Banks have been in the headlines recently. Most of the news is not what banking institutions and investors want to see. For sure this is a global event that is being felt around the world. Europe has not been exempt with highly esteemed institutions such as UBS recently stating they will take yet another multi billion write-off. More than ever, cost reduction strategies and the implementation of better management is required.
So what is the good news? Payment Systems initiatives such as The Single Euro Payments Area (SEPA) initiative for the European financial infrastructure are an area of great promise for cost reduction and efficiency. According to Wikipedia, A payment system are the procedures and associated computer networks used to settle financial transactions in bond markets, currency markets, and futures, derivatives and options markets, and to transfer funds between financial institutions.
The SEPA project aims to improve the efficiency of cross border payments and turn the fragmented national markets for euro payments into a single domestic one: SEPA will enable customers to make cashless euro payments to anyone located anywhere in the area using only a single bank account and a single set of payment instruments. The project includes the development of common financial instruments, standards, procedures, and infrastructure to enable economies of scale. This should in turn reduce the overall cost to the European economy of moving capital around the region (estimated today as 2%-3% of total GDP).
However, there is a cost of implementation and the expense of payments systems is compounded by global influences that are forcing significant regulatory changes as well as customer demands for easy, quick, and transparent transactions. Implementing an efficient payments system that can manage the integration of various payment services through a common platform, can streamline operations, helping financial institutions to focus on innovation and growth.
Solutions based on service-oriented architecture(SOA), such as the IBM Payments Framework, answer the call for global initiatives such as SEPA. Financial companies, however, also need a way to manage the rich functionality offered by SOA based frameworks. Our Tivoli, industry focused solutions, provides such management in four critical areas: Security Management, Performance and availability monitoring, Service Management, and Risk and Compliance Management. Using Tiovli products as building blocks, we have architected what I like to call the Management Services Bus that can be applied to any payments framework.