Quality solution.