First Commercial Solution to Provide Clear View of Potential Liabilities,
Profit and Loss
LONDON and NEW YORK, Sept. 23 /CNW/ - Microgen (LSE: MCGN), the
information management company, announced that it has been deploying the
Microgen Accounting Hub (MAH), which is based on the company's flagship
Microgen Aptitude business process platform (BPP), within a major North
American financial institution in order to provide improved accounting
consistency and financial transparency across multiple accounting systems.
This deployment provides the ability for the institution to deliver timely
financial transparency across its structured mortgage business, including
liabilities and profit/loss on its products.
This unique project will provide significant competitive advantage in the
current uncertain and volatile mortgage securitization market. In addition,
MAH can also handle a very broad range of financial instruments including
derivatives, mortgages, Mortgage-Backed Securities (MBS) and MBS Repo
One of the primary drivers of the current financial turmoil has been the
complexity and inter-relationships associated within the mortgage
securitization market. Over the past year, the challenges involved in
determining the liabilities of mortgage securitization products have become
increasingly high profile and the consequences of not understanding the
detailed product structure, associated counterparties and liabilities have
resulted in an unprecedented capital market environment.
The complexity of mortgage securitization is at the heart of current
financial instability. Mortgages today go through many layers of
securitization, involving multiple organizations, financial instruments and
legal entities. This has meant that tracking actual profit, loss and liability
on mortgage business has been extremely complex and difficult. It has
therefore been almost impossible for many financial institutions to understand
their financial position, particularly in the event that another player in the
interlinked web of mortgage packaging fails.
"The intricacy and interconnectedness of today's mortgage securitization
market is far too complex for most financial institutions to understand
quickly. Until now the primary tool has been the reliance on time-consuming,
manual entry spreadsheets, exacerbating the current crisis due to the lack of
a clear view of liabilities and counter-parties" said Microgen Chief Operating
Officer David Sherriff. "Our ground breaking implementation provides the
clarity, accuracy and consistent accounting information that financial
institutions need to navigate themselves out of this current crisis."
Using the Microgen Accounting Hub, Microgen's client is able to reduce
the set of flows from the legal entities in the Capital Markets business to
standard accounting events derived from the underlying mortgage products.
Every flow is separated for each level of securitization and resale, providing
a consistent and accurate view across its mortgage business. This allows the
client to understand its current financial position and liabilities, including
the ability to rapidly analyze events such as any player in the chain being
unable to meet its commitments.
The Microgen Accounting Hub is an established, modular product that
delivers the components required for the effective management of a banking
finance function. MAH manages the intelligent sourcing and validation of trade
and position data from sources such as front office or settlement systems.
Processing these trade events against business logic created for virtually all
major financial instrument types, MAH provides consistent accounting treatment
utilizing best practice templates and creating accounting postings. MAH
maintains repositories for risk, financial and regulatory reporting,
calculates cost of funding and delivers profit and loss and balance sheet
substantiation. Through its use of Microgen Aptitude, MAH is architected to
manage the high trade volumes and complex processing requirements that are
required in today's financial markets.
The Microgen Accounting Hub is the first commercial solution able to
provide consistent financial reporting across the mortgage securitization
Founded in 1974 and listed on the LSE (MCGN) since 1983, Microgen is an
established leader in the delivery of software, solutions, consultancy and
services. The Group's portfolio of proven products and solutions, many of
which are based on its proprietary Microgen Aptitude technology, enables the
intelligent application of technology in a range of sectors including banking,
energy, asset & wealth management, commercial and the public sectors.
The Group has offices in Fleet, London and Welwyn Garden City in the UK,
and international offices in the United States, South Africa, Poland, Cayman
and Guernsey. For more information, please visit http://www.microgen.com.
Copyright (c) 2008
Microgen Aptitude (R) - Patent Pending (Serial No: 1686466)
For further information:
For further information: Europe: Sophie Jarvis, Clodagh Boyle, Rainier
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Searles Gardner, Version 2.0 Communications, (857) 222-2864,