The adoption of a service-oriented architecture (SOA) approach to business integration using the Java CAPS solution has enabled FirstRand Ltd to transform the way in which payments and messaging have historically been handled.
This centralised focus has enabled it to become a strategic role-player in the market, influencing and setting payments and messaging-related standards locally and internationally.
Business challenges
FirstRand Ltd is one of the largest financial institutions in South Africa, operating in banking and insurance markets. The group employs over 36 000 people and has a retail banking franchise footprint of nearly 700 branches, with around 4 000 ATMs, 1 500 mini ATMs and in excess of 50 000 card acceptance devices. FirstRand Ltd is one of the top 10 listed companies of the Johannesburg Securities Exchange.
FirstRand Bank Ltd identified that it was in need of redesigning its internal processes to meet the demands of operating in a rapidly changing business and legislative environment. To that end, it embarked on a lengthy programme of identifying exactly what products and processes it had in place.
"We had invested in a variety of systems and solutions to support back and front office transaction processing, but this fragmented approach across some 33 systems in FirstRand Treasury alone led to much duplication of effort. Our focus is to streamline messaging and payments and to achieve that we realised that we had to adopt a more holistic approach," said Rob Green, Head of Payments, FirstRand Bank Ltd.
Simplifying the payment process and automation of the entire chain, from initiation to final reconciliation is paramount. This has been the key underlying objective of the project, to be rolled out in well-defined phases. The bank identified that an SOA approach to business integration would be the way forward to allow change to take place incrementally and for a number of functional designs to be reused across the business.
Solution overview
Having re-engineered its workflow, FirstRand Bank Ltd then searched for technology that could support it.
"We selected Java CAPS to underpin our messaging and payment infrastructure as we needed a true service-oriented architecture with a strong middleware component that could encompass services such as message formatting and enrichment, transformation, bulk file handling and proactive SLA management," said Green.
Systems architects responsible for identifying the best technologies to support the new workflows, identified the Sun Java Composite Application Platform Suite (Java CAPS) as the most suitable to the bank's needs. Another factor in the decision-making process was that other parts of the bank had already bought the Sun solution which enabled the achievement of economies of scale not only in terms of licensing but also in the re-use of software across the organisation.
"It is important that the bank operates on a federated model approach," explains Green.
Core functions such as routing, validation, message enrichment, bulk file handling, transformation, OFAC (Office of Foreign Assets Control) filtering, accounting, message formatting, authentication and STP handling are being brought together and offered as services within FirstRand Bank Ltd using state-of-the-art technology and refined business processes. Key to its success is the ability to offer these services in a cost-effective way to enable FirstRand Bank Ltd to respond rapidly to the ever-changing business and legislative environments, customer requirements and industry initiatives.
The introduction of Java CAPS is an ongoing process but the first project to be rolled out using the technology was the ability to offer its customers within a SWIFT MA-CUG (Member Administered Closed User Group), a fully automated payments solution.
By introducing this service bus and utilising the Sun SWIFT solution, FirstRand Bank Ltd is able to offer its customers a flexible payments and messaging solution with full STP (Straight Through Processing). The solution also uses SWIFTNet to facilitate real-time interactive and bulk file handling services (SWIFTNet InterAct and SWIFTNet FileAct).
The benefits
FirstRand Bank's goal is to automate and streamline processing, with a key focus on STP. Since the implementation of the initial solution, STP ratios have surpassed expectations, and continue to do so. By adopting an incremental SOA approach, the bank also found that it could carry on with its business as usual.
"Opportunities for new initiatives and innovations are continually presenting themselves. We cannot ignore these until we have finished this software roll-out, or we would lose them," said Green.
Much of what has been written for the initial solutions can be re-used in future projects, thus delivering quick time to market and enabling the bank to be fleet-footed in response to changing needs. The centralised messaging and payments hub and the use of SOA also allows for faster and easier implementation of industry changes, for example changes to SWIFT standards.
Business benefits:
* Improved STP ratios
* Improved time-to-market
* Economies of scale
Technology profile:
* Sun Java CAPS solution
* Deployed on SunFire V480 boxes running Sun Solaris 9
The future
The MA-CUG project was initially used as a proof of concept, but its success gave momentum to enable FirstRand Bank Ltd to move forward in achieving an integrated service across all bank functions. FirstRand Bank Ltd has successfully used Bytes Technology Group (BTG) as its implementation partner and will continue to do so as it rolls out other projects but its intention is to skill itself up as these skills are sought-after in South Africa.
"We believe that by adopting the Sun Java CAPS solution, we will be re-using technology as effectively as possible and will be positioning ourselves to deliver a messaging and payments environment for the future," said Green.
Learn more about Sun's offerings at http://www.sun.com/soa and to learn more about the Bytes Technology Group's offerings, please visit http://www.btgroup.co.za.
Share