According to Dirk Dewitte, Director of Accounting & Reporting at CrÃ©dit Agricole / Landbouwkrediet, "Our selection process was longer and more detailed than we at first anticipated, but in the end we are pleased to have made the extra effort. There is not so much knowledge in the market regarding IAS / IFRS and Basel II so we were not only looking for a partner who could demonstrate functionality, but also had the intellectual capital to help us through the challenges."
He goes on to say, "Quite early on we realised that IAS / IFRS and Basel II had many synergies and so we were focused on finding a solution to address both. We started with a long list of potential suppliers, but by around October 2003 we were down to a two-horse race. The final stages of selection involved us commissioning scoping studies from both parties and we also asked to see a portfolio of around fourteen deals, some of which were quite complex, processed in a test environment."
FERNBACHâs FlexFinanceÂ® solution will be implemented in a phased approach. The first phase will be the IAS/IFRS components in time for January 2005, the next phases starting in 2005 are expected to be the addition of the Hedge Management and Hedge Accounting components and the Basel II Standardised Approach. It is then anticipated that Basel II IRB Foundation Approach will be implemented some time after 2006.
Patrick Lewahert, Managing Director at CrÃ©dit Agricole / Landbouwkrediet, points out, "There were strong arguments in favour for both the final two suppliers, however in the end the Steering Committee and Strategic Committee were unanimous in their choice and presented the Management Committee with only one real option, so the decision was taken. We feel confident that in FlexFinanceÂ® we selected the low-risk solution and we are looking forward to working with FERNBACH."
Alan Goodrich, Director of International Sales at FERNBACH, comments, "We are very excited and proud to have CrÃ©dit Agricole / Landbouwkrediet as a new client; it represents a key account in our international development strategy. Right from the beginning, it was clear that this would be a hard-fought sales campaign and we are very pleased to have won in a new market against some respected local competition. We are also grateful to our partners, CRONOS and ORACLE, for their strong support."
He continues, "During the selection process, it became increasingly evident that CrÃ©dit Agricole / Landbouwkrediet understood the complex challenge that IAS / IFRS represents and that the focus would be on content, and not just form. In general, the deeper our prospects wish to analyse the potential solutions, the better we feel able to differentiate ourselves.
"There seem to be a growing number of IAS / IFRS offerings in the global market, but often the question is; are they really only referring to the final form, or are they also able to provide the content? Coming from an ALM and risk management background, FlexFinanceÂ® is able to take raw deal data, thus minimising the impact on existing core systems, and then do the product splitting, cash flow generation, calculations of effective interest rate, amortised cost, and fair value for IAS32 and IAS39, as well as build, manage and test the effectiveness of hedges. This information is then used to generate the correct individual or summarised booking entries into the accounting general ledger system of choice. All this is done in an auditable, traceable way with on-line drill-down facilities, and at the end we can support delivery of the results in electronic formats such as XBRL, or paper form", he concludes.