Carol Palmer, Principal Product Manager, Oracle Corporation

Transcription

1 USING ORACLE INTERMEDIA IN RETAIL BANKING PAYMENT SYSTEMS Carol Palmer, Principal Product Manager, Oracle Corporation INTRODUCTION Payment systems deployed by retail banks today include traditional paper checks, wire transfers, remittance and lock boxes, credit cards, and Automated Clearing House Network (ACH). These payment systems are typically organized into separate information silos, creating redundancy in applications and systems. Recent legislation and a consumer shift from paper checks to electronic payment mechanisms, such as debit and credit card transactions, is changing how banks process payments. While paper checks represent the largest form of payments today, studies have shown that the annual volume of written check processing is declining by approximately 2% to 4% annually. At the same time, the average value of each check has dropped, where higher value payments are shifting from checks to electronic payment mechanisms. Transaction (000's) 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5, Year Transaction Forecast Source: Financial Insights 2004 US Check Volume Top 10 Check Volume ACH Transactions Debit Card Transactions A major catalyst for the shift to a more electronic payment system is the federal Check 21 legislation, or Check Clearing in the Twenty-First Century Act. This legislation, effective in October of 2004, is a result of the catastrophic events of September 11, 2001, when the major banks in New York City were not able to clear or settle paper checks. The federal government came to the realization that the US check payment system is inefficient. Historically, banks rely on physical transportation, such as planes and trucks, to deliver checks between banks for payment. Check 21 fosters an electronic check collection system for the country by allowing paper checks to be truncated, or removed from the check collection process, and replaced with electronic image files. Image files can be electronically transmitted from one bank to another and cleared through the 1

2 check-clearing network, reducing the banking system s dependence on physical transportation that is subject to uncontrollable delays, such as weather or natural disasters. To facilitate check truncation, Check 21 authorizes banks to create a paper reproduction, the substitute check or image replacement document (IRD), of the original check from the image file. The substitute check becomes the legal equivalent of the original paper check, giving banks the option to use substitute checks in the collection process. By image-enabling paper checks, banks reduce their paper check production, handling, and transportation costs, improving their bottom line. Front of a substitute check, averaging 30KB in size. Back of a substitute check, averaging 30KB in size. This paper focuses on check imaging payment systems today and illustrates why storing and managing check images in Oracle Database 10g with Oracle intermedia as part of a bank s overall payment strategy is simpler and more cost effective than the redundant file systems that are currently in place. A recent benchmark by Synoran, an Oracle partner in the financial services industry, validates the performance of Oracle Database 10g with intermedia in a real-world check payment system environment. 2

3 RETAIL BANKING PAYMENT SYSTEMS TODAY The payment systems that banks have deployed over the years are very fragmented and redundant. Typically, a bank has multiple payment systems (check, credit card, ACH, wire transfer, etc.), each with its own applications and infrastructure. Multiple vendors make up the different pieces of these payment systems. Check 21 legislation has been the impetus for financial institutions to view payments as a business by understanding the shift in consumer demands and costs associated across payment types. Financial institutions are looking to electronic imaging technology to help tie together all of these disparate payment systems, starting with check payment systems. By image-enabling their check payment systems, banks will see the benefits from their investment in this technology. They will no longer have the transportation, handling, and mailing costs associated with paper checks. Fraud is detected earlier, and new applications can be implemented that protect against losses due to bad checks. Banks have been imaging checks in their back office operations for many years. The items are captured and stored in a short-term data store, typically flat files, until the items are cleared and settled, at which time the images are transferred to an image archive. In certain situations, research and adjustments could require check images and data to be moved multiple times from system to system and finally to an archive. It can take up to 15 touch points to clear a good check and up to 25 to clear a bad check, resulting in a very complex and expensive check processing model. In addition, check images need to be presented in a format that provides sufficient resolution to the customer whether they are viewing them on their home computer, ATM, or printing at home for review. In the next few years, savvy financial institutions, looking to improve their bottom line, will reengineer their payment systems and invest in enterprise databases, utilizing imaging as a base technology. They will move from heterogeneous and fragmented payment systems to a consolidated enterprise payment system. The end goal of an enterprise payment system is to have a single instance of payment information, whether it is a check or wire transfer or credit card that will use the same database of payment information, enabling a straight through process. SHORTCOMINGS OF STORING CHECK IMAGES IN FILE SYSTEMS Banks have traditionally stored their check images in file system based media specialty servers, with the corresponding metadata in relational databases. This approach results in data isolation and high systems administration and management costs. It also leads to availability and scalability problems, high training costs, and complex support problems. There are many risks associated with storing check images in file systems. These include: Security compromise: With physical check and check images as the only source of legal representation of a check, security is of the utmost importance. Inconsistent authentication across servers may results in accidental or intentional file deletion/overwrites. Manageability problems: When images are stored in files and metadata is stored in a database, it is possible for the images and their corresponding metadata to become out of sync, making them very difficult to keep track of. 3

4 Limited availability and performance: File systems do not meet the demands of a 24 X 7 environment. With file systems, there is a need to manually load balance and the inability to do online incremental backups. Complex backup process: It is more difficult and time consuming to backup a combined database / file system solution, as two different backup procedures must be followed. BENEFITS OF STORING CHECK IMAGES IN DATABASES Storing check images in a single database provides many advantages over file system storage. Storage costs are lower than using proprietary hierarchical storage management systems. It is easier to manage image data that is stored with other traditional types of data. Training costs are reduced as developers only have to learn about programming in the database and users only have to learn about database operations. Other benefits of storing check images in a database: Secure and synchronized data: Check images and their associated metadata are kept synchronized and secure. Easier search: By parsing out the metadata embedded in the check image data and using it for indexes, it is easier to find the image being searched for. Development and operational savings: Database management of check images results in application deployment and system operational savings, which can be passed on as customer savings. Easier backup: Overall backup operations require less total system and administrative resources than with hybrid database/file architectures. Presentment of check images to a variety of channels: internet or home banking, research, call center, etc. WHY USE ORACLE DATABASE 10G WITH INTERMEDIA? Oracle 10g intermedia is a platform that has been designed to manage multimedia content images, audio, video as naturally as all other business information. It has also been designed to lower the cost and complexity of developing, deploying and managing business applications, which make extensive use of multimedia data. Oracle intermedia is part of the core database offering. Through the use of media datatypes, Oracle intermedia enables Oracle 10g to manage and deliver image, audio, and video data in an integrated fashion with other enterprise information. The media datatype for managing images, ORDImage, stores the image data as well as basic attributes about the image such as height, width, length, mime type, file format, and compression. From a programmer s point of view, a column of the ORDImage type would be created instead of a Binary Large Object (BLOB) column. 4

5 intermedia provides the means to add media columns to existing database tables, insert and retrieve multimedia data, and deliver it to applications, development, and web authoring tools and servers. intermedia is integrated with Oracle JDeveloper and Oracle Portal enabling easy multimedia application development. intermedia makes it possible to store media in the database under transaction control. Oracle handles all image content under full database transactional control, enabling zero image loss. DATABASE PERFORMANCE WITH IMAGES IN ORACLE 10G: Insertion and loading of images into the database: With proper database configuration, images of the size of check images inserted as part of a real time processing workload have minimal impact above that of loading and inserting the associated non-image content. (See Synoran Benchmark below.) Image retrieval: Image retrieval of data stored in the database requires no more database resources than executing the retrieval of file-based images. There is no need to scan each image in order to find a given image. Because Oracle can go directly to a given image, the quantity of images loaded in the database does not affect the access time of the image or any other database content. In addition, it is possible to cache frequently accessed images, thus improving time for retrieval. Index creation: Storage of images has no impact on index creation performance nor does it change the impact that index creation will have on production system performance. INTERMEDIA IMAGE PROCESSING CAPABILITIES Compression: Support for the most popular and efficient compression schemes, including CCITT G3/G4 run length and ISO/CCITT JPEG encoding scheme. Users can request that images be compressed or decompressed on demand. Contrast: Contrast of the image can be adjusted. Crop and Scale: Efficient and flexible thumbnail generation capability. Flip: An image s scanlines can be swapped from top to bottom. Format conversion: Support for the most popular desk top publishing and web media formats, including GIF, TIFF, JPEG, PNG and BMP. Users can convert formats on demand. Mirror: An image s scanlines can be placed in reverse order. Rotate: An image can be rotated an arbitrary amount to deskew it. REAL WORLD PERFORMANCE AND USAGE SYNORAN BENCHMARK Synoran, a software and services firm that offers Web service technology to deliver payment information across the enterprise, is already taking advantage of the capabilities of Oracle 10g with intermedia. The Synoran payment suite provides highly scalable check image processing in a real-time straight through processing environment. ep2 A payment and image capture solution, enabling truncation of check-based transactions and related items at the point of presentment. EP2 delivers payment 5

6 transaction and image information to one or more destinations for completion of the payment lifecycle. epx A straight through payments exchange solution that performs intelligent clearing, routing, and exchange of payments. EPX collects all transactions, items, and related images in a centralized location from which routing and clearing decisions are made based on the configurable business rules. PMC A web-based enterprise payments hub that consolidates payment information across all systems and capture points into a centralized all items file, representing all payment types. By combining payment information from all sources, PMC brings significant efficiencies to an organization. PMC tracks and updates payments through their processing lifecycle and aggregates both intra and inter-day activity for tactical and strategic management decisionmaking. The Synoran products described above all use a similar approach to storing check images. Prior experience with developing and benchmarking these applications showed that storing images in the Oracle 10g Database as simple BLOBs exceeded the performance of commodity file system storage by a large margin. In addition, file system storage lead to a rather complex software architecture that was greatly simplified by being able to use the Oracle 10g Database as the single datastore for all application data, including image data. Benchmark results from a previous test proved that Synoran applications using Oracle 10g could perform on commodity Lintel hardware at rates sufficient to handle check processing for the top five largest banks in the United States. For the platform configuration of the benchmark the database nodes consisted of two 8-way 1.5 GHz Itanium partitions of an HP Superdome system. Each node partition was configured with 32 GB of RAM. Each partition had RedHat EAS 3 and Oracle Database 10g for Itanium installed. The two Oracle database instances were configured in a RAC configuration, connected to an HP StorageWorks drive array with two Fibre Channel connections each. The StorageWorks array contained K RPM 72GB drives. The database nodes were connected to each other with a one gigabit Ethernet connection for private cluster node communications. Each node was also connected to the public network by two gigabit Ethernet through connections running to a switch that also connected the application servers. The application server node hardware consisted of two 8-way 2.8 GHz Xeon servers (one HP DL740 and one HP DL760 running RedHat EAS 3 and Oracle Application Server 10g. Each node had two gigabit Ethernet connections to the switch, mentioned above, for connectivity to the database servers. The objective of the test was to measure performance in an image only environment with throughput rates of 3 million images per hour, or the equivalent of 24 million image items in an 8-hour period. The benchmark target of 3 million images per hour was based on conversations with several large banks with similar average check volumes of 25 to 30 million per day. The system significantly exceeded the target performance goal. The results showed the benchmark configuration supported over 38 million image checks per day with a sustained rate. With the allocation of additional system resources, a processing rate of over 4.8 million images per hour was achieved over a period of several hours exceeding the target objective by more than 60% - with significant remaining capacity available within the database server. 6

7 In another development iteration, the image storage code and database were enhanced to use the Oracle intermedia ORDImage datatype and supporting APIs. The objective was to understand what overhead was added by using Oracle intermedia. Making this change to the code was very simple and took less than a day to implement and test. The changes were also transparent to other application code in the system. The benchmark results showed that the introduction of the Oracle intermedia datatype and the APIs had no measurable impact on the storage and retrieval performance of the applications or on the corresponding load placed on the Oracle 10g systems. In addition, the Synoran products benefited from this change by having image transformation functions performed as part of the database retrieval operations, rather than having to implement these functions in display or report generation code. Thus, the application architecture and corresponding code base has been simplified significantly by using the Oracle intermedia facilities in Oracle 10g, with no negative impact on performance. To see how easy it is to take advantage of Oracle intermedia functionality, go to: _quickstart.html CONCLUSION Check 21 legislation and a consumer shift from paper checks to electronic payment mechanisms are changing the payment systems marketplace. In order to realize financial gains afforded by these two influences, banks need to have an image-enabled payment system in place that will support check images as well as other forms of electronic payments. Oracle Database 10g is best suited to provide the database and infrastructure for this transformation. Oracle Database 10g provides the highest levels of security and scalability in the industry, 24 X 7 operational capabilities and optimal disaster recovery and recovery features. Oracle intermedia enables Oracle 10g to manage image and other multimedia in an integrated fashion with other enterprise information. Using Oracle Database 10g with intermedia to store and manage check images has many advantages over proprietary file systems. Storage costs are reduced, managing image data that is stored with other traditional types of data is easier, and development and training costs are reduced. Synoran s benchmark proves that storing check images in Oracle intermedia datatypes in Oracle Database 10g simplifies application architecture and has no measurable impact on the storage and retrieval performance of the applications. 7