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Effective Automation Reimbursement in the private banking sector in Germany Olaf Hartenfels Deposit Protection and Trust Company, Cologne . Claims Management: Reimbursement to Insured Depositors 2 – 4 December 2013 Taipei, Taiwan. Outline.

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claims management reimbursement to insured depositors 2 4 december 2013 taipei taiwan

Effective AutomationReimbursement in the private bankingsector in GermanyOlaf HartenfelsDepositProtectionand Trust Company, Cologne

Claims Management: ReimbursementtoInsuredDepositors

2 – 4 December 2013

Taipei, Taiwan

outline
Outline

Short overviewofreimbursement in Germany

IT-tools

Basics aboutsafetynet in Germany

„EAEG presenterdatafile“

Auditing the EAEG presenterdatafile

basics three categories of banking business
BasicsThreeCategoriesofbankingbusiness

Supervisory Authority

Private commercialbanks

Public Sectorbanks

Cooperativebanks

2 DGS

Institutionalprotectionscheme

basics german deposit guarantee scheme
BasicsGerman DepositGuaranteeScheme

German Banks CompensationScheme

Statutory

„basic cover“ upto € 100.000

Auditing Institution forthedepositprotection System

DepositProtection Fund

Voluntary

30% relevant liablecapital

basics task and services of the auditing association
BasicsTask andservicesofthe Auditing Association

Auditing Institution forDepositProtection Fund (ESF)

andCompensationSchemeof German Banks (EdB)

  • 175 memberbanks
  • Depositprotectionaudits
  • Admission andownershipcontrol
  • Other riskmanagementactivitiesfordepositinsurance
  • In addition: Audits 50 bankswhichonlybelongstotheEdB
  • www.pv-banken.de
basics
Basics

Affiliatedcompaniesofthe Auditing Associationof German Banks

services of the affiliated companies
Services oftheaffiliatedcompanies

Conducting annualaudits non-bank/near-banksector

IT internalauditmandates , carrying out admissionaudits

www.wpg-revision.de

Conductsratingprocedurefor all memberbanks

on behalf ofthe Auditing Association, independent

externalratingcompany , ESMA registered andcertified CRA

www.gbb-rating.de

IT auditsandadvice, dataprotection, softwarecertification

www.gdb-beratung.de

Examiningandpayingdepositorclaimsforcompensation, supportingadministrators, assetliquidation

www.eis-treuhand.de

reimbursements in the past years
Reimbursements in thepastyears

2001

2001

2006

Bremer-haven

2003

Berlin

2002

2008

Düsseldorf

Dresden

2008

Frankfurt

2010

Bad Mergentheim

2002

Singen

reimbursement
Reimbursement

Depositors

AmountofDeposits

800

8.200 Mio. $

12.000

160 Mio. $

1.900

24 Mio. $

93 Mio. $

57.000

different types of banks
Different typesofbanks

small

big

Size

standard

selfproduced

IT-System

structured

plainvanilla

Product

local

international

Branches

institutional

privat

customer

reimbursement of depositors since 2011
Reimbursement of depositorssince 2011

Periodfordeliveringthedatafile

No claim of compensation

Compensationofincomingregistrationswithin 20 businessdaysfrom determinationof compensation event

Compensation of incoming registrations within 20 business daysfrom date of receipt

reimbursement of depositors since 20111
Reimbursement of depositorssince 2011

Announcing thecompensation event

Analysing and preparingbank data

Creating and posting the forms to submit claims

Calculating and disbursingthe compensation claims

Reporting (internal / external)

Observating external interfaces

Checking and establishingthe consistency of bank data

Ordering of interest accrualon a daily basis

Monitoring IT including infrastructure

Personnel Administration

eaeg einreicherdatei
EAEG-Einreicherdatei
  • Variousformsofdatainput / Data output
  • Data integrity
  • Analysis of large datasets
  • Specificdata-analysisfunctions
  • Skripts
  • MS Access baseduserinterface
  • Using VBA-Scripting forprogramlogic
  • SQL database
  • Modular design
acl invcomp
ACL / InvComp

Internal accounting data

Insolvent institut

Compensationdata InvComp

Check lists formanualverification

Datapreprocessing

Ongoing monitoringof claim forms

EAEG presenterdata file

Capture todocument stacks

Data preprocessingInvComp

ACL

Compensationdata

Creatig file forinternal acc. data

Letters forcustomer

Creating file for payment system(SEPA)

Info. Sheet /Form to submit claim

Variousreports

SEPACredit Transfer

Third institut

InvComp

reimbursement of depositors since 20112
Reimbursement of depositorssince 2011

Deposit Guarantee and Investor Compensation Act (EAEG)

"… the institution shall make the documents necessary for the creditors’ compensation available to the compensation scheme promptly, and at the latest within one week."

"The compensation scheme shall meet duly examined claims […] no later than 20 working days".

eaeg presenter data file
EAEG presenter data file

Version 3.0

Data file content

Unique key values

Data file format

German Regulation on the Accounting of Credit Institutions and Financial Institutions (Verordnung über die Rechnungslegung der Kreditinstitute und Finanzdienstleistungsinstitute – RechKredV)

Storage type Text file with field delimiters

Numerous Unification for certain key values:

Character set In accordance with DIN 66003:1999-02

“liabilities to customers” [liability item 2] in Section 21

Field delimiter *("Asterisk" – ASCII Hexcode X'2A')

Range of values for "Exclusion indicator"

In addition:

End-of-record characters CRLF["Carriage Return" (ASCII Hexcode X'0D'), followed by "Line Feed" (ASCII Hexcode X'0A')]

Range of values for "EdB key" data field

“contingent liabilities” (liability item 1 under the line) in Section 26

“claims on customers” (asset item 4) defined in Section 15

outlook for future
Outlook for future

Realisation and/or support by

Version 3.0

Proposal for a directive on Guarantee Schemes

COM(2010) 369 / July 2010

Reducing the payout deadline from twenty to seven days

Provision of information about eligible and covered deposits at any time after request of DGS

Tagging of all non-repayable deposits in system

Possibly benefits when calculating contributions for DGS

information
Information

Member bankswereinformedby German Private Commercial Banks CompensationSchemefor Investors (EdB)

Liability to create EAEG presenter data file

Audits of correctness advised

support
Support

Supportvia email

Test

datafiles

spezifikation@einleger-entschaedigung.de

Review

experiences auditprocess
Experiences & Auditprocess

Review concerningtestdatefiles

Highlights in % regarding total numberoffiles

Database(incl. accruedinterest)

85%

Joint accounts / SCV

43%

Marking / Tagging

35%

Technical correctness

(length, form, type ofdatafields)

32%

Debitors

28%

Others

43%

auditing goals
Auditing-Goals

Section5 (4) EAEG:

Content ofdelivered

EAEG presenterdatafile

hasqualitytoreimbursewithin 20 days

Section 5 (2) EAEG:

EAEG presenterdatafile

hastobedeliveredby

bankwithinoneweek

auditing frameworks
Auditing Frameworks

Section 9 (1) of Deposit Guarantee and Investor Compensation Act (EAEG)

“The compensation scheme shall perform regular and ad hoc audits of the institutions assigned to it in order to assess the risk of a compensation event occurring.”

slide30

Forexample

auditingat:

Request tobankformakingavailablespecific

dataanddocuments

A-Bank

EAEG presenter data file D-Day 18th March

Daily balancesalso per 18th March 2013

Illustration of all depositproducttypes

A-Bank has per D-Day 18th March 2013

Overviewaboutandgrantedaccessto all blockagecodes A-Bank has in hismainIT-application, usingtoadmindepositproducts

IT-deskduringauditingincl. righttogetinformationsaboutclients, accountsandtransactions

Access tocustomercontractdocuments

for relevant clients

data base
Data base

Buildingdatabaseof

EAEG presenterdatafile

Liability against customers

Loans against customers

Contingent liabilty

EAEG presenter data file

Non-eligible

eligible

covered

Missingdataofclientsand/orclients-balances

in caseofwrong-buildeddatabase

data base1
Data base

System 1

Buildingdatabaseof

EAEG presenterdatafile

System 2

Liabilityagainstcustomers

Liability against customers

Loans against customers

Loansagainstcustomers

Contingent liabilty

Contingent liabilty

EAEGpresenter data file

EAEG-Einreicherdatei 1

EAEG-Einreicherdatei 2

eligible

Non-eligible

covered

data base2
Data base

Example

Client K.

System 1

System 2

Buildingdatabaseof

EAEG presenterdatafile

70.000 Euro

40.000 Euro

Compensation

110.000 Euro

EAEG presenter data file1

EAEG presenter data file 2

eligible

Non-eligible

eligible

nicht entschädi-gungsfähig

covered

covered

data base accrued interest
Data base / accrued interest

18.03.

§ 5 (1)EAEG

Compensation event

31.12.

30.03.

31.12.

Buildingdatabaseof

EAEG presenterdatafile

Accruedinterest

Product-types

Current account

Savings

Fixed-term

deposit

Accruedinterest

data base data form
Data base / data form

Incorrect individual- and aggregate balances

  • Marking of debit- and credit balances
  • Thousands separator

Data form(technical)

1.000,00

1,000.00

Compliance ofinformationobligationdelayedormissing § 5 (2) EAEG

Mainstrasse 14

Data field-length:

data base debit balances
Data base / debit balances

Missingconsideration

Depositors with debit balances

Data basebank

Missingconsideration

Consideration clients only with debit balances

EAEG presenter data file

Accrued interest for debit and credit balances

data base debit balances1
Data base / debit balances

Consideration clients only with

debit balances

Depositors with debit balances

Data basebank/ EAEG presenterdatefile

Missingconsideration

Consideration clients only with debit balances

Accrued interest for debit and credit balances

data base debit balances2
Data base / debit balances

Accrued interest for debit

and credit balances

Depositors with debit balances

Data basebank/ EAEG presenterdatefile

Missingconsideration

Consideration clients only with debit balances

Accrued interest for debit and credit balances

audit background
Audit Background

Organisational basics

Programming order-, test-, release- andlivegoing-proceedure

Definition of functional responsibility

Method description

further necessary checks
Further necessarychecks

Further datahastobe check:

Level of coverage

Consistenceofclientdata (name, adress, dateofbirth…)

Consistenceofaccountdata (numberaccountholders, due date..)

audit report
Audit-report
  • EAEG presenterdatafile was deliveredwithinthelaw (oneweek)
  • Content isconvenienttoreimburse in 20 days

Audit-reportby

Federal Financial Supervisory Authority (BaFin)

Addressed

audience

EdB

slide42

Olaf Hartenfels Fon: +49-221-91 26 97-412 Fax: +49-221-91 26 97-470

o.hartenfels@eis-treuhand.de

Thankyou!