Business process modelling for a central securities depository

Abstract

Purpose

The purpose of this paper is to illustrate a business process modelling approach based on: the incorporation of the best practices in the industry; higher reliability standards for operation; real‐time settlement; improved security; and transparency in the process and information handling.

Design/methodology/approach

This novel process modelling considers three major phases. First, devising a new operating model covering the following main aspects: core services, secondary services, support services, common processes for all services and, system interaction with the national and international financial markets. Second, modelling of the redesigned business processes. Third, construction of a new system.

Findings

Significant improvements in the five attributes mentioned above were achieved by incorporating a straight‐through continuous processing model with a single entry and exit channel, a new account structure, an intelligent pre‐settlement process, and by stressing transparency in every process (system log).

Research limitations/implications

The illustrated methodology represents close to 10,000 work‐hours of research and consultancy at the Mexican central securities depository –CSD (INDEVAL). Although, arithmetic results are case specific, insight knowledge can be easily adapted on other CSD worldwide.

Practical implications

International standards as well as the best international practices were incorporated in the new system. Hence, the operation of INDEVAL will be in the leading edge of financial systems.

Originality/value

The present contribution illustrates a comprehensive re‐design of a complex business environment. One of the most innovative proposals for this new model was the new pre‐settlement module which optimizes the settlement process. Moreover, the incorporation of a straight‐through continuous processing model for a securities depository provides a transparent and efficient operation for a CSD.

Citation

Romero‐Hernández, O., de Lascurain Morhan, M., Muñoz Negrón, D., Romero Hernández, S., Muñoz Medina, D.G., Palacios Brun, A.A., Oneto Suberbie, M.A. and Detta Silveira, J.E. (2008), "Business process modelling for a central securities depository", Business Process Management Journal, Vol. 14 No. 3, pp. 419-431. https://doi.org/10.1108/14637150810876706