IBM Corp. on Tuesday announced a suite of middleware products aimed at helping the world’s largest banks speed up their transition to SwiftNet as well as to make trusted electronic payments more secure.
The new Websphere Financial Network Integrator is designed to serve as a platform offering an “integration” base to support communications channels as well as common infrastructure services including message warehousing, security, and communication channel administration.
The new suite is also intended to link banks’ existing financial network integration technologies to business integration technologies, including some of IBM’s middleware products such as WebSphere, MQSeries Integrator, DB2, and CrossWorlds.
“One of the problem we are trying to solve with this is to give financial institutions a means to migrate from an X.25-based implementation to an IP-based implementation and to use our field-proven middleware products as underpinnings for that,” said Melanie Rose, director, of solutions technologies development for IBM software group in Somers, N.Y.
The other issue IBM is trying to address with this offering, according to Rose, is to help financial institutions take better advantage of the Identrus standard that enables buyers, sellers, and their respective banks to conduct e-business transactions in a secure way.
“The intent here is to pull together the four [middleware products] to exploit every bit of capability they have, and then on top of that to provide a thin layer of services needed for any financial services hub to do high-quality transaction processing,” Rose said.
That thin layer of services would consist of functions such as duplicate message detection, support for PKI (public key infrastructure), various auditing capabilities, and an administration console, Rose added.
The integrated solution also works with IBM’s Merva software, which is IBM’s mechanism for handling Swift messaging, making the transition to the SwiftNet technology smoother, company officials said. It also supports IBM’s Trusted e-Payments Initiation solution, which is based around Identrus.
“[IBM is] essentially migrating to support Swift’s movement from X.25 to Internet-based technologies. If IBM does not replace the current Merva interface to X.25, financial institutions would have to build it themselves or get it from a vendor who has interfaces that deal directly with the network,” said Robert Landry, vice president of research for The Tower Group, in Needham, Mass.
“If institutions got their own they might move away from IBM to platforms offered by other vendors,” Landry said.
Established by Swift, the world’s largest financial messaging services provider, SwiftNet is a network that facilitates the after-hours clearing of payments among all banks.
“Every night banks shut down to process and settle payments made among each other. So if a bank misses, say, its two-hour window to do that, the losses in terms of value, time, and money can be measured in the millions. It is mission-critical work that goes on every night,” Rose said.
All major banks must migrate over to the IP-based version of SwiftNet by the first half of 2005, which does not give major banks a lot of time to accomplish the transition, according to Rose. The benefit, however, is that it reduces total cost of ownership to banks as well as allows them to roll out other clearing services based on the latest XML standards as adopted by Swift.
“Our 7,000 global customers will need a smooth transition to the new SwiftNet service,” said Luc VanBergen, the Swift project manager for SwiftNet migration. “Processing Swift messages will be essential to financial institutions, so at no time can they allow any outage, not even during the migration phase,” he said.