Alternative criteria for centralization of accounting subledger for financial products

Abstract

This thesis aimed to identify, categorize and evaluate the decision-making factors and approaches for the centralization of subledger for financial products utilized by financial service companies in Europe. The central research question was to find the common alternative decision-making criteria when it comes to the centralization of subledger for financial products. The master thesis based the research on qualitative methods, namely context analysis of data collected with a non-probability sampling strategy. In order to reach the aims of this master thesis, the data collected from various literature sources, including academic literature, interviews with industry experts, and IT software vendor websites was synthesized to build a general framework regarding alternative criteria for the centralization of subledger for financial products. The results indicate that there are two alternatives to the centralization of financial product subledger. The data suggests that in the financial area, multiple important criteria and aspects are influencing the decision to centralize the subledger for financial products. Using context analysis the criteria could be categorized into five thematic groups, namely strategic and economic factors, business and technical functionality, and vendor criteria. The data indicates that the strategic criteria group holds the highest importance and weight, where the financial institutions are mapping the strategic targets and goals of the company to the functionalities and capabilities of the subledger for financial products. The other criteria groups are commonly considered within the process of deciding about the centralization of financial subledger after the majority of strategic indicators are met. The criteria catalog created within the research and weighting of the importance of different factors for centralization of a subledger for financial products can be applied in practice by financial institutions in the form of guidance or a benchmark, supporting senior management decision referring to centralization of a subledger for financial products. Future research might be focused on other alternatives to the centralized subledger. The research can be also expanded with additional sampling and the implementation aspects of subledger for financial products in other regions like Asia, Africa, North and South America, and the Middle East. Their regional aspects might be further analyzed and discovered.