The leading web resource for financial technology
Sign in to bobsguide SIGN IN | REGISTER
bobsguide.com

WESTPAC ACHIEVES HIGH LEVEL OF STP USING MKI’S MIDAS FUNDS TRANSFER SOLUTION

email this aricle - WESTPAC ACHIEVES HIGH LEVEL OF STP USING MKI’S MIDAS FUNDS TRANSFER SOLUTION - print this article - WESTPAC ACHIEVES HIGH LEVEL OF STP USING MKI’S MIDAS FUNDS TRANSFER SOLUTION -
The regional headquarters of Westpac Institutional Bank based in Wellington, New Zealand has achieved a high degree of straight-through-processing (STP) for incoming and outgoing payments processed through the country’s local RTGS (Real-time Gross Settlement) system using Midas-Kapiti International’s (MKI) Midas Funds Transfer STP application.

Westpac was originally established in 1817 as Bank of New South Wales in Sydney, where its Head Office is today. The bank, which changed its name to Westpac in 1982, is ranked among the top 10 listed companies by market capitalisation on the Australian Stock Exchange and is Australia’s third-largest bank. Westpac is a full-service bank, providing both retail and wholesale banking services throughout the region, with over 1,000 branches in Australia, more than 200 outlets in New Zealand and a further 55 branches serving 9 Pacific Island states. The bank also maintains international branch offices in Bangkok, Beijing, Hong Kong, Jakarta, Singapore, Tokyo, New York and London.

Westpac in New Zealand is a long-standing user of MKI’s Midas DBA banking solution, which was formerly linked to KITS or Kiwi Interbank Transfer System, the country’s RTGS payment switching system. KITS, which was designed to handle high value NZD payments between participating New Zealand settlement banks, was decommissioned in July 2000. KITS has been replaced by a S.W.I.F.T.-based payments message service to handle interbank payments, in addition to providing a link to Westpac’s Exchange settlement account at the Reserve Bank of New Zealand.

Peter Thomas, Westpac’s Head of International Operations in New Zealand, explains, "The bank required an application that could link into the new payment system, as well as providing support for the reformatting and re-direction of customer payment messages. In May 1999, we commissioned EDS to produce a report outlining the different options available to us. Based on the recommendations from EDS, we went on to review three different solutions, one of which was the Midas Funds Transfer STP application."

"We chose Midas Funds Transfer STP as our preferred solution, on the basis that the application’s functionality provided an almost perfect fit with our requirements, and needed minimal in-house customisation," he continues. "In addition, Midas has been a tried and proven product within our organisation, and both the vendor and the system have a strong history of delivering quality service and performance, with a high degree of reliability. Furthermore, the selection of Midas continued our internal strategy to minimise the number of different vendor products utilised, and where possible, to consolidate processing onto a single platform."

In November 1999, Westpac signed the contract for the Midas Funds Transfer STP solution, which went live in July 2000, the first site to do so with the then new software. Just two days after the system became fully operational the bank was recording previously unprecedented levels of straight-through-processing (STP), with over 74% of outgoing payments and more than 70% of incoming payments being processed without manual intervention.

The Midas Funds Transfer STP application includes an auto-authorisation feature, enabling the bank to automatically process and forward payments to the relevant beneficiary. Incoming MT200, 202 and 203 messages from vostro account holders are handled as incoming payments and credited to the appropriate accounts if these are held at Westpac, or converted for onward transmission as outgoing payments where the beneficiary account is held at another bank. In this instance, the Midas Funds Transfer system generates an MT202 message for transmission to the receiving bank, as well as to the New Zealand Reserve Bank for settlement to be effected. The system also handles incoming MT202 payment messages automatically, with more than NZD8 billion in payments being processed on a daily basis.

Peter Thomas comments, "The Midas Funds Transfer STP solution has provided the bank with a user-friendly S.W.I.F.T.-compatible application, which has enabled us to make the transition to one of the country’s key payment switching systems successfully. We are now achieving STP of rates of 85% or higher, and are currently investigating the possibility of using the system to process the bank’s commercial payments as well."

He concludes by saying, "We are in the process of linking Westpac’s in-house developed ONLINE FX internet dealing system with Midas Funds Transfer STP, which will allow straight-through-processing of all payment instructions received from clients. MKI’s Meridian Middleware is being used to integrate the ONLINE FX and Midas Funds Transfer STP systems, which we plan to use to process both retail and wholesale payments, as well as commercial payments in the future. This means that MT100, MT101, MT102 and MT103 payment messages will eventually be directed through the Midas Funds Transfer STP application as well."

Comments (0)

No one has commented on this yet. Be the first!
Add your comment - Max 1000 characters used

More from this company