mis 3090: it for financial services
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MIS 3090: IT for Financial Services. Bond Market Technology and Web Services. October 26, 2014. Bond Types. Agency (governmental) Mortgage-backed (see MBS) Ginnie Mae, Fannie Mae, Freddie Mac Pay higher rate than treasury bonds Sallie Mae riskier than mortgage backed (!) Municipal - PowerPoint PPT PresentationTRANSCRIPT
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MIS 3090:IT for Financial Services
Bond Market Technologyand Web Services
April 20, 2023
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2/20April 20, 2023
Bond Types
Agency (governmental) Mortgage-backed (see MBS)
Ginnie Mae, Fannie Mae, Freddie Mac Pay higher rate than treasury bonds Sallie Mae riskier than mortgage backed (!)
Municipal State, local governments and utilities Free of federal and some state and local
taxes
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3/20April 20, 2023
Bond Types (cont.)
Corporate – used to fund long-term projects Riskier, so higher return Convertible Callable Zero-coupon
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4/20April 20, 2023
CBOTCBOT Open outcry market located
around auction pits Electronic trading is available
through e-cbot Links to LIFFE as part of
Euronext and Eurex
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5/20April 20, 2023
IT and APIsIT and APIs
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6/20April 20, 2023
Schwab issues periodic alerts as to new bond
issues
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7/20April 20, 2023
self-service model
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8/20April 20, 2023
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9/20April 20, 2023
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10/20April 20, 2023
Auctions are announcedAuctions are announced
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11/20April 20, 2023
The government is acting as its own
broker – there is no need for an
intermediary in order for you to
become an investor.
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12/20April 20, 2023
Bond Market Association
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13/20April 20, 2023
Information sources on bond types…
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14/20April 20, 2023
Don’t forget corporate bond…
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15/20April 20, 2023
Municipal bonds used to finance important ventures…
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16/20April 20, 2023
EDI, EFT, and Web Services
EDI – Electronic Data Interchange Been around for ages; low tech >100,000 businesses use this
Financial EDI – for exchange of paymentsEFT – any transfer of funds via electronic means Used by banks and government
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17/20April 20, 2023
Electronic Data Interchange Electronic Data Interchange (EDI)(EDI)
Materials releasesprice updates
Shipping notices
Discrepancy reports
Payments
remittance information
XX
XX
Invoice
Order Management
Shipping Department
Accounts Receivable
Invoice
Purchasing Department
Receiving Department
Accounts PayableX X
System SystemP. O.Order
Via USPS
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18/20April 20, 2023
What an EDI Invoice Looks What an EDI Invoice Looks Like…Like…
ISA*00*0000000000*01*01*PASSWORDME*01*123456789bbbbbb*9 87654321bbbbbb*890714*2210*U*00204*000000008*0*P*: GS*IN*012345678*087654321*900509*2210*000001*X*002040 ST*810*0001 BIG*900713* 1001 *950625*P98932 N1*BT*ACME DISTRIBUTING COMPANY N3*P.O. BOX 33327 N4*ANYTOWN*NJ*44509 N1*ST*THE CORNER STORE N3*601 FIRST STREET N4*CROSSROADS*MI*48106 N1*SE*SMITH CORPORATION N3*900 EASY STREET N4*BIG CITY*NJ*15455 PER*AD*C.D.JONES*TE*618555823 ITD*01*3*2**IO ITI**3*CA*12.75**VC*6900 ITI**12*EA*.475**VC*P450 ITI**4*EA*.94**VC*1640Y ITI**I*DZ*3.4**VC*1507 TDS*5111 CAD*M****CONSOLIDATED TRUCK CTT*4*20 SE*21*000001 GE*1*000001 IEA*1*000000008
ST 810 means invoice
EDI Implementation Conventions set the rules for the data stream
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19/20April 20, 2023
The Path to Web ServicesThe Path to Web Services Motivation: information must be shared across platforms EDI
– Relatively inflexible– Expensive to maintain– Mainframe-era, so what happens when servers appear?
Legacy systems were not designed to share data ERP possibilities
– Expensive– Error prone– Maintenance problems if one partner in transaction changes
Internet – Leverage the strengths of HTML
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20/20April 20, 2023
Understanding the “Lingo”… (part Understanding the “Lingo”… (part 1)1)
<soap:Envelope><soap:Header>
<m:language soap:mustUnderstand="0">en</m:language>
<m:currency soap:mustUnderstand="1">USD</m:currency><soap:/Header><soap:Body xmlns:m="http://www.experian.com/">
</soap:Body></soap:Envelope>
SOAP<CreditApproval>
<Name>William P. Wagner</Name><CardNumber>4225….</CardNumber><Expiration>03-2005</Expiration><Issuer>First USA Bank N.A.</Issuer><Amount>500.00</Amount>
</CreditApproval>
XML
XML: Extensible Markup LanguageSOAP: Simple Object Access Protocol
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21/20April 20, 2023
Understanding the “Lingo”… (part Understanding the “Lingo”… (part 2)2) What does Expérian do with this SOAP message?
– WSDL – interprets what needs to be done and generates a SOAP response to the originator
<soap:Envelope><soap:Body> <CreditApprovalResponse>
<CardNumber>4225….</CardNumber><AuthNumber>9416102</AuthNumber><Vendor>Best Buy Inc.</Vendor>
</CreditApprovalResponse><soap:/Body>
<soap:/Envelope>
XML
SOAP SOAPWSDL
WSDL: Web Services Description LanguageUDDI: Universal Description, Discovery and Integration
UDDI
411
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22/20April 20, 2023
For Next Class…For Next Class… Read
− FleetBoston case − Guest speaker Joe Leinhauser from JPMorgan