RTS/X. Scalable Solution for Payment Processing Systems. Guiding Principles of the system architecture. Overview

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1 RTS/X Scalable Solution for Payment Processing Systems Overview RTS/X is a full-functional RTGS solution with enhanced monitoring and liquidity management facilities, DvP/PvP support and built-in tools for integration with other applications like General Ledger, Depository, etc. CMA s RTS/X system has adopted a business process philosophy and has been designed according to the latest information and telecommunication technologies. RTS/X is currently under operations in a number of countries. The package can be customized to fit any part of functionality missing, if any. The system allows to achieve a very good price/performance ratio in comparison with a typical numbers in similar projects. This is ensured by feedbacks of our Customers. CMA delivers to the Central Banks Straight- Through-Processing with a range of management capabilities to ensure security and integrity. RTS/X has modern GUI and APIs for integration with bank s current systems that makes easy Client operations and ensures: flexibility to incorporate further functionality as needed; adaptability to meet changing market and regulatory requirements; manageability of access, process and workflows; reliability and scalability of both solution and infrastructure; system-wide security. Guiding Principles of the system architecture RTS/X provides real-time settlement of payments. Any payment becomes final and irrevocable once settled; Online monitoring and reporting are a key point of system functional architecture; A special component is introduced into the system design to provide Central Bank and Participant with advanced monitoring capabilities; The solution contains powerful and flexible liquidity management mechanisms. A number of business parameters gives a possibility to control and manage liquidity in the system on individual and system-wide basis and mitigate associated risks; In addition to evident regularization of interbank communication infrastructure, the system allows use it not only for payment exchange but for communication with other systems that have no necessary functionality to communicate with Participants. It gives a possibility to build in future payment gateway to provide integral communication infrastructure at Central Bank; The technical and operational infrastructure are based on modern design, follows nosingle-point-of-failure principle and allows integration into current and future payment infrastructure. Participation Directory and Participant Management functions allow declaration of

2 Central node RTS/X DataBase RTS/X core Payment Administration RTS/X business level Integration Bus Interfaces to external systems Primary dellivery channels: Secure Extranet; an option: SWIFT BackUp dellivery channels: Dial-up, CDs etc. Payment Monitoring Participant Open API Interfaces to external systems Participant`s side participants in the system and define their participation mode (direct, indirect or subparticipant); All Participants in the system, including the Central Bank can execute a variety of high value or systemically-important payments in a single currency or in a set of currencies, in real time, using Secure Extranet; RTS/X supports offline and online interaction with other financial systems incl. General Ledger system. RTS/X provides special tool for data transformation from formats supported by external systems to RTS/X format and vice versa. RTS/X solution incorporates smart middleware PIE that provides a powerful set of tools and components for integration. Technical view The system technical design has the following characteristics: The system has a distributed architecture with a Central Node at Central Bank site, frontend s for Participants for message (electronic payments and securities) exchange and monitoring; As a principle, all components are open and therefore adaptable and easily integratable. Interbank messages may be transmitted over secure extranet. Nevertheless, all necessary components for delivery via SWIFTNet are included into the software package; The customer interface is consistent regardless of delivery channel; Access management is role-based; The message interaction between all components, at a functional level, is managed centrally; Integration with currently existing systems at Central Bank is provided by using a set of built-in adapters via commercially available well-known protocols; an open messagebased API for this integration is available as well; Different environments may be created: production, UAT, and disaster recovery; System availability and performance for all components is centrally managed; Resilience and high-availability is provided at all levels throughout the system. The system complies with industry standard Open System conventions. Business logic is designed based on the widely accepted principles

3 and guidelines. It consists of system functional modules such as message processing, settlement, and query processing and is described as business processes in structured, graphical form: Unified Modelling Language (UML). This helps to understand clearly how system works and which part of which business process should be customized to accommodate future changes. On a data level such standards as SWIFT (including ISO15022) as well as an XML standard are implemented. This standardization from business logic level down to the data level allows interfacing easily with other systems and/or expand the system with additional functional modules. As it is shown in the picture, the RTS/X solution consists of the following major components: RTS/X Central Node is responsible for RTGS system functionality; RTS/X Central Bank payment that provides GUI to Central Bank personnel responsible for payment exchange; RTS/X Central Bank administration that provides GUI for full control and monitoring of the system; RTS/X Participant provides Participants with access to the system. This may have different configurations (GUI-based, API-based, mixed etc.) to fit needs of a particular Participant and generally consists of Payment to provide payment exchange, and Monitoring used for monitoring and control purposes from Participant perspective; Network communication component provides information exchange between Central Node and Participant s sites via Primary and Backup delivery channels like Secure Extranet and/or via SWIFT network. Security RTS/X has incorporated many security standards in a set of mechanisms that guarantees a wellsecured working environment for all parties. As an internationally-wide system that will be adopted and implemented across all banking institutions in the region where it is installed. The security features offered by the system are as important as its functionality. Digital signatures and certificates supported by are used to guarantee identity of communicating parties. It is used as a fully fledged mechanism that satisfies almost all security needed of such an application, starting from authenticating users logged on to the system, passing through to authorizing data items being exchanged and ending with utilizing a secured line channel for safe communication. Industry-leading digital certificate management solution from RSA Security, Inc. provides ultimate level of trustworthiness. RTS/X Redundancy RTS/X network solution is designed for redundancy and scalability. There is no single point of failure within the primary system, while backup system at the alternate site protects from disasters and major failures, affecting the primary system as a whole. The system includes automatic failure recovery mechanisms and backup facilities and procedures providing high level of service availability and mitigating risks. To cater for disaster, the infrastructure is designed such that the business operation can be resumed with minimal data loss in case of disaster. In addition, it is designed in a way that switching over from Production Site to DR site and vice versa can be achieved within very short period of time. RTS/X includes problem management procedures and tools: problem management can be implemented with change control procedures, thereby ensuring that all changes are logged and that all problems are closed. The system is based on business-driven approach and modern technologies. It allows to achieve a very good price/performance ratio in comparison with a typical numbers in similar projects. This is ensured by feedbacks of our Customers. Adherence to standards RTS/X is compliant with World Bank and BIS principles and recommendations regarding systemically important payment systems thus allowing the mitigation of all types of related risks. RTS/X fully adheres to SWIFT standards and was certified for SWIFT Ready Payments Label

4 for years RTS/X significantly reduces or even totally avoids all types of risks related to payment systems (legal, operational, financial, security and systemic). RTS/X development and implementation processes are compliant with the following major standards and certification programs: BIS Core principles for systemically important payment systems (cpss34e), BIS General Guidance for payment system development (cpss69), New developments in large-value payment systems (cpss67), Delivery versus payment in securities settlement systems (cpss06), CPSS/IOSCO Recommendations for securities settlement systems, and other related papers (e.g. Bank of Finland Discussion paper Large Value Payment systems principles current and future developments, 2004 etc.); ISO/IEC 17799:2005 Information Security Management System standard; ISO9001:2000 certification for Provision of information technology consulting services ; ISO9001:1994 certification for Provision of customer support services ; SWIFT Gold Ready Label 2004,2005, 2006; SWIFTNet Ready Nostro Account Information Provider label 2006; SWIFTReady Payments label. Implementation view CMA s implementation procedures cover the design, development, supply, installation, configuration, testing, implementation, delivery and support of RTGS system. Responsibilities are aligned with these management streams both within the CMA team and, correspondingly, within the Central Bank team. The project is further divided into phases that include requirements analysis, testing and training. During all the different phases of the project, the CMA team works very closely with their counterparts at Central Bank. CMA realizes the importance of the RTGS project to Central Bank at large. To supplement the local knowledge and cross-industry project expertise of the Central Bank and Participants, CMA assigns a dedicated team for project implementation who bring their individual experience of implementing RTGS system and other banking project expertise to the successful delivery of the Central Bank project. As the leading RTGS systems supplier, CMA has great proficiency in the various aspects of developing and delivery of national payment systems. RTS/X Key Benefits CMA delivers a modern solution based on extensive experience that company has in a number of similar projects, the key benefits of the RTS/X are listed below: Functionality of the systems covers all aspects of payment and securities operations processing, liquidity management facilities, multi-currency support (for future use), billing calculations, statistical analysis etc.; The system is based on proven, high-reliable, state-of-art and efficient technologies that are successfully implemented and used in a number of projects throughout the world; Business-driven approach provides transparency of application behaviour from business point of view. Graphical description of System s functionality allows Central Bank staff to better understand the system behaviour and thus significantly decrease the human error risk factor; High level of STP-processing is based on automated processing of all requests and uniform data presentation based on XML standard and SWIFT standards; DvP models I and II are built-in functionality of RTGS. DvP model in RTGS solution may function with any external system that support these models as well. DvP model III is an option that may be used by Central Bank if necessary; Development approach and technology used together with an advanced training course set gives a very high level of knowledge transfer to Central Bank staff necessary for support and maintenance of the Systems; Flexibility of technology used in solutions allows Central Bank to adapt their solutions easily according to their regulations and policies changes and evolutions;

5 Multi-tier modular design provides high performance and scalability. It is possible to distribute the load within each Layer and between Layers. All processes may be executed in parallel. The solution supports: automatic load balancing; manual distribution depending on the user groups; manual distribution depending on the function groups. Easy extension of functionality and manageability of the solution is based on modular design ensuring a granularity nature of changes during customization; only affected modules should be changed ensuring easy and flexible management of the entire system or its separate components; Powerful monitoring of business, application and system behaviour is available to Central Bank administrators providing full picture of system behaviour, Participant s and their Users activities, bottlenecks, etc. Componentbased architecture allows monitoring and audit the behaviour of separate modules and components; and the entire system; The RTS/X backbone is Integration Bus PIE that is a set of dedicated tools for connection with other external applications. Integration Bus includes special components, Adapters that allow establishing of information exchange with External applications using commercially available third-party tools and protocols like WebSphere MQ, MSMQ etc. These adapters perform necessary message transformations to/from external systems proprietary formats. This allow to Central Bank significantly decreases an efforts for customization of external application for linkages with RTS/X system since Adapters will care about format transformations. This feature allows seamless and intelligent integration with other existing systems at Participant s level and Central Bank level. The solutions utilize Secure Extranet for any message exchange including payment and securities operations; A support of SWIFT network connectivity is included into the basic package as well. The SWIFT network may function instead of or in a parallel with Secure Extranet if Central Bank will decide it useful. In case of mixed network solution some of Participants may use SWIFT network and others may utilize Secure Extranet. For example, the system(s) will accept messages received form one Participant via SWIFT network, process them and route answers to another Participant via Secure Extranet. This functionality and all necessary software components are included into the basic package of the solution; The solution is fully SWIFTNet-Ready and supports full range of SWIFTNet services: InterAct, FileAct and Browse services; Simple user interface. Any workstation s user interface is very simple so any user who has an idea about web applications can easily get used to its interface. The system allows navigation through its features using a simple pull down menu that navigates him within a pre-categorized set of sub menus according to the system queues. For fresh users of the system a language dependant online help system may be added so that the user will have dynamic help feature accessed by a key click to describe the steps he or she may take with in the context of the current screen or queue. Users can choose between the normal mouse based input mechanisms and a fully keyboard based mechanism so that users coming from the world of main frame terminals will not have any difficulty getting used to carry out their tasks using RTS/X workstations. All user tasks can be achieved using either the mouse or the keyboard so that users who get used to use the keyboard do not have to learn new habits using the mouse. When they starts learning on a mouse based system they can switch to using the mouse in no time because the system is already supporting both accessibility methods without any need to setup any parameters. The navigation menu coexists in all screens so that a user can browse easily between pages wherever he was in the system. The user can select to populate certain fields in the system with a preset default values so that all newly worked on items will take these values as defaults unless the user determinately changed the value. All these features are found to increase the productivity on a significant ratio level.