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OP – Specification and implementation of a regulatory reporting solution

OP-Pohjola Group is the largest financial group in Finland. The group’s business is divided into three areas: banking, non-life insurance, and wealth management. The group consists of nearly 190 independent cooperative banks and their central cooperative OP-Pohjola, with its subsidiaries and related communities.

The scope and individual structure of the group greatly influenced the planning of the FINREP credit institution reporting reform project in OP-Pohjola. FINREP reporting is based on the technical reporting standards defined by the European Banking Authority (EBA). The aim of the standard is to harmonize reporting and supervisory practices at the EU level. Harmonized reporting will enhance supervision of the authorities and enable comparisons between banking institutions in different EU countries.FINREP reporting applies to credit institutions, investment firms, and management companies. The reporting consists of the income statement and balance sheet, supplemented by additional tables, and comprises three different sets of reports; in total, hundreds of reports in a multi-bank environment.

A trusted partner for regulatory reporting

The financial group OP-Pohjola chose Loihde to carry out its FINREP credit institution reporting. Tarja Konttinen, Head of Business Data Management at OP Services states: “Loihde is our long-term data processing partner, so we knew their expertise and therefore the choice was easy.”

The project carried out for OP-Pohjola consists of a technical planning phase and subsequent iterative specification, planning, implementation, and testing phases. The project uses an agile project method, Scrum, which has been proven to be well suited to projects where the content (e.g. specifications by the authorities) may change as the project progresses.

After careful consideration, the OP-Pohjola Group decided on SAS’s Basel II comprehensive solution, which Loihde also helped set up. One of the most important system requirements was that all parts of Basel can be managed with one and the same solution, which covers solvency calculation, customer credit rating, and the development of different risk management methods and models.