How to manage Operating Structure (T. O. M.) in PFFS

How to manage Operating Structure (T. O. M.) in PFFS

Description	Operating Structure Management
Version as of	8.7
Application	Pega Foundation for Financial Services
Capability/Industry Area	Financial Services

What is an Operating Structure?

• The Operating Structure is an evolution of the standard organization chart, which allows the financial institution to clearly define and differentiate various operational levels that are part of financial institution like business lines, countries, booking entities, and so on.

• It links the standard organizational structure with the work groups and work baskets. Thus, providing the ability to associate departments and work queues to each operational level thereby making it easy and unambiguous to manage and route work.

• It controls how and what products the operators can access based on their association to a given operational level.

Two key facets:

1.      Taxonomy:

It is a blueprint that defines strict guidelines and dictates how various operational levels in a financial institution must be associated to each other and how the overall structure of the institution should look like. Users can configure the taxonomy of an organization based on the business needs.

2.      Organizational Chart:

The actual realization of the taxonomy. It is the means to establish the relationships between the different operational levels in a financial institution by realizing the structure defined by its taxonomy.

Where can the operational structure be found?

You can refer UPlus Financial Services taxonomy chart shipped along with Pega Foundation for Financial Services.

1. In Dev Studio click Configure > Financial Services > Operating Structure, and select the Taxonomy tab.
2. In the View operational structure for field, select UPlus Financial Services and click Submit. Review the simulated taxonomy as an example of how to set up your taxonomy.

Creating a new operating structure

The operating structure is an asset that can be shared across different Financial Services applications. Check first if you have one for your organization already in the system. If you do not have any, you can create a new one by completing the following steps:

1. In Dev Studio click Configure > Financial Services > Operating Structure.
2. Click New.
3. In the Name field, enter a name for the bank. The ID field is automatically populated with a 6-character ID.
4. In the Top-level class field, enter the class name that will be used to maintain the enterprise class structure.
5. Optional: Modify the Calendar and Currency fields.
6. Click Submit.

Result: The system creates a new organization entity Data-Admin-Organization that is ready to sustain a new operating structure.

Defining the taxonomy of the organization

Use the Taxonomy tab to set up the blueprint for your organizational chart. The taxonomy chart defines the types of entities that appear in your organizational chart. All taxonomies should contain at least four default levels (Financial Institution, Business Line, Jurisdiction, and Balance Sheet), but additional levels can be created as required. The table below shows the different levels that can be used to build your taxonomy.

1. Click Configure > Financial Services > Operating Structure and select your organization.
2. Click the Taxonomy tab.
3. In the new taxonomy, click Specialize and select the type of business line to create.
4. Click Add to assign a new operational level to the business line.
5. Enter a name for the new level and select the level type.
6. Click Save.

Configuring your operating structure

Define the specific business lines, countries, branches, and booking entities that participate in your application, as well as the workgroups and workbaskets used by the application to manage and route the work.

A Sample Operating Structure model is shipped with Pega Foundation for Financial Services to define how to route and organize the work within an organization. The model includes two main components:

Defining Taxonomy of sample Operating Structure

Financial Institution: Represents organization for which the taxonomy is being configured. This should always be the first level of the Taxonomy.

Business Line: Represents the business segment like CIB, Retail, Wealth, and so on. This should always be the second level in the Taxonomy.

Region: Configurable level generally used to allow the grouping of jurisdictions based on geographies, for example, APC, EMEA, and so on.

Country: Operational level of type Jurisdiction that represents the country where the booking entity is located.  

Branch: Operational level that represents the booking entity. This level should always be the last level in the operational structure.

Specialize: This link allows specialization of the business lines for Commercial, Retail, Corporate and Investment banking, SMB, and Private Wealth Management.

Level type: Define the type of the operational level. The following are the type of levels shipped with Pega Foundation for Financial Services:

• Business
• Geographical
• Jurisdictional
• Balance Sheet
• JurisBalance (Jurisdictional + Balance Sheet)

The following table shows the different levels that can be used to build your taxonomy:

Level	Description	Examples
Financial Institution	Node that represents the top-level entity (your organization). Cannot be modified.	UPlus Financial Services
Business Line	Represents the different types of business that your organization manages.	Retail Banking, Commercial Banking
Geographical	Main geographical regions in which your business is present.	Americas, EMEA, APAC
Jurisdictional	Jurisdictions or countries where your business is present and that may have operated and regulatory implications.	Australia, UAE, United States
Balance Sheet	Branches or booking entities used to commercialize your products.	New York, Sydney, Madrid

Access groups: Define the access groups that are associated to an operational level.

Defining Sample Organizational Chart shipped along with Pega Foundation for Financial Services

Organizational chart: The actual realization of the taxonomy. It is the means to establish the relationships between the different operational levels in a financial institution by realizing the structure defined by its taxonomy.

Global Markets: The primary business line of the organization that follows the taxonomy defined for the default business segment.

Global Investment Banking: The business line of the Organization that manages investment banking and follows the specialized taxonomy defined for the Corporate and Investment banking business segment.

Level: Operational level defined in the taxonomy of the organization.

Calendar: Calendar configured at the operational levels.

Currency: Currency configured at the operational levels.

Departments: Number of departments that are configured for each operational level.

Business segment: The segment specialized taxonomy that the business line and its child nodes follow. Active stands for the base business level. If the business needs additional business segments, these can be added by creating field values for Business Segment field.

Important: Finalize the taxonomy of the financial institution before you start building the organization chart. Changes in the taxonomy will require deletion of the organizational chart, this will leave behind a slew of stray rules.

Business Validations for selection of level types

1. Geographical cannot be added above business level types.
2. Bottom most node always represent ‘geographical’ level type. It cannot be modified.
3. Org structure must have either a single jurisdictional and Balance Sheet level (or) both jurisdictional and balance sheet level independently. You can configure as stated below. Ex: Business > Jurisdictional > Balance sheet > Geographical Ex: Business > Jurisbalance > Geographical
4. Operation structure cannot have more than a single balance sheet level/ single jurisdictional level. Below examples are not allowed. Ex: Business> Jurisdictional> Balance sheet > Balance sheet > geographical Ex: Business> Jurisdictional> Jurisdictional > Balance sheet > geographical

Users and Access groups

• Operators must be configured to be associated to a unit and work group.

• Each work group must be manually updated to have a manager.
• Access groups must be configured to have required roles application and so on.

Utilization in CLM/KYC

Routing: The operating structure provides the ability to create work groups and work queues for each operational level. The work objects can be routed to work queues/work parties for their actions.

Product Access: The operational structure is used to define the products that an operational node can onboard for a customer. It also dictates the jurisdiction and balance sheet levels that the operator can access, there by defining the products that they can onboard.

The products that the booking entity can deal with is defined by the inclusion and exclusion tables.

• Inclusion table lists the access of an operational level to a product, implicitly providing access to all the balance sheet nodes under that operational node.
• Exclusion table is used to restrict an operational node form accessing a product that it may have gained an implicit access through the inclusion table
• For a more detailed configuration on Inclusion/ Exclusion tables, please refer this wiki article.

Removal of Taxonomy Restrictions

In Pega Foundation for Financial Services 8.7, the operating structure feature is designed to accommodate any intermediary levels in the Taxonomy and thereafter extending the Org chart with Operational levels in sync with the Taxonomy. Removing the taxonomy restrictions would help customers to extend the Org chart as and when it is required.

Any FI can change the taxonomy as and when needed and update the org structure according to the alterations without being affecting the existing Operating Structure and its associated artefacts (WQ, WGs).