Active Technologies - HRL

Active Monitoring for STP in Financial Markets | 30/10 © 2003 IBM Corporation

Active Monitoring for STP in Financial Markets

Tali Yatzkar Haham

2 Active Monitoring for STP in Financial Markets | 30/10 © 2003 IBM Corporation

Outline� Introduce the Transaction Flow Monitoring application

� Global Integrated Monitoringfor a business process across the company and external parties

� Real time Alerts, Status, Queries

� Applies to many domains (retail, ordering systems, insurance,…)

� Present the underline Active Technology tool - Amit Situation Manager, ADI

� Will be introduced in the financial market domain that is goingtrough a STP revolution

3 Active Monitoring for STP in Financial Markets | 30/10 © 2003 IBM Corporation

STP – Straight Through Processing

STP / Business Efficiency Definition:

“ Automating internal and external trade processing

from inception to completion in real time”

4 Active Monitoring for STP in Financial Markets | 30/10 © 2003 IBM Corporation

Business Drivers for STP/Business Efficiency

� T+1 Settlement Regulation

� Increased Trade Volumes

� Cost Savings

� Lower the risk (longer to settle trade, greater the risk)

5 Active Monitoring for STP in Financial Markets | 30/10 © 2003 IBM Corporation

Transactions are complex…

�

O rd e r M a n a g e m e n t S ys te m E xe cu tio n M a n a g e m e n t

O p e n O rd e r

23

S M C P

va lida te the se c u rity

v a lid a te the P a rty & ac c o u n t

4

E x c h a n g e

T ra n sa c tio n M a n a g e m e n tC a lcu la tio n sF ig u ra tio nA llo ca tio nS e tle m e n t D e ta ils *

A M = A cco u n t M a s te rC P = C o u n te rp a rtyS M = S e c u rity M a s te rF C = F e e s a n d C h a rg e sF R = F e e s a n d ch a rg e s ru le sS I = S e tle m e n t In s tru c tio n s

A M

R e fe re n c e D a taO p e ra tio n & Tra n sa c tio n D a ta

O rd e r1

In v e s tm e n t M a n g e r

O p e n O rd e r

up d a te s o pe n o rd e rs w ith f il ls

R e q ue s t fo r E x ec u tio nN o tific a tio n o f C o m p le tio n

B lo c k tra de

M e ssa g e /T ra n sa c tio n /F lo w

5

6

7

8A llo c a tio n s , N e t p ro c e ed s , a ffirm s , c o n firm s

C on firm a t io n a n d A llo ca tio n

9F u lly fig u re tra d e

P u rc h a s e & S a le sC le a r in g

S M 3 C P 3A M 3

S e ttle m e n t

S I2

1 0 S e tt le m en t In s tru c tio n a n d P aym e n t

C P 2 F C F RA M 2S M 2 S I1 *

F ro n t-O ffice

M id d le -O ffic e

B a c k -O ffic e

6 Active Monitoring for STP in Financial Markets | 30/10 © 2003 IBM Corporation

STP Impediments

Existing IT systems are built from many applications that are:

� Typically designed to accomplish one narrow function� Data focused rather than business process focused

Missing:Global integrated monitor that � receives events from all the applications, � correlates the incoming events with information

about the structure of the business process

7 Active Monitoring for STP in Financial Markets | 30/10 © 2003 IBM Corporation

Our Application: Transaction Flow Monitoring

Real Time Alerts / Data

Easy to Change / Add

Alerts, Status, Queries

Provides Global Integrated Monitoring

Alerts, Status, Queries

Low Integration Cost,No need for technical staff

Low Maintenance Cost,Dynamically respond to

business changes

Easy to Define

No Code

High Control,Identify Needed

Improvements (BP, IT)

Immediate Repair Reaction,

Reduced Penalties

Capabilities: Benefits:

8 Active Monitoring for STP in Financial Markets | 30/10 © 2003 IBM Corporation

Transaction Flow Monitoring

Goal:Monitor transactions,

through their process flow

from inception to settlement

� Alerts

� Status

� Queries

“$ volume, comparing to expectation, at each time point”“% of exceptions”

“Details of rejected transactions of specific client”

“The # of transactions that are waiting for manual repair crossed a given threshold”“Three rejects for the same platinum client received today”

9 Active Monitoring for STP in Financial Markets | 30/10 © 2003 IBM Corporation

Transaction Flow Monitoring Architecture

EnterpriseApplications

External Parties

IncomingEvents

EnterpriseDB

����

ADI

SituationManager

Definition GUI

App DB

Status

Query

Alert

Monitors:

10 Active Monitoring for STP in Financial Markets | 30/10 © 2003 IBM Corporation

Amit – Situation Manager

AmitSituationManager

EventSources

Definitions

DetectedSituations

11 Active Monitoring for STP in Financial Markets | 30/10 © 2003 IBM Corporation

Amit - ADI

� Models and Monitors entities and dependencies

Our application uses subset of ADI capabilities:� Model and monitor Entities, using State machines

� Our Entity: Trade� State Machine: The trade business process

The state machine is manipulated by eventsThe state machine triggers events and alerts

12 Active Monitoring for STP in Financial Markets | 30/10 © 2003 IBM Corporation

Created

Rejected Cancelled

TimeoutViolation

Sent

Waitingfor repair

Pending

Acknowledged

Completed

a b

c

b

de

e e

e

e

f

cgi

jb e

h

ADI monitors transactions entities• Triggers events for database updates• Alerts on violation of transaction processing

Transaction’s State Machine

CreateException

CancelSent

ERROR!

13 Active Monitoring for STP in Financial Markets | 30/10 © 2003 IBM Corporation

Transaction Flow Monitoring - Summary

�Real time Alerts, Status, Queries

�Global Integrated Monitoring for a business process across the company and external parties

�Applies to many domains (retail industries, ordering systems, insurance,…)

Key Advantages:� Resilience – XML definitions, no code, easy to define, easy to change� Expressiveness - expressive alert language

Status:� Generated substantial interest with IBM financial services leaders� Key component in proposal for a large financial institution

Active Technologies - HRL

Active Monitoring for STP in Financial Markets | 30/10 © 2003 IBM Corporation

Active Monitoring for STP in Financial Markets

Tali Yatzkar Haham

15 Active Monitoring for STP in Financial Markets | 30/10 © 2003 IBM Corporation

What is an on demand business?

Has business processes that are:

� Integrated end-to-end across the company

� Integrated with key partners

� Dynamically responsive to changes

16 Active Monitoring for STP in Financial Markets | 30/10 © 2003 IBM Corporation

Application Definition Input

In XML:� Events� State Machine� Alerts

In SQL like:� Status � Queries

17 Active Monitoring for STP in Financial Markets | 30/10 © 2003 IBM Corporation

Alert Examples

Transaction Level Alerts:

� No acknowledgement/reject received from FRB within one hour fromsending a message.

� Processing of an order will breach the client's credit threshold. Urgent alert if we are approaching FRB Funds close.

Business Level Alerts:� Abnormal number of payments received from a specific bank

(account) within the first two hours or business.

� Three rejects received from FRB, within a single working day, for the same platinum client.

18 Active Monitoring for STP in Financial Markets | 30/10 © 2003 IBM Corporation

Alerts Monitor

19 Active Monitoring for STP in Financial Markets | 30/10 © 2003 IBM Corporation

Status Monitor

Displays:

� Updated overall state

� # of transactions at a specific process state,

� $ amount of those transactions

� # of transactions that violate SLA

20 Active Monitoring for STP in Financial Markets | 30/10 © 2003 IBM Corporation

Status Monitor

21 Active Monitoring for STP in Financial Markets | 30/10 © 2003 IBM Corporation

Queries Monitor

Presents the user with a list of query templates

Query Template Examples:

� Present the reject reasons for specific customer transactions

� Present the number and the total dollar amount of rejects for a specific reason

22 Active Monitoring for STP in Financial Markets | 30/10 © 2003 IBM Corporation

Queries Monitor