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Electronic Banking. Electronic Banking Electronic Balance and Transaction Reporting (EBR) Usually provided by relationship bank(s) May be used to access.

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Presentation on theme: "Electronic Banking. Electronic Banking Electronic Balance and Transaction Reporting (EBR) Usually provided by relationship bank(s) May be used to access."— Presentation transcript:

1 Electronic Banking

2 Electronic Banking Electronic Balance and Transaction Reporting (EBR) Usually provided by relationship bank(s) May be used to access accounts with single or multiple banks MT940 used for end of day balances - assist reconciliation to provide daily cash position - may provide anticipated cleared balance information Some banks are able to provide intra day reporting via MT942

3 Electronic Banking Electronic Funds Transfer (EFT) Offline batch or Browser based Interface with TMS avoids re-keying Templates - pre defined beneficiaries - sort code, IBANs etc Will allow a wide range of different payment types - primary payment types are MT102 (mass payments) and 103 (single customer credit transfer) - MT101 Multi-bank payments

4 Electronic Banking E-Commerce: Portals and Exchanges Companies may use single bank dealing portal because Independent verification of the rates May be incentive to deal on-line (rate) Small exposures may be hedged automatically if linked to TMS Simplify the audit trail

5 Electronic Banking Multi-bank Portal Co A Co B Co C Hub Bank A Bank B Bank C

6 Electronic Banking Multi-bank Portal Input deal, dates- currencies- amounts Banks to be approached Bid transmitted Banks auto bid direct from their system Dealer has short time to accept Deal accepted and other bids discarded If linked, TMS produces confirmation

7 Electronic Banking Multi-bank Portal Advantages to: Corporate – Well documented competitive quotes – Transparency or price discovery – Can spread business – If well integrated leads to STP

8 Electronic Banking Multi-bank Portal Bank –High volume, low margin business may be done more cost effectively –Greater chance of winning some business –Access to a wider range of customers –Small value, exotics Exchanges A messaging service

9 Electronic Banking Exchanges A messaging service Different types of financial messages Expands services available

10 Electronic Banking E-Commerce: Working Capital Invoicing or einvoicing the substitution of inbound/outbound paper invoices with an electronic file –EBPP, Electronic Bill Presentment and Payment –EIPP, Electronic Invoice P & P –ERS, Evaluated Receipts Settlement –POP, Paid on Production NB in EU directive 2001/115/EC, into effect in 2004, member states must accept einvoices.

11 Electronic Banking E-Commerce: Working Capital Desktop capture Letters of Credit Reconciliation Interest apportionment

12 Electronic Banking E-Commerce: Working Capital Why is Security important? Fraud Theft Contamination Data security Error Non repudiation

13 Electronic Banking Security So how do we attain security and have a system that works? Authorisation for payments/deals Segregation of duties (back office/dealer) Physical security –Dedicated computers for payments –Separate room –Password protected

14 Electronic Banking Security Different levels of authorisation/activity –Input –Second input –Verification –Authorisation and release Free format Pre-format

15 Electronic Banking Security Encryption or cyphertext –Private key or symmetric –Public key or asymmetric (public key infrastructure, PKI) not only ensures confidentiality but also provides authentication of the sender thus preventing repudiation –SSL, Secure Sockets Layer –HTTPS, Hypertext Transfer Protocol, Secure

16 Electronic Banking Security Digital Signature Uses the asymetric method to perform two functions –Authentication –Integrity public key encryption does not identify the sender. Digital signatures fill this gap. Digital certificates

17 Electronic Banking Integration and Standards Extensible Mark-up Language, XML Some standards groups: –Rosettanet –TWIST or Treasury Workstation Integration Standards Team


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