© 2007ibm corporation soa on your terms and our expertise software ibm websphere transformation...

© 2007IBM Corporation

SOA on your terms and our expertise

Software

IBM WebSphere Transformation Extender Pack for SEPAVersion 1.0

Customer Presentation

May 29 2007


Software

What is the Single Euro Payments Area (SEPA)?

It is a regulatory requirement that eliminates the distinction between cross-border and national payments within the European Union

It requires the removal of technical, legal and commercial barriers to enable a single “domestic” payments market for the whole European Area and will significantly improve trade in the Euro zone.

It will be the area where citizens, companies and other economic actors will be able to make and receive payments in euro, within Europe, whether between or within national boundaries under the same basic conditions, rights and obligations, regardless of their location

This project aims to put an end to fragmentation by introducing, as from 2008, European payment instruments which are going to replace national ones by end-2010. The vision is that by end-2010 all retail payments in euro are carried out as easily, efficiently and safely across Europe as within national borders


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SEPA means new schemes and new processing infrastructures

Different methodologies have been adopted for :

1. Credit Transfers and Direct Debits got new Electronic Transfer Schemes (ETS) Key deliverables : SCT and SDD Rulebooks which detail core and basic services to enable a common level of service to users in a predictable timeframe

2. Card payments will get their schemes adapted Key deliverable : SCF states how issuers, acquirers, card schemes and operators must adapt their current operations to comply to SEPA


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SEPA Direct Debit (SDD) Processing

cf : Making SEPA a Reality, EPC066-06 version 1.3, page 40

• Currently important differences between the countries related to the mandate processing

• The transposition of the Directive into country law is not completed (impacts cross country DD)

• The main required changes of the bank’s processes are related to

•Mandate handling process to be reviewed and evt. rebuilt •different schemas might coexist for some time (country focused and cross country)•Same clearing and settlement actors as SCT•Same changes related to format and schema changes as SCT


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SEPA Credit Transfer (SCT) processing

• In general no important differenceto current transfer processing

• Not all types of existing credit transfers will be replaced by SCT. The actors need to ensure coexistence of the new with the existing schemas

• The main required changes of the bank’s processes are related to

•the coexistence of different schemas•the SEPA payments must apply the SEPA schemas•new / additional Clearing and Settlement actors are entering the market•The format choice given to the customers for issuing their payment orders cf : Making SEPA a Reality, EPC066-06 version 1.3, page 39


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SEPA Cards Framework

cf : Making SEPA a Reality, EPC066-06 version 1.3, page 45

• The SCF defines a series of high level principles and rules which need to be applied in SEPA

• Removal of commercial, technical and legal barriers

• Migration to EMV certified terminals with PIN pads

• Transparent pricing • Fraud prevention • ….

• Because of the technical complexity of the card systems and of the impact of SEPA has on this market (e.g.interchange fees) the definitive solutions to be implemented is still under investigation

• Belgium and Finland decided to replacenational scheme by EAPS (Euro Alliance of Payment Schemes)

Cards represent : 12 billion payment transactions and 6 billion cash withdrawal transactions per year done using 350 million cards in the Euro area


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Integration Challenges with SEPA

Transition from legacy systems to SEPA schemes will require significant investment.

Implementation of SEPA solutions across multiple geographies and national systems may lead to consolidation of small banks

SEPA’s data set (ISO 20022, a.k.a. UNIFI) is large, complex, and requires more than basic XML schema handling

SEPA’s rulebooks require not only format level compliance, but message content validation and implementation rule logic

Anticipated changes and updates to the SEPA Schema and Implementation Guidelines introduce risk to bespoke solutions

The breadth and overhead of the ISO 20022 schema, and the need to integrate with existing systems presents processing cost challenges and infrastructure architecture concerns for banks


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Extensive change across all participants

EPC Define schemes and charging conventions Define PEACH framework Define and implement certification procedures

25 National Banking / Payment Associations

Decision and timetable / transition on adoption of SEPA-compliant schemes

Decision on clearing infrastructures: fold into PEACH, merge, wind down

Review legal / contractual frameworks

8,000 Banks Transition to SEPA schemes: standards, operating

procedures, access network(s) Account number changes ? Customer education

2 million Corporate customers and government agencies

Transition to SEPA schemes: standards, operating procedures

Account number changes ? Review banking relationships outside home

member state

Service providers, operators, etc Define role and services within and/or outside

PEACH Transition to SEPA schemes: standards,

operating procedures, access network(s) Account number changes ?

Merchants Changes to terminals


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IBM provides the Industry’s Premiere Solutions for SEPA Implementation

SEPA Processor & Validation Product Offerings

SEPA Industry Framework Process & Payment Models

Integrating & Service Enabling Legacy Payment Systems

Industry Knowledge, Expertise and Best Practices


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WebSphere Transformation Extender with the Pack for SEPA can build a foundation for an Enterprise Payments Platform

Payment Processes

Data Model Based on ISO20022

Enterprise Payments Platform - Enterprise Service Bus -

Interfaces for Common Payment Functions

Gateway Services

WebSphere TXPre-built Monitoring Tools

Transform Services

ApplicationServices


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WebSphere Transformation Extender Pack for SEPA

For IBM Clients needing to develop their Single Euro Payments Area solution with

IBM WebSphere Transformation Extender.

SEPA Credit Transfer

SEPA Direct Debit

SEPA UNIFI Message and Content Validation

EPC Implementation Rules Validation

SEPA to SWIFT MT 103

Sample SEPA-Domestic converters


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End-to-end message flow and formats - Today

Bank S(sending)

Customer S(sending)

(PE)-ACH Bank R(receiving)

Customer R(receiving)

Account handling Customer S

Transfer to Bank R (via ACH)

Receive from Bank S (via ACH)

Account handling Customer R

ClearingInitiate Credit Transfer

Account Info Credit Transfer

Alternatively between large banks:Bilateral Clearing

D D D

F F

D

D

F

Domestic Format – country specific – only for in-country traffic

FIN Format MT103+ - for EU cross boarder credit transfers

PE-ACH : Pan European Automated Clearing House


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Bank S(sending)

Customer S(sending)










S S S

S

S SEPA Format

End-to-end message flow and formats – Final SEPA


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Bank S(sending)

Customer S(sending)










D S D S D S

F F

D S

D

S

F

Domestic Format – country specific – only for in-country traffic

SEPA Format

FIN Format MT103+ - for EU cross boarder credit transfers

End-to-end message flow and formats – Migration phase


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Bank interfaces and processing formats - Today

Bank

Processing in Domestic Format(existing)

Processing in FIN Format and Non-EU(existing)

D

F

D

FFrom PE-ACH Non-EU

To PE-ACH Non-EU

From Customer ACH other bank

To Customer ACH other bank


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Bank interfaces and processing formats – Final SEPA

Bank

Processing in SEPA Format(new)

S SFrom Customer ACH PE-ACH other Bank

To Customer ACH PE-ACH other Bank

Non-EU ProcessingF FFrom Non-EU To Non-EU


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Bank interfaces and processing formats - Migration

Bank

SEPA Format -> Domestic Format (country specific)

Processing in Domestic Format(existing)

Processing in SEPA Format(new)

Processing in FIN Format and Non-EU(existing)

D

S

F

D

S

F

SD

SD

DSDS

FS

SFFS

DS

FS

SF

Domestic Format (country specific) -> SEPA Format

FIN MT103+ Format -> SEPA Format

SEPA Format -> FIN MT103+ Format

S->D and S->F outbound not usefull

as all banks must be able to receive SEPA.

Inbound and outbound conversions probably

differ as different enrichment data available.

From PE-ACH Non-EU

To PE-ACH Non-EU

From Customer ACH

From Customer ACH PE-ACH

To Customer ACH

To Customer ACH PE-ACH


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Transform, validate, and enrich any document, message or complex data

Deliver trustworthy information for critical business initiatives

Meet regulatory compliance requirements

Codeless development; universal reuse and deployment

WebSphere TX: Universal Transformation & Reuse

“Make Advanced ESB More Advanced”

Embedded Standalone Event driven

MAP TRANSFORM

Advanced ESBESB

J2EE

App. ServerProcess Server

Standalone System z (native)

Windows, UNIX, Linux

Multi-In Multi-Out


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Design Studio - Map Designer

Drag and Drop Mapping

No code to write

Easily represent complex transformation rules

Local & Remote Debugging

Runs on Windows


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WTX Design Studio – Type Designer


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Why is WebSphere Transformation Extenderthe right solution for a SEPA Converter?

Natively runs in CICS, IMS and MVS on System Z, & distributed platforms

Provides Product-based maintenance updates to the SEPA formats and rules

Has massive scalability & throughput, with efficient processing of data

Recognized world-leader in financial services transformation

Reduce cost, time, and Reduce cost, time, and RISKRISK to implement and maintain to implement and maintain SEPA compliance into your existing operational SEPA compliance into your existing operational

infrastructure, now, and in the future.infrastructure, now, and in the future.

Can be leveraged by Process Server & Message broker implementations

Codeless design & customization mean easy linkages with existing systems


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SEPA Validation, Rules Compliance and Processingthrough WebSphere Transformation Extender

IBM’s Universal Transformation Engine

Thousands of Millions of Transactions and Trillions of Euros are processed by WTX across a variety of industry formats and custom data sets EVERY DAY

Provides SWIFT 15022 and 20022 (Funds) Processing for over 40% of all SWIFT messages worldwide

Can interact natively with Legacy and Service Oriented Systems

Extremely efficient processing lowers infrastructure costs and provides high throughput and scalability


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How to Get Started

IBM QuickStart for WebSphere Transformation Extender

Transforming your payment processing to meet Single Euro Payment Area (SEPA) standards

Our experts help you quickly define your transformation requirements and help you begin to develop your mapping specifications.

We lead an architectural assessment of your middleware to evaluate the requirements across your system topology.


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Further information

WebSphere Transformation ExtenderVisit www.ibm.com/software/integration/wtx

WebSphere Process ServerVisit www.ibm.com/software/integration/wps

WBI for Financial Networkshttp://www.ibm.com/software/integration/wbifn/

IBM Financial Services Solutionshttp://www.ibm.com/industries/financialservices/index.jsp

Single Euro Payments Area (SEPA)visit http://www.europeanpaymentscouncil.eu

© 2007ibm corporation soa on your terms and our expertise software ibm websphere transformation...

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