IBM's middleware recognises ISO 20022 messages and then manages the payments process by directing them to the appropriate payments modules, which plug into the SOA. John Mesberg, a vice-president in IBM's financial services software group, said rather than using the ISO 20022 data as the message model between two correspondent banks, the ISO 20022 data dictionary was built into the integration platform itself, which then flexibly manages the payments process.
"The historical way to manage payments was to buy a monolithic application or write bespoke code," said Mesberg. This often led to a series of silos of different payment systems emerging. IBM's new approach is to let the middleware recognise the payments data, and then direct it to the most appropriate payments module plugged into the SOA.
IBM claims this approach allows more flexibility and update granularity â so, for example, if there are regulatory changes required for a particular payments process these can be tackled module by module, while leaving the back end systems unscathed.
"The world is evolving to where services are far more componentised," said Mesberg, adding that IBM was working with a range of business partners that were selling "very discrete functionality" on top of the SOA, allowing users to pick modules best suited to their needs.
Wachovia, the first user of the Enterprise Payments Platform, has been using it for about four months. Mesberg said the US bank had overhauled its infrastructure as a result and cut back on the numbers of redundant services it was previously supporting.
While refusing to be drawn on future plans, Mesberg confirmed: "There is a lot more we can do with this platform. We do not currently touch securities clearance, nor card and cheque processing. But there is no reason that we could not apply this same treatment."
A year after it began the first phase of its payments strategy, Sun Microsystems has entered phase two with the launch of the Open Payment Suite based on the Java Composite Application Platform and Solaris OS.
Sun has integrated its Consolidated Payments Architecture and Open Payments Bus to create a business integration and SOA platform based on open standards. The suite includes the Swift Message Monitor, which enables financial firms to automatically audit Swift traffic to ensure delivery and decrease operational risk.
Larry Scott, VP of global financial services industry at Sun, said the company was aiming to solve the problem facing 60 per cent of its financial services clients â multiple back ends. "Ultimately they want to migrate off their inflexible legacy systems; not directly but they need to change and lower the cost of payments. They also need to be able to view across at customer level, as well as across all product lines. So they need to re-architect their systems, but can't go for a big bang approach. The Open Payments Suite leaves the legacy investment in place, while refactoring the system as a business process."
Voca, a UK-based payments processor, went live with its new payments platform in July 2006. Marion King, Voca's chief executive, said: "With our new platform we expect to be able to process 12,000 payments per second. In fact, in four hours we can process Europe's entire average daily automated payments volume. Sun is a key partner whose consolidated payments architecture enables us to provide an end-to-end seamless service to our clients." Other payments customers include Norwegian bank BBS and Belgiumbased KBC.
The first phase for Sun included building the core technology and architectural principle. The second phase is about software architecture and monitoring. Scott said the next logical step would be to create tighter integration for partners' technology in the back end, but that Sun was not interested in building a payments engine. "We don't step in front of our clients. We want to build composite applications, but we won't get into the payments application business for that is where our partners are. We won't build a payments engine, just the architecture and then map our partners on to it."