PeopleSoft Funds Transfer Pricing

To properly calculate profitability, financial services firms need to assign a value to the funds provided by depositors and a cost to the funds used by asset-generating units. By knowing its costs, a lending institution can more effectively set prices and structure products as well as concentrate on raising or lending funds, instead of on interest rate risk.

Oracle's PeopleSoft Funds Transfer Pricing enables you to calculate margins and align management decisions with current market conditions and Asset Liability Committee (ALCO) objectives. You establish the rules for determining internal charges and credits to your business units based on instrument characteristics like risk, repricing, and optionality. Because it's pure internet, PeopleSoft Funds Transfer Pricing makes it easy to distribute information to anyone, anywhere, in the format you define.

Centralized Operational Finance

• Compare interest margins of alternative sources and uses of funds.
• Establish targeted returns and calculate profitability from the instrument level.
• Transfer interest rate risk from the operating units to the central treasury.

Transparent Audit Capabilities

• Determine the economically appropriate charge or credit for each asset and liability on your balance sheet.
• Create and apply methodologies and allocations consistently across the enterprise.
• Reconcile allocations to the ledger and easily view the methodologies applied to an instrument.

Strategic Goal Setting and Analysis

• Identify the products, channels, and customers that contribute to or detract from shareholder value.
• Determine cost of new projects and investment opportunities.
• Help your ALCO make strategic pricing decisions.

Portfolio Modeling

• Import third-party and market data, and process it with performance data to generate customized yield curves that accurately represent your alternative cost of funds.
• Model the way specific customers will respond to interest rate changes.
• Forecast product-pricing rates and predict future interest rate spreads between product yields and market rates, and between asset and liability products.
• Generate actual or projected cash flows using product pricing and interest rate sensitivity.
• Project the effects of loan prepayments and deposit runoffs on future cash flows.