Finance and Banking

DEPCON

DEPCON is the common name for the Unisys Distributed Enterprise Print Controller software.  This software is often deployed in financial data centers that use it to break apart and distributed aggregated reports.  As more and more print jobs moved to electronic distribution formats, file transfer technology was frequently applied to either handle incoming report batches or to deliver the final product.

ANSI X.9

ANSI X.9 (or “ANSI/X.9″) is a group of standards commonly used with bulk data transmissions in item processing and Fed transfers.

An example of an ANSI X.9 standard is “ANSI X9.100-182-2011″ which covers how XML can be used to deliver bulk data and images.

Published ANSI standards may include some technical artifacts such as XML XSD documents, but typically rely on specific maps set up in specific transformation engines to completely integrate with backend systems.

SWIFT

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) runs a popular system used by banks around the world to quickly exchange transactions with each other.  Most international interbank messages use this system.  Unlike clearing houses or other institutions that provide intermediate or final settlement of financial transactions, SWIFT is simply a secure transaction service.  Remote banks may use the system to directly transact with one another, but SWIFT is not itself responsible in any activity that may occur within any bank-to-bank transaction.

SWIFT provides limited file transfer services.  For example, SWIFTNet Mail can be used to intercept messages bearing attachments and route them to other SWIFT members through the SWIFT network rather than the open network.   Internally, SWIFT has standardized on XML-wrapped transactions in its store-and-forward architecture.

Though an early advocate of near-realtime geographic redundancy across continents (North America and Europe), SWIFT pulled all operations back into the EU in 2009 after a 2006 ruling in which the Belgium government declared that SWIFT cooperation with U.S. Federal authorities were a breach of Belgian and EU privacy laws.   (Today, cloud service providers often avoid spanning geopolitical boundaries because of this and similar landmark rulings.)

BIC

A Bank Identifier Code (BIC) is an 8 or 11 character ISO code used in SWIFT transactions to identify a particular financial institution.   (BICs are also called “SWIFT addresses” or “SWIFT codes”.)  The format of the BIC is determined by ISO 9362, which now provides for unique identification codes for both financial and non-financial organizations.

As per ISO 9362:2009, the first 8 characters are used for organization code (first 4 characters), organization country (next 2 characters), and “location” code (next 2 characters).  In 11-characters BICs, the last three characters are optional and denote a particular branch.  (Leaving off the last three characters or denoting them with “XXX” indicates the primary office location.)  If the 8th character in the BIC sequence is a “0″, then the BIC is a test BIC.

SEPA

The Single Euro Payments Area (SEPA) is an EU initiative to unify payments within the EU.  It is primarily driven by the European Payments Council.  (SEPA is not, by itself, a standard.)

European Payments Council

The European Payments Council (“EPC”) coordinates European inter-banking technology and protocols, particularly in relation to payments.  In 2011 the EPC boasted that it processed 71.5 billion electronic payment transactions.

The EPC assumed all the former duties of the European Committee for Banking Standards (“ECBS”) in 2006.  It is now the major driver behind the Single Euro Payments Area (SEPA) initiative.

The official site of the EPC is http://www.europeanpaymentscouncil.eu/

ECBS

The European Committee for Banking Standards (“ECBS”) was a standards body that focused on European banking technology and infrastructure.  It was formed in 1992 and disbanded in 2006; it has since been replaced by the European Payments Council.

It is still common to see references to the ECBS in GSIT and PeSIT documentation.

OTS

The OTS (“Office of Thrift Supervision”) is a United States Treasury Department office that oversees “savings and loans”, particularly those involved in real estate mortgages.  The OTS examines each member institution every 12-to-18 months to assess the institution’s safety and soundness.   In that role, it behaves much like the FDIC does with federally chartered banks.

The OTS’s official web site is www.ots.treas.gov.

See also: “FFIEC” (umbrella regulation, including state chartered banks), “FDIC” (federally chartered banks), “the Fed” (U.S. central bank), “NCUA” (credit unions) and “OCC” (national and foreign banks).

OCC

The OCC (“Office of the Comptroller of the Currency”) is an independent bureau of the United States Treasury Department.  It charters, regulates and supervises all national banks. It also supervises the federal branches and agencies of foreign banks.  In its regulatory role, it is similar to the FDIC.

The OCC’s official web site is www.occ.treas.gov.

See also: “FFIEC” (umbrella regulation, including state chartered banks), “FDIC” (federally chartered banks), “the Fed” (U.S. central bank), “NCUA” (credit unions) and “OTS” (savings and loans).

NCUA

The NCUA (“National Credit Union Administration”) is like the FDIC for credit unions.  It provides insurance to credit unions and expects a solid level of operations in return.   It provides regulations and audits member credit unions for fitness.

The NCUA’s official web site is www.ncua.gov.

See also: “FFIEC” (umbrella regulation, including state chartered banks), “FDIC” (federally chartered banks), “the Fed” (U.S. central bank), “OCC” (national and foreign banks) and “OTS” (savings and loans).

Federal Reserve

The Federal Reserve (also “the Fed”) is the central bank of the United States.  It behaves like a regulatory agency in some areas, but its main role in the file transfer industry is as the primary clearinghouse for interbank transactions batched up in files.  Nearly every bank or bank service center has a file transfer connection to the Fed.

As of January 2011 there were exactly three approved ways to conduct file transfer with the Federal Reserve.  These were:

  • Perform interactive file transfer through a web browser based application.  This has serious disadvantages to data centers which try to automate key business processes as the Fed’s interactive interface has proven to be resistant to screen scraping automation, and no scriptable web services are supported.
  • Perform automated file transfers through IBM’s Sterling Commerce software.  This is the Fed’s preferred method for high volumes.   Since Sterling Commerce software is among the most expensive in the file transfer industry, many institutions use a small number of installations of Sterling Commerce Connect:Direct for their Fed connections and use other automation software to drive Fed transfers through Perl scripts, Java applications or other methods.
  • Perform automated file transfers through Axway’s Tumbleweed software.  This is the Fed’s preferred method for medium volumes.  As with Connect:Direct, Tumbleweed Fed connections are often minimized and scripted by third-party software to reduce the overall cost of a Fed-connected file transfer installation.

The Federal Reserve’s official web site is www.federalreserve.gov.

See also: “FFIEC” (umbrella regulation, including state chartered banks), “FDIC” (federally chartered banks), “NCUA” (credit unions), “OCC” (national and foreign banks) and “OTS” (savings and loans).

FDIC

The FDIC (“Federal Deposit Insurance Corporation”) directly examines and supervises more than 4,900 United States banks for operational safety and soundness.  (As of January 2011, there were just less than 10,000 banks in the United States; about half are chartered by the federal government.)

As part of its bank examinations, the FDIC often inspects the selection and implementation of file transfer technology (as part of its IT evaluation) and business processes that involve file transfer technology (as part of its overall risk assessment).

The FDIC’s official web site is www.fdic.gov.

See also: “FFIEC” (umbrella regulation, including state chartered banks), “the Fed” (U.S. central bank), “NCUA” (credit unions), “OCC” (national and foreign banks) and “OTS” (savings and loans).

Check 21

“Check 21″ is the common name for the United States’ Check Clearing for the 21st Century Act, a federal law enacted in 2003 that enabled banks to phase out paper check handling by allowing electronic check images (especially TIFF-formatted files) to serve all the same legal roles as original paper checks.

Check 21′s effect on the file transfer industry has been to greatly increase the size of files transmitted through banks, as check images are frequently large and non-compressible.

FFIEC

The FFIEC (“Federal Financial Institutions Examination Council”) is a United States government regulatory body that ensures that principles, standards, and report forms are uniform across the most important financial regulatory agencies in the country.

The agencies involved include the Federal Reserve (“the Fed”), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC), and the Office of Thrift Supervision (OTS).  Since 2006, a State Liaison Committee (SLC) has also been involved; the SLC’s membership includes the Conference of State Bank Supervisors, the American Council of State Savings Supervisors, and the National Association of State Credit Union Supervisors.

The FFIEC’s official web site is www.ffiec.gov.

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