Northern Trust’s Insurance Customers Get Fast Facts About Investments

As investment decisions grow increasingly complex, insurance firms and other institutions seek faster and
more comprehensive financial accounting and reporting around their holdings. Northern Trust is finding an answer for its clients in an outsourcing solution based on Windows software from Pendo Systems, Inc.”

In today’s challenging environment, clients demand full data access and financial reporting that can be completely integrated with front-, middle-, and back-office operations,” says Peter Cherecwich, chief operating officer for Northern Trust’s global asset servicing business.

Northern Trust has come a long way since its founding in 1889, when it initially managed the assets of organizations and individuals in the local Chicago area. Northern Trust first stepped into the insurance arena in 1891, establishing the industry’s first life insurance trust. The company then launched an employee life insurance program in 1912 and an employee pension plan in 1913.

Today, with 85 offices in the United States and 18 international offices worldwide, Northern Trust provides banking, investment management, asset and fund administration, and fiduciary services to insurance firms and other corporations and institutions throughout the globe.

Over the years, the company has added a number of specialized services for customers such as accounting outsourcing, institutional market funds, securities lending, a global real estate fund, and cross-border pooling.

About two years ago, Northern Trust concluded it would gain competitive advantage by offering a financial accounting and reporting outsourcing service specific to the insurance industry. The company then embarked on exploring technologies to support such a service.

After a search process that took well over a year, Northern Trust opted to go with a Microsoft .NET-based solution, partly because so many end users are already familiar with the Windows-based PowerPoint and other software applications in the Microsoft Office suite.

Since June of this year, Northern Trust has been working with Pendo Systems and members of Microsoft’s Financial Services team to implement the solution among several small insurance firms, which are now at varying levels of deployment.

Hosted by Pendo Systems, the solution now emerging at Northern Trust uses Pendo Systems’ .NET-enabled
BasisPoint software to allow end users direct and immediate access to information about their companies’ investment holdings from their desktops.

“Information flows in and out between customers and the asset managers,” says Pendo Systems president and CEO Pamela Pecs Cytron.

According to Northern Trust, Pendo Systems was selected over two .NET-enabled rivals because of its support for sophisticated accounting operations, its quick ramp-up time, and the scalability of its SQL Server-enabled database engine and other components.

“Pendo is able to support multi-currency, multi-company infrastructures and multiple books of record for our clients, who have complex legal and regulatory requirements,” Cherecwich says.

“There were time-to-market issues, too,” says Cytron. “Northern Trust wanted to be able to begin delivering the new services quickly.”

Each component in the BasisPoint engine can be distributed to multiple machines, which have been tuned specifically to the needs of the components. Features for cross-enterprise functionality include front-office order management and trade processing; back-office accounting and operations; comprehensive reporting with data analysis; and straight-through processing from front office to back office.

The software also supplies myriad capabilities specific to investment accounting, such as time-sensitive accounting value storage, auto correction with unwind-rebuild functionality; batch cycle independence; and Industry Standard Calculation Library - TIPS.

For desktop flexibility, BasisPoint uses the XML protocol for communications between the database engine and client software. Pendo Systems’ XML DTD is able to convert information into formats such as HTML, for Web browser access.

Other user interfaces also can be created, ranging from text-based interfaces to complex desktop software written in development languages such as Ajax and Microsoft’s C#.

On the server side, the software supports the SQL Server 2000 and 2005 databases and both the 32- and 64-bit editions of Windows Server 2003.

Northern Trust expects to perform full lab tests on Pendo Systems’ solution some time after the start of 2009, and to go live with the service about a year from now.

“BasisPoint is helping Northern Trust to give our clients the freedom to focus on what really matters,” says Cherecwich.

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