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Western Alliance Bancorporation: Capturing Strategic Plan with Oracle PBCS

Western Alliance Bancorporation (NYSE:WAL) is one of the fastest growing bank holding companies in the U.S. with over $13B in Assets and 1,400 employees. Its primary subsidiary, Western Alliance Bank, provides businesses with a full spectrum of deposit, lending, treasury management, and online banking products and services. The company operates in Nevada, California and Arizona through its divisions – Alliance Bank of Arizona, First Independent Bank, Bank of Nevada, Torrey Pines Bank and Bridge Bank. The Company also provides specialized services nationally including Municipal Financing, Resort Finance, Technology Finance, Energy Infrastructure, Mortgage Warehouse Lending, and Alliance Association Bank.

Challenge
After the consolidation of three bank charters in 2013 and the acquisition of Bridge Bank in 2015, WAL realized they needed a new tool for planning and reporting on business performance due to the new reporting structure and greater regulatory scrutiny. Although they had purchased a new General Ledger (GL) package, the tool was cumbersome to administer, required additional time to consolidate, and reporting was onerous to maintain. The GL tool did not allow WAL to complete necessary segment level reporting. WAL had also been completing government mandated Sensitivity Analysis and Merger & Acquisition (M&A) activities via spreadsheets for speed and quick turnarounds. However, the spreadsheets were prone to erroneous calculations in both input and reporting, and they were not conducive to rapid reaction changes to layering in new companies and strategies.

WAL engaged Oracle® and Key Performance Ideas to implement a distributed budgeting and reporting tool to measure and manage performance and selected Oracle Planning and Budgeting Cloud Service™ (PBCS) for the following reasons:

  • PBCS is based on Oracle Hyperion Planning™ that supports enterprise wide planning, budgeting, and forecasting
  • A Cloud-based deployment model provides a no capital infrastructure investment
  • Virtually no learning curve (MS Excel based application)
  • Required minimal IT resources and is owned by Finance and Accounting
  • Built-in management reporting capabilities

Solution
WAL, partnering with Key Performance Idea’s, developed three cubes to support their performance measurement and management needs. The first cube was designed for budgeting and performance reporting on key business lines, including funds transfer pricing and cost allocations. WAL was able to budget and report via a ‘bottoms up’ method and use these baselines for Sensitivity Analysis. Because of the speed of PBCS, WAL can complete changes for sensitivity analysis, opportunities while housing detailed plans using versions.

The second cube is used for human resource planning and reporting, the largest costs associated with any banking organization. A third cube to be developed, will provide transactional level data to measure and manage costs in relation to key drivers of cost (transaction volumes, account balances, etc.).

The structure of PBCS allows WAL to incorporate planning level accounts and cost centers to roll detailed, field level submitted forecast into a new version- providing financial users the ability to make adjustments for changes in strategy without field input. Corporate Finance can also quickly test the impacts of changes in business growth and financing strategies, including adjusting the forecast based on changes in loan/deposit growth, yields/rates and funding strategy and bank ratios.

Benefits Achieved
To support their growth, WAL partnered with Key Performance Idea’s and implemented Oracle PBCS to enhance overall planning processes and provide transactional level data to measure and manage costs in relation to key drivers, as well as for human resource planning and reporting. WAL was able to move beyond traditional Financial Planning & Analysis and is now leveraging Hyperion’s demonstrated speed of consolidation to complete Sensitivity Modeling to quickly test the impacts of changes in business growth and financing strategies, including impacts of pricing and Future Market Value adjustments.

 

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