Transcription
International and High-valueDomestic PaymentsOn FIS' Open Payment Framework (OPF)
2INTERNATIONAL AND HIGH-VALUE DOMESTIC PAYMENTSChanging IT to Support Business NeedsInternational Payments —A Time for Change?Spotlight on Aging SilosThe international payments line of business has seen itsIT infrastructure gradually mature and age. Often builton architectures and technologies that are now obsolete,these legacy systems have become increasingly costlyto maintain; a slight transformation of existing businessprocesses highlights a host of issues, not the leastof which is cost. Moreover, as many banks launchenterprisewide IT rationalization and centralizationprojects to make use of the latest technologicalinnovations such as Service-Oriented Architecture (SOA),the longevity of the incumbent international paymentsprocessing systems often becomes the focus of attention.A recurring conclusion is that a replacement system thatfits into the long-term strategic IT-planning of the bank,and easily integrates into the banks global IT architectureis needed.Many banks with legacy infrastructures must alsoconsider the challenges that come with large potentialincreases in processing volumes, as opportunities forprocessing third-party bank’s payments multiply. As thevolumes increase, so does the operational expenditure;more manual intervention is needed and hardware andsoftware maintenance costs rise. Furthermore, withmarket pressure forcing prices down in both the retail/wholesale market as well as the bank-to-bank business(institutional correspondent banking), many are nowstruggling to maintain the long-term profitability of thispotentially lucrative business line.A Solution for the CorrespondentBanking ChainInternational payments include foreign currencypayments and domestic, sent to, or received from,outside that currency zone. The International Paymentsplatform from FIS covers the entire correspondentbanking chain.FIS’ International Payments solution is fully multibank and multicurrency, making it an ideal solutionfor deployment within large multi-entity financialinstitutions. The multibank capabilities of the system canalso be leveraged to provide white-label services.Figure 1: xCT – International and Domestic Credit TransfersParser/Formatters(SWIFT MT, MX)Foreign ExchangeChargesBillingPDE/PDM Duplicate CheckAuto-enrichmentCode Word ProcessingY-CopyExceptions and InvestigationsSettlement Day DeterminationPSSM (ACK/NAK Mngt.)Request for TransferOn-US Credit TransfersManual RepairSerial-coverSSI EnrichmentManual EntryVolume and Value ThresholdsBank Check RequestsAccounting Entries
INTERNATIONAL AND HIGH-VALUE DOMESTIC PAYMENTS 3International Payments on Open Payment Framework (OPF) – Key FeaturesMore automation and less intervention means a lower cost per transaction, resulting in higher operational marginsand a more competitive price positioning. FIS’ International Payments solution delivers superior straight-throughprocessing (STP) due to capabilities like: BIC enrichment based on local bank codes and IBAN BIC enrichment based on name, address and other residence information Local bank code enriched from BIC Standard Settlement Instructions (SSI) enrichment: correspondent chain building from SSI information Enrichment of the direct participant from indirect participant Derive BIC from IBAN Remove duplicate banks Autocorrect message formatting issues (identify account info and national ID in unstructured tag content)Figure 2: International PaymentsFIS Multibank Implementation For: Bank Customers/RespondentsUK BanksEU BanksSWIFTFIN FileActBank’sCorrespondentsRetail CustomersSWIFTFIN FileActBank’s ForeignSubsidariesBank’sCorrespondentsRetail CustomersCorporate CustomersCorporate ayments
4INTERNATIONAL AND HIGH-VALUE DOMESTIC PAYMENTSSophisticated Rules-Based RoutingAccommodating SWIFT and MXFIS’ Cost Based Routing service uses highly configurableand fine-grained rules to allow each bank to fine-tunethe system’s automated routing to match its specificrequirements. Payments can be routed "on-us" (withinthe bank or bank-group), routed to Interbank Clearingand Settlement Systems or to Correspondents. Therouting rules criterion can be based on any paymentcharacteristic, including payment type, currency, cut-offtime, correspondent reciprocity agreements, participantdirectories and BIC/location of beneficiary bank.The Open Payment Framework’s parser/submitterprovides support for a wide range of SWIFT messagesincluding MT1x, MT2x, MTn9x and MT9x, augmented bysupport for SWIFT MX (ISO 20022) payment messages.Online configuration allows you to instantly migrate theparticipants (i.e., correspondent banks) from SWIFT MTto the new MX standard. Messages are subsequentlysubmitted according to the configured format.Access to Local Clearing and SettlementInfrastructuresFIS’ International Payments platform offers routing offoreign currency payments to foreign correspondentsand routing to local clearing and settlement systems,for the domestic leg of domestic currency internationalpayments. The appropriate clearing/settlement systemis identified by the Cost Based Routing service, and thesystem formats the output message/file to meet theclearing/settlement system’s requirements.Market infrastructures for high-value paymentsmigration to ISO 20022:Financial market infrastructures for high-value paymentsare being reworked around the world. In less than fiveyears most of the major market infrastructures will havebeen renewed. Market infrastructures in Switzerland,Japan, China and India. The U.S., Europe, the U.K., HongKong and Canada will follow in the coming years.Cross-border payment migration to ISO 20022:SWIFT recently concluded a community consultationto migrate cross-border payments from SWIFT MT toISO 20022. The proposed migration period would startin 2021and will conclude by 2025. The FIS InternationalPayments platform offers out-of-the-box support tomake this migration seamless.Interbank ChargingThe International Payments solution offers full supportfor OUR, BEN and SHA charging-options, with userconfigurable charging rules and amounts. The systemalso features automated generation and reconciliation ofoutbound and inbound advices, respectively.Advanced Currency ConversionA full Forex service underpins any currency conversionrequired during payment processing. Features includerule-based rate retrieval (from the database, externalsystems or manual entry), support for periodicallypublished rates and cross-currency conversions.Automated Cover SettlementWhereas the SWIFT MT standard prevailedearlier, the ISO 20022 standard is now almostexclusively being used to exchange payments.The FIS International Payments platform offersout-of-the-box support to make this migrationseamless.The choice between the serial and the cover settlementmethod is fully automated. International Paymentsalso offers auto-reconciliation upon receipt of paymentmessages along with extensive exception handling.SWIFT GPISWIFT’s global payments innovation (gpi) initiativedelivers enhanced international payments servicesto corporates. This comes in response to changingcustomer expectations where traditional internationalpayment mechanisms are perceived as too slow withunpredictable fees.
INTERNATIONAL AND HIGH-VALUE DOMESTIC PAYMENTS Gpi offers same-day funds availability with fullytransparent fees and FX rates. Transactions are trackedend to end, and remittance information is transferredunaltered. Moreover, gpi allows stopping and recalling apayment wherever it is in the payment chain.FIS’ xCT product, accredited by SWIFT as SWIFT gpiReady Payments Application, supports gpi nativelyand can be used by all banks in the gpi payment chain(debtor, creditor or intermediary agent) with full supportfor the SWIFT gpi tracker and gpi directory. All SWIFT gpimodules (gCCT – gpi Customer Credit Transfer, gCOV –gpi Cover and gSRP – gpi Stop and Recall Payment) aresupported. Moreover, FIS embraces the SWIFT gpi roadmap by extending the product as soon as SWIFT releasesnew gpi modules or updates existing gpi services.Visa B2B ConnectVisa B2B Connect is a platform that Visa developed togive financial institutions a simple, fast and secure wayto process business-to-business payments globally. TheFIS xCT product offers seamless integration with the VisaB2B Connect solution.RippleNetSan Francisco-based company Ripple offers RippleNet,connecting banks, payment providers and corporates.RippleNet uses blockchain-based technology to enablelow-cost real-time messaging and settlement oftransactions with upfront transparency of end-to-endfees and execution time. RippleNet can be accessed viathe on-premise installed Ripple software, called xCurrent.FIS’ integration with Ripple’s blockchain-based solutionis being used at our clients' businesses for makingcross-border remittance payments; the integrationcovers transaction creation, ingestion into the networkand upfront, transparent disclosure of fees and forexrates before the customer confirms the transfer.5Open Payment Framework SupportFIS’ International Payments solution is based on ourOpen Payment Framework (OPF). The OPF is a libraryof component building blocks from which paymentssolutions can be derived. OPF is built entirely on an SOAdelivering common, reusable services consisting of acomprehensive data model, choreographed paymentbusiness processes and configurable services, includingparsing, validation, cost-based routing, warehousingsecurity, auditing and more. From OPF, FIS has createdpredefined solutions around the Bank Payment Hubto process faster payments (NPP, SCT Inst, UK FasterPayments, MYRPP, HK Fast, G3, etc.), high-valuedomestic payments (Fedwire, CHIPS, TARGET2, EBAEURO1/STEP1, CHAPS, etc.), international payments andACH payments (SEPA, NACHA, EFT, BACS, etc.).Move Towards a Centralized PaymentInfrastructureThe International Payments solution can be combinedwith other OPF-based solutions to provide a centralizedpayment processing hub capable of handling a multitudeof different types of payment (including domesticretail, high value/high care, SCT, SDD, Remittance).The implementation of additional modules can beaccomplished at any stage, for a phased migration plan.Learn How You Can Unlock the Potentialof ISO 20022With more than 10 years’ experience running ISO 20022schemes and over 60 clients using the ISO 20022 nativeFIS Open Payment Framework (OPF) platform, FIS is theperfect partner to ensure you meet compliance deadlinesand reap benefits like frictionless straight-throughprocessing and enhanced data capabilities. In 2008our first client went live on the ISO 20022-based SEPAscheme. Today FIS has 25 real-time payments clientsacross 10 different ISO 20022-based schemes. And now,2 years ahead of the official deadline FIS’ OPF is ready forRTGS and correspondent banking with SWIFT MX.Click here or contact us at getinfo@fisglobal.comfor more information.
About FISFIS is a leading provider of technologysolutions for merchants, banks and capitalmarkets firms globally. Our 55,000 people arededicated to advancing the way the world pays,banks and invests by applying our scale, deepexpertise and data-driven insights. We help ourclients use technology in innovative ways tosolve business-critical challenges and deliversuperior experiences for their customers.Headquartered in Jacksonville, Florida, FIS isa Fortune 500 company and is a memberof Standard & Poor’s 500 Index. To learnmore, visit www. fisglobal.com. Follow FIS onFacebook, LinkedIn and Twitter @FISGlobal. 2019 FISFIS and the FIS logo are trademarks or registered trademarks of FIS or its subsidiaries in the U.S. and/or other countries.Other parties’ marks are the property of their respective owners.666434
FIS Open Payment Framework (OPF) platform, FIS is the perfect partner to ensure you meet compliance deadlines and reap benefits like frictionless straight-through processing and enhanced data capabilities. In 2008 our first client went live on the ISO 20022-based SEPA scheme. Today FIS has 25 real-time payments clients
