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
Bank A
Co A
Bank B
Co B
Hub
Bank C
Co 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
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