October 19, 2004

In the attempt to provide real-time information and payments processing, banks are examining if legacy systems are standing in the way of allowing these transactions to become real-time.

In a recent session at the Sibos conference in Atlanta, bankers discussed the interruption of legacy systems and conferred about what technologies in the market, such as SWIFTnet, are offering.

Some of the drivers that banks are pushing to help banks realize real-time processing are more important now than previously, and some of those drivers include the fact that settlement days have been extended, said Richard Pattinson, senior director, settlement strategy and systemic risk, Barclays Bank Plc. (London), who moderated the session.

Also, real-time processing provides banks the ability to manage credit risks and also manage newer regulation demands, such as Sarbanes-Oxley and Basel II. The challenge with real-time processing is how to access these transactions and deliver it efficiently, according to Ian Toone, vice president, global financial institutions, Royal Bank of Canada (RBC, Toronto).

Toone says that the three main areas of focus for real-time processing for RBC are: accuracy, timeliness and responsiveness. While bank customers want better liquidity, the bank is concerned with investigation and reconciliation of payments in a real-time transaction.

With the collaboration of technologies from SWIFT, Cable and Wireless, and Fundtech, Mizuho Corporate Bank Ltd. is currently developing a method to provide account data in real time, according to Frank Harris, head of correspondent banking, clearing & settlement business, Mizuho.

The use of this technology, which the bank went live with in July, has allowed Mizuho to provide real-time data. The installation of SWIFTnet did not require major IT effort, according to Harris.

With technologies like SWIFTnet messaging available with the collaboration of C&W and Fundtech, banks should not be intimidated by the information that is stored on legacy systems and should indeed make progress in processing, storing and transmitting data, according to Till Guldimann, vice chairman, SunGard.

Guldimann warned attendees of the session, "Don't get distracted by information simply because it's there."

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