Accounting systems cannot be changed, but self-assessment can. —A case study from a regional bank

"The accounting system cannot be changed immediately."

This is the most common comment we hear from our regional bank clients. "Our shared centralized accounting system is operating stably. There have been no major outages, and daily operations are running smoothly. However, upgrading would require significant investment and coordination with other banks, and the next upgrade is several years away. Realistically, it's not something we can address immediately."

Regional bank B (hereinafter referred to as Bank B) was in exactly the same situation. With total assets of approximately 2 trillion yen and about 30 branches, the bank, which maintained sound management rooted in the local community, had a stable accounting system, and its core operations of deposits, foreign exchange, and loans were running smoothly. However, the semi-annual "self-assessment" was a different story.

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Self-assessment projects launched every six months

The first person to contact us was Mr. Y, the head of the information systems department at the bank. "When it's time for self-assessment, the entire bank comes to a standstill." His words were by no means an exaggeration.

At branch offices, loan officers transcribe financial statement information, collateral valuations, transaction status, etc., into multiple Excel spreadsheets and submit them to headquarters. After submission, the loan management department requests revisions, requiring resubmission. This involves a continuous process of checking which version is the latest and which figures have been corrected, navigating emails and shared folders.

At headquarters' loan management department, CSV files output from the accounting and rating systems were integrated into Excel and processed using custom macros. The number of files exceeded 100, and some of the logic was carried over from previous employees. Difference checks were done manually, and revision history was scattered across emails. Some processes were understood only by the person in charge.

Furthermore, in the Risk Management Department, the figures were not finalized even when it came time to prepare materials for management meetings, and adjustments continued right up until the meeting. There were cases where the preliminary figures and the final figures differed, and instead of discussing the "risk strategy" that should have been the focus, time was spent "checking the consistency of the numbers." Mr. Y recalls:

"We've implemented RPA, and we're making progress with partial automation. But overall, things haven't gotten any easier. In fact, I feel like we're doing more adjustments."

Self-assessment had become less of a regular job and more of a "semi-annual event-type temporary project."

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Replacing the accounting system was not a realistic option.

So, would a complete overhaul of the accounting system solve the problem? The bank's accounting system is a shared center type, making independent modifications difficult. A complete overhaul would require an investment of several billion yen, and coordination with other banks would be unavoidable. The next overhaul is scheduled for several years from now, so bringing it forward was not realistic. However, a self-assessment is coming up in six months.

"Is there any way to change the current situation?"

This was the question for row B.

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The core of the problem is not "data integration" but "process fragmentation."

Our initial approach wasn't to propose a system overhaul. We started by visualizing the data flow and business processes involved in self-assessment. What emerged wasn't system obsolescence, but rather process fragmentation. The data itself existed. However,

• The timing of acquisition varies by department.
• The processing logic is scattered throughout Excel.
• Bottlenecks occur when departments are connected in a series structure.
• I can't track the change history.

In other words, the problem wasn't that there was "no data," but that "the data wasn't integrated and the workflow wasn't designed." Self-assessment was just a "collection of tasks," and there was no overall process design in place.

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Optimizing business processes and ensuring governance through data integration platform

Therefore, we proposed a process redesign using a "data integration platform" that reconnects distributed systems and data, without altering the core accounting system.

Data related to self-assessment is highly confidential, and ideally, it should be handled entirely within the accounting system or loan support system. However, modifying existing systems is costly and time-consuming. On the other hand, patchwork automation using RPA or Excel macros lacks governance and inevitably leads to a black box environment.

The solution we arrived at was to build a dedicated data integration platform governance that can withstand audits" without making any changes to existing systems.

Processing logic that was scattered across Excel spreadsheets has been migrated to the platform, and manual, person-dependent tasks have been replaced with standardized processes. Who changed which values and when is visualized as a history, and unsubmitted data or discrepancies are automatically detected and immediately notified to the relevant departments. Self-assessment has shifted from a semi-annual event to a continuously updated process.

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Results in numbers, and their ripple effects on business.

Since its implementation, clear results have been observed in row B.

• Significant reduction in man-hours: Self-assessment-related work, which previously took approximately 4,000 hours per half-year across sales offices (approximately 30 stores) and headquarters, was reduced by 40% (approximately 1,600 hours) to approximately 2,400 hours.
• Reduced lead time: The time until data confirmation has been reduced from 4 weeks to 1.5 weeks.
• Improved quality: Consistency errors were significantly reduced, and audit response time was halved.

However, the biggest change is not in the numbers.

"We can now have strategic discussions."

These words from management were symbolic. They were able to move beyond being preoccupied with finalizing figures and secure time to discuss portfolio quality and risk-taking policies. More agile management decisions became possible based on highly accurate rating information. The improvement in self-assessment led not merely to increased operational efficiency, but to an upgrade in the management foundation.

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Business transformation starting with self-assessment

Are you experiencing any of the following challenges in your self-assessment process?

• The team is exhausted every time they have to conduct self-assessments.
• The number of Excel files continues to increase.
• The macros that are specific to each individual have become a black box.
• There is a difference between the preliminary and final figures.
• The accounting system cannot be changed for the time being.

These may not be system limitations, but rather challenges in process design. Business processes can be changed without altering the accounting system. Self-assessment can be the first step.

Bank B's approach is by no means an isolated case. Many regional banks likely face similar structural challenges. Why not start by objectively visualizing your own bank's self-assessment process? Revising your business workflow has the potential to transform the next half-year.

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The person who wrote the article

Affiliation: Data Integration Consulting Department, Solution Architect

K. F

In his previous job, he worked in sales and in-house system engineering at a financial institution. After joining Saison Technology, he worked as a pre-sales representative, supporting proposals and planning services related to data integration platform, while also promoting data utilization methods in the financial field. His hobbies are watching baseball games, visiting hot springs, and watching movies.
(Affiliations are as of the time of publication)