Servizio Contact Center di Gruppo

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XBRL in action the MPS experience Paolo
Lombardi, Monte dei Paschi di Siena Bank
XBRL Conference Belgrade, 18 January 2008
Groups Contact Center Distribution Channels
Dept
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Summary

• Monte dei Paschi di Siena the 3rd Italian
  Banking Group
• MPS and XBRL, since 2005
• Semantic-based business intelligence broadening
  the frontiers of XBRL usage
• Innovation the MUSING Project, www.musing.eu
• Supporting the financial risk management
  web-based services in the Basel II era role
  impact for business registers
• Lessons learned and outlook

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The Monte dei Paschi di Siena Banking Group

• The MPS Bank is the organization leading the
  Monte dei Paschi di Siena Group (Italy's third
  largest banking group).
• We pride ourselves with being the oldest bank in
  the world (founded in 1472), yet maintaining
  strong inclination for product and services
  innovation.
• Our mission is centered on Commercial Banking and
  excellence in distribution, maximizing the value
  of our 2000 active branches.

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The central message

• Semantic-based Business Intelligence broadens the
  field of applications of XBRL provides
  practical opportunities for integration of Basel
  II principles with excellence in banking
  practice.
• The Monte dei Paschi di Siena Bank is currently
  exploring such an evolution path, building on a
  few years of practical usage of XBRL.
• Todays presentation will briefly describe our
  field experience at MPS on XBRL, vis-à-vis
  Research Development activities in the field of
  Semantic-based Knowledge Management for more
  efficient banking in the Basel II-modified
  scenario.

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MPSs balance sheet in XBRL

• Since 2005, the first Italian bank to publish it
  on its website

• Filing the BS even before the Italian
  Jurisdiction was formed XBRL is a de facto
  standard

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More real life XBRL usage self-assessment

• Already in 2005, MPS Bank launched an online
  Basel II self-assessment, for SMEs operating in
  the building sector.

Real life XBRL _at_ Gruppo MPS The ANCE (the
Italian Association of Enterprises of the
Construction Industry) self-assessment service
(live at www.ance.it)
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More real life XBRL usage self-assessment

• Real life XBRL _at_ Gruppo MPS The ANCE
  self-assessment service (live at www.ance.it
  since 2005)

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Next generation business intelligence

• Performing business intelligence is a vital
  activity for the financial services industry
  (internal external info).
• The new Basel II-compliant scenario expands needs
  of both Financial Institutions and their
  Customers (enterprises as well as individuals)
  for ability of exploiting information.
• Semantic-based Business Intelligence is going to
  enable sustainable processing of
  internal/external, quantitative/qualitative,
  structured/unstructured info.
• The MUSING RD project, relying on innovative
  semantic-based technologies and with a pervasive
  usage of XBRL, is developing a set of
  e-services to support the next generation of
  (Basel II-compliant) financial risk management
  processes.

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The MUSING Initiative

• MUlti-industry, Semantic-based next generation
  business INtelliGence

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The MUSING Initiative

• A Consortium of 15 organisations (including EBR!)
  from 7 European countries carrying out a Research
  Technology Development project (2006-2010) in
  the field of knowledge management, sponsored by
  the European Commission (Sixth Framework
  Programme - IST).
• The paradigm to integrate advanced Semantic Web
  and Human Language technologies for development
  of Business Intelligence (BI) applications
  towards industries with a strong socio-economic
  impact.
• User-driven initiative, 3 industrial
  verticalisations
• Financial Risk Management (FRM)
• Internationalisation (INT)
• IT Operational Risk (IT-OpR)
• The pervasively-used standard XBRL

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Value chain in Financial Risk Management

• FRM offers a number of opportunities for
  semantic-based Biz Intelligence

FRM Value Chain
Credit Issuing and Communication
Information Processing
Risk Measurement
Credit Management
Data Acquisition
Delivery
Internal and external data acquisition
Quantitative and Qualitative information
processing
Credit scoring techniques Rating
Credit issuing and communication of information
dealing with the rating evaluation
Management of credit issuing, credit monitoring
and credit collecting process
BI product packaging and delivery
Process Description
Business Intelligence Services

• Balance Sheet-XBRL mapping tool
• Balance Sheet re-classifier
• Questionnaire Compiler
• Business Inspector

• SME Rating Tool
• Classification Rating Tool

• Payment pooler

• SME Company Profile Card

• Reputation Teller

• Business Plan Analyser

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Credit merit assessment for customers prospects
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XBRL inside

• Linking taxonomies to ontologies exploiting the
  full XBRL potential
• MUSING ontology architecture combines ontologies
  with relational tables

• XBRL represented as property taxonomy
• This is analogous to a relational table for
  balance sheets BUT
• we make the XBRL hierarchy explicit by
  subclassing
• we gain with the flexibility of labeling, linking
  metadata etc.

Original material supplied by MUSING partner DERI
(www.deri.at) is gratefully acknowledged
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Field-tested services1. Balance sheet processor

• Objective automate upload of enterprises Balance
  Sheets (e.g., into an IRB system), according to a
  given XBRL taxonomy (tested Germany Italy).
• Current performances precisiongt65, recall90.

B.S. Acquisition
B.S. Check (semi- automatically)
Upload
Data Provider
RATING PROCEDURE OF THE BANK
PDF2XBRL Information Extraction
Information formatted according to the Banks
needs
Original material supplied by MUSING partner DFKI
(www.dfki.de) is gratefully acknowledged
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Field-tested services1. Balance sheet processor
(contd)
XBRL instance
Quantitative info acquisition
Original material supplied by MUSING partner
Metaware (www.metaware.it) is gratefully
acknowledged
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Field-tested services2. Qualitative info
acquisition

• Objective automate acquisition of qualitative
  information
• Current performances questionnaire acquisition,
  linkages Balance Sheet/unstructured annex

Original material supplied by MUSING partner
Metaware (www.metaware.it) is gratefully
acknowledged
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Field-tested services3. Business Inspector

• Objective explore complex connections among
  enterprises/individuals (e.g., ownership, board
  membership, cross-borders dependencies, etc.) and
  provide navigation-like interaction to the user.

• Current performances tested on Italian data
  through Infocamere (soon expected from EBR)
• Real-time Participations Ownership Partners
  Members Powers Offices Sector of Economic
  Activity.
• asynchronous way (5 to10 mins) Annual
  Accounts Deeds.
• A modular service

Original material supplied by MUSING partner
Metaware (www.metaware.it) is gratefully
acknowledged
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The role impact for business registers

• Upside potentials in provisioning
• Ability of selling punctual data (parts of a BS
  vs the entire BS)
• Multi-country appeal sell-ability of data
• Business Intelligence as one driver to expand
  business registers business lines in value-added
  services
• XBRL as the underlying standard and
• ontologies as the natural evolution step to
  organise knowledge

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Host a pilot an opportunity to collaborate

• The MUSING Consortium proposes to selected
  institutions to host a pilot application of a
  semantic-based BI, customised service
• Part of the MUSING commitment towards the EC
• Concept designed according to a specific end-user
  need
• The value proposition Your organisations data,
  the MUSING technology

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Lessons learned and next steps

• While the XBRL local jurisdiction acts as a
  catalytic element for adoption, XBRL already
  proved itself as the de-facto standard to support
  advanced business intelligence processes in the
  banking industry, making possible to conjugate
  Basel II-compliant frameworks, process
  automation, and transparency requirements.
• The upside potentials deriving from usage of XBRL
  at business registers appears very interesting,
  especially from the financial institutions
  viewpoint, for pan-European risk assessment in
  banking (esp. for SMEs).
• MUSING is field-testing semantic
  technologies-powered Business Intelligence
  e-services supporting the banking industry in the
  Basel II era.
• The main tangible benefit is more value from
  information, arising from cost-effective
  processing of it and/or more insightful analyses.
• Linking ontologies and XBRL taxonomies.
• With a workplan up to 2010, MUSING intends to
  deliver more services for financial institutions
  and enterprises, covering (with a pan-European
  approach!) the Basel II-compliant value chain of
  Financial Risk Management.
• Our next public event an Executive Workshop in
  London, May 21st 2007.

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Thank you for your attention

• CONTACT
• www.musing.eu
• paolo.lombardi_at_banca.mps.it

Acknowledgements Support from the European
Commission, under the IST Programme, project
IST-27097, is gratefully acknowledged