XMLdation seminar Milan 21st may 2014

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© XMLdation 2014 Milan Breakfast Seminar 21st May 2014 Juha Keski-Nisula, CEO e:[email protected] t: +358 400 791 955

Transcript of XMLdation seminar Milan 21st may 2014

Page 1: XMLdation seminar Milan 21st may 2014

© XMLdation 2014

Milan Breakfast Seminar 21st May 2014 Juha Keski-Nisula, CEO e:[email protected] t: +358 400 791 955

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© XMLdation 2014

XMLdation Company

• XMLdation Oy

• Finnish company, established in September, 2009 – Offices in: Helsinki and Tampere

– Representation in Brussels

• Mission: We support XML migration process and STP development especially in corporate-to-bank and bank-to-corporate communication

Bank customers in 10 countries

Users of the XMLdation Service in more than 45 countries

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© XMLdation 2014

XML Technology Market Revolution 2012 - 2020

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© XMLdation 2014

Payment Validation Account Report Simulation

XMLdation Service for ISV/Corporates

Instant response of validation No need for real bank accounts Same testing process and testing tool

with multiple countries/banks

Bank specific implementation Cost savings in bank customer service Enables self service by corporate customers Helps error tracking and correction

XMLdation Service for Banks

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© XMLdation 2014

End-to-End Integration Testing

Outgoing Payments

1. Test &Validate

• Structure & Content

• External code list

Incoming Reports

2. Simulation processes

• Account Statements

• Payment Status reports

• With R-Messages

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© XMLdation 2014

Customers and Partners

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© XMLdation 2014

Integration testing • API interface

• To Service • Extrenal Databases

• Big File Testing

Automated Documentation • Rule Documentation • MIG Generation • Example Files • Version Management

Payment Process Simulation • Mapping • Visualization of E2E

Process • Direct Debit Process

Developer Interface • Reusable Libaries • Business Rules (XSD)

Management • Automatic Correction

Looking beyond SEPA

On-Premises setup • API + JAR • JAR • Customer Database • (Full Service)

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© XMLdation 2014

DEMO

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Q&A ?

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© XMLdation 2014

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Challenges in managing XML Payments Standards

Paola BaldizzoneVP Senior Product ManagerGTB Payments Development

Milano, 21 maggio 2014

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Once upon a time there was XML

Is XML a real standard?

UniCredit approach to harmonization of the standards

Conclusions

Agenda

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To cut a long story short

XML (eXtensible Mark-up Language) is a syntax to encode documents ormessages:■ created in the 90s by the W3C (World Wide Web Consortium)■ metalanguage used to create new languages, adding new tags as needed

■ main tool to publish web pages■ tool that allows to define the structure of documents and data formats, to

exchange information between different systems, in different organizations,which use different software

Nowadays the Internet is the most widespread net in the world, with lowcommunication costs, so XML, which is open, general, independent fromplatforms and programming languages, is becoming the principle technology toexchange data between organizations and companies.

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The great thing about standards is that there are so many tochoose from

But the medal has a reverse side: the fact of being potentially universal implies that,in certain environments and in certain contexts, some standardization is needed,otherwise the business cannot be run.

In the world of financial services, there are many standards:

■ Proprietary Domestic Standards■ EDIFACT■ Swift Standards (MT messages)■ XML Standards■ others?

How can an automated, worldwide, end-to-end chain be set up?

XML ISO 20022 was designed to help the financial industry to create messagestandards covering their business processes:■ a method to develop structured financial messages■ a way to unify the existing standards

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ISO 20022

In the financial industry the standard has been set up by ISO, with the creationof ISO 20022 XML: the aim is to allow financial institutions to exchangemassive information between themselves and their clients, using the samemessages structure and interpreting the data in the same way.

Messaging standards provide the definitions of the formats and informationgiven:

■ fields lenght■ character set■ codes■ structure of the fields■ etc

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ISO 20022 Repository

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Agenda

Once upon a time there was XML

Is XML a real standard?

UniCredit approach to harmonization of the standards

Conclusions

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Payments: the Tower of Babel

Messages cover the end-to-end payments chain:■ customer to bank (pain msgs)■ bank to bank (pacs msgs)■ bank to customer (reporting) (camt msgs)

But if SEPA adopted ISO 20022 as a standard, not all the worldwide payment systemsalready did:■ RTGS■ low value domestic systems■ corresponded banking

will these systems migrate to ISO 20022?MT103, MT202, MT950, MT940 areembedded in the legacy systems of financial institutions

■ maintenance of two systems to manage both kind of messages■ translate the new formats in the old ones, in order to keep the legacies work,

instead of changing the applications

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The SEPA Data Model

Fonte: www.sepa.abi.it9

tre

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Fonte: SEPA Credit Transfer Implementation Guidelines e www.iso20022.org

The Rulebook provides a detailed description of the messagesrelated to SCT schema….

Dataset (DS) and corresponding ISO XML messages

Bank to Bank AreaCustomer to Bank Area

DS-01 Customer to bank credittransfer information

DS-02 The Inter-Bank paymentdataset

DS-03 Reject or return credit transfer dataset

DS-04 The Bank to customer credittransfer information

DS-05 The recall of a credittransfer dataset

DS-06 Answer to a recall of credittransfer dataset

ISO messages

Pain.001.001.nn

Pacs.008.001.nn

Pain.002.001.nn

Camt.056.001.nn

Pacs.004.001.nnCamt.029.001.nn

Pacs.002.001.nnPacs.004.001.nn

Camt.052.001.nnCamt.053.001.nnCamt.086.001.nn

(MT942)(MT940)

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… and to SDD schema

Tratta InterbancariaTratta Cliente-Banca

DS-03 Customer to bank Collection

DS-04 The inter-bank Collection

DS-05 Direct Debit Rejection,Return or Refund of a Collection ora Reversal

DS-06 Bank to customer DirectDebit Information

DS-07 The inter-bank Reversal fora Collection by the Creditor

Messaggi ISO

Pain.008.001.nn

Pacs.003.001.nn

Pain.002.001.nn

Pacs.007.001.nn

Pacs.002.001.nnPacs.004.001.nnPacs.007.001.nnCamt.056.001.nn

Camt.052.001.nnCamt.053.001.nn

(MT942)(MT940)

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Bank to Bank AreaCustomer to Bank Area ISO messages

Dataset (DS) and corresponding ISO XML messages

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Is ISO 20022 the real "lingua franca"?

In SEPA environment there is a number of "standards"

■ ISO 20022: the mother of all standards■ ISO 20022 EPC: the SEPA data formats specified by EPC to manage SCTs

and SDDs, accordingly to the rules decreed by the Rulebooks, and detailedin the Implementation Guidelines

■ ISO 20022 domestic (e.g. XML CBI): the "dialect" spoken in the differentcountries

■ ISO 20022 CGI: the global data format that covers all payments in the C2Barea, all transaction banks, and all payment systems

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Harmonization or fragmentation?

The EPC guidelines on the use of SEPA data formats are:■ not mandatory, only recommended, in the C2B area■ binding, in the PSP's area (when PSP's are direct participants to the SCT/SDD

schemes):■ "yellow" fields■ "white" fields

The implementation guidelines maintain a degree of interpretation, thereforethere are various specifications of the standard, which make its application slightlydifferent in different countries, in order to support local needs and to maintain localpractices:■ some info added in the group header (e.g. Spain)■ some product different from SCT inserted in the format (e.g cheques in Spain)■ some optional field in the EPC RB made mandatory in the local implementation

rule■ local XML formats in the C2B area have been released, to accomplish existing

domestic business needs (e.g. CBI, Stuzza, Febelbin standards…)■ use of ISO codes not in the expected meaning (e.g. SALA in Portugal)■ use of tags not in the designed way (e.g. URGP in Germany)

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Customer needs

This multilanguage environment is adequate for the business of local bankswith retail/small business/corporate customers.But multinational corporates need a higher rate of standardization to properlyrun their business.

■ centralize the payments initiation/processing in one country and send themabroad

■ use of XML format to be executed in the different countries as internationalor SEPA or domestic payments

■ local needs and local practices to be satisfied■ use of XML to receive confirmations (pain.002) and reporting (camt.053-

camt.054-camt.086)■ bulk booking vs single booking

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CGI Initiative

The scope of the initiative is to set up implementation guidelines which allowcorporates to send all their payments around the world and to receive the reporting.This means removing the requirements generated by local business rules, whosecomplexity has to be handled by banks, with the selection of the relevant/necessaryinfo to be forwarded to the various Clearing Houses for the execution of the payment.

So if EPC implementation guidelines give a set of business rule that, if followed, areharmonized, the CGI only gives a framework which allows everything, becauseeliminates every requirement

■ only in SEPA countries XML GCI can replace both the domestic and theinternational formats

■ customers are interested in initiating specific products■ CGI is interested in common rules, while local practices, rules and laws are not

forbidden, but also not taken into consideration:■ bulk booking flag■ INTC■ SALA■ URGP■ TAXS

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An example: booking

The total amount of a bulk (sum of all transactions) is booked as one booking item Details in camt.054 or in pain.002 Advantage: saves postings on account and account statement; reduces fees Disadvantage: makes reconciliation more difficult

Bulk-Booking

Each transaction of the bulk is booked on the account Details in account statement (camt.053) Advantage: helps reconciliation Disadvantage : produces long account statements and, in case, fees

SingleBooking

The total amount of a bulk is booked Rejected transactions (r-messages) are booked in reverse (pain.002-report) Advantage: transparency of transactions processed and rejected in the statement Disadvantage: increases postings on account and account statement; in case, fees

GrossBooking

Only the correctly processed transactions are booked Rejected transactions (r-messages) are not booked, reducing the amount (pain.002

report) Advantage: allows customer to know rejects (unpaid) before settlement; saves

postings on account and account statement; reduces fees Disadvantage: makes reconciliation more difficult

NetBooking

Similar incoming transactions are bundled together and booked in one amount Details in camt.054 Advantage: saves postings on account and account statement; the statement

gathers groups of similar kind of payments Disadvantage: makes reconciliation more difficult

Bulking

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Only what is already harmonized can be harmonized?

■ Different treatments in different Countries■ Different treatments in different banks■ Different treatments in the same bank in different Countries

Necessity to take the picture of the status in the different Countries in order tounderstand what works and how: the UniCredit General Country Characteristicsinternal document has the scope to share information in order to have anharmonized approach to the payments management as a Group:

■ products■ scheme of the products■ management of conditions■ service levels

The goal is to build Group implementation rules based on CGI

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Once upon a time there was XML

Is XML a real standard?

UniCredit approach to harmonization of the standards

Conclusions

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Agenda

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Uniweb

Using our Electronic Banking the client can:

■ Continue using the old CBI formats the converters allow the client touse the old CBI to generate flows in the SEPA XML CBI format

■ Use the new CBI XML formats the new CBI XML can be used immediately

■ Use previous CBI XML versions converters are available from the previousversion of the CBI XML to the current (post RB changes)

■ Use the international ISO formats without local characterizations convertersare available from the most widely used ISO formats, also with regard to theconfirmations

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EuropeanGate

20

Eu

rop

ea

nG

ate

ISO XMLV.2ISO XML V.3 CGI

Metaformats

Country formats

EPC IT CBI XmLSEPA

PL PLI

Country formats

DE DTAZV

HU HUA

RSSRD

AT SEPA

DE SEPA

RUXML

TR MT101

Prop.XML

camt.

Pain.002

camt.

Pain.002

Pain.002PPP

IT CBI XmL

SWIFT FILEACT

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Once upon a time there was XML

Is XML a real standard?

UniCredit approach to harmonization of the standards

Conclusions

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Agenda

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Harmonization is a challenge

■Country characteristics: special local Country rules/formats (e.g. tax payments)have to be "translated" into the input format and described in a standardized andcomprehensible way for customer and sales

■Input vs. Output format: the technical knowledge of Input (e.g. CGI) and Outputformats (local legacies) has to be aligned

■Priorities: customer and product management needs in the different Country leadto different prioritizations

Being a global, proactive and innovative bank, UniCredit accepted the challenge, tobe the partner that customers have come to expect, having themselves to deal withthe challenges of the global context.

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Lessons learned from SEPA XML Migration: Challenges, Evolution and Benefits

Testing and simulating SEPA Direct Debit Payment Process

Vee H. KHONG

Milan, 21-05-2014

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Topics to cover

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1. Basics

a. SDD, XML & rules in context

2. Characteristics & complexity of a. SDD

b. Returning flow

3. Approaches used in testing:

a. SDD

b. Returning flow

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Positioning SEPA e XML

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Flat files & XML

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0000031071320005 XMLdation Belgium GEBABEBB .

12000BE13210000047239 EUR0000000001000000310713XMLdati.

....

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The equivalent in XML

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Schema, that declares the elements

An “instance” of the schema; an XML file.

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Rulebook: why do we use rules?

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A_Phrase

Subject

Verb

Preposition

C. object

(1) Schema,

example of a phrase

Rule: Conjugation

Rule: andare in (+ paese) andare a (+ città)

Phrase-1

Io

andare

a

paese

(2) A valid XML instance based on the schema

Phrase-1’

Io

vado

in

paese

(3) Correct instance with

usage rules (grammar)

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An overview

• 2 channels: (1) Instruction (2) Report

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Instructions

Reports

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How good are your SDD instructions?

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• Have you addressed all its complexity?

• Are the messages compliant to the usage rules?

• How much time to you spend on error corrections?

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SDD is more complex than SCT

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SCT Fine

SDD

1-off SDD

RECUR. SDD FRST LAST RCUR

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Let us look now at the Returning Flow

• Tessting of this path depends on your counterparty.

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Instructions

Reports

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Flow of events in SDD presentment: OK and KO

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SDD instruction (pain.008)

Instruction (pacs.003)

B2B Reject (pacs.002) Refund

B2B Return (pacs.004)

OK, o Reject estratto camt.053 estratto camt.054 rapporto pain.002

Bank -Enterprise Customer Interbank

Instruction (pacs.003)

Corporate Creditor

bank Debtor bank Debtor

B2B Return (pacs.004)

! ! ! ! ! ✔

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STR – “Straight Through

Reconciliation”

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Source: Gtnews.com article 6 Feb 2014 “Emerging Trends in Straight-Through Reconciliation”

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STR, first of all understand the info in the report

• Your reconciliation program must first “understand” the contents of the reports in order to match the entries.

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Instructions Reports

Accounting Repairs Exception handling . . . End

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Phase 2:

Future: Both flows

will be in XML

We will have 2 transition phases

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Instructions (in XML)

Report (in Records Fissi)

Phase 1:

Today: Only 1 part in

XML

Instructions (in XML)

Reports (in XML)

Tim

e

We’re now

here!

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Preparation: obtain test data

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Instructions

Test reports

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STR: it needs meaningful and reliable

data • Test data is paramont in successful testing

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Reconciliation

engine

Today XML ⬌ Flat XML ⬌ XML

Reports (Flat file)

Report (XML)

Test data generator

SDD

Phase 1 Transition

Phase 2 Transition

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A challenge in SDD testing

SIMPLICITY versus EFFECTIVENESS

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The traditional approach is: to clone the production system

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Message Input Terminal

(Production)

Database

(production) Database

(Test)

Message Input Terminal

(Test)

Message

Processing

Unit =

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Cloning – strengths & weaknesses

Strengths • Mimic the

production

• E2E (maybe)

• Test also the infrastrutture

Weaknesses • Complex

Costly

• E2E calls for the time and resources of a counterparty

• More points of failure

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Message Input Terminal

(Production)

Database

(production) Database

(Test)

Message Input Terminal

(Test)

Message

Processing

Unit

(Production)

Message

Processing

Unit

(Test)

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To recapitulate

• XML schemas do not cover the SEPA usage rules

• In SDD testing, beware of the different states

• In migration be mindful of the returning flows

• A high STR implies significant saving

• System cloning for testing is heavy and costly.

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Questions?

Thank you. And...

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