Financial System Integration Tools on Way

WebMethods Inc. and IBM are each readying software that should help financial institutions better integrate systems that share data inside as well as outside the firewall.

WebMethods this week will announce integration suites, a set of integration solutions designed to meet the requirements of the retail banking, wholesale banking and securities industries, as well as a business unit dedicated to the financial sector.

Separately, IBM last week introduced WebSphere Financial Network Integrator, an integration infrastructure for financial networks based on the companys WebSphere application server middleware.

Both companies offerings promise to solve two issues facing financial institutions: how to process electronic payments in a business-to-business setting and how to move to a next-generation intercompany network.

WebMethods integration suites, available now, are pre-configured with the appropriate adapters, standards and processes to address requirements for each sector. For example, the securities industry suite is packaged with WebMethods Integration Server. Also included are the companys securities-specific Global System of Trade Preferences and Omgeo adapters. Both are needed for the T+1 initiative under consideration within the securities industry that aims to standardize a one-day settlement for all financial transactions.

IBMs WebSphere Financial Network Integrator provides an integration foundation for financial messages of any kind. The companys 300 large banking customers have been using its Merva financial messaging platform, IBM officials said. To avoid code rewriting on the banks part, IBM will embed Merva into Integrator.

Integrator contains a common services layer that provides financial institutions with dual-payment detection, auditing and public-key infrastructure for security. An extension to Integrator that supports IBMs Trusted e-Payments Initiation solution is based on the Identrus collaboration standard for e-commerce networks.

Integrator also provides message warehousing, security, event logging and communication channel administration, officials said.

Integrator is slated to go into beta by July and be generally available in the third quarter.

Both IBM and WebMethods are working to address interbank communications. Some 7,000 financial institutions communicate with one another over the Society for Worldwide Interbank Financial Telecommunication, or SWIFT, network, which has been based on X.25 messaging technology for many years. The network is due to be upgraded by the end of 2004 to become SWIFTNet, an XML- and IP-based network, IBM officials said.

Officials at WebMethods, of Fairfax, Va., said they will focus on development of a SWIFT adapter as well as on additional industries in the financial sector such as wealth management and insurance.

Similarly, IBM is planning the rollout of its offerings to coincide with the move to SWIFTNet, said company officials in Armonk, N.Y.

“It is important that this is coming from IBM,” said Robert Hunt, an analyst with TowerGroup, in Needham, Mass. “Despite all the e-businesses out there, IBM is still the true standard for the banking industry. All the core processing is centered on mainframe [systems]; while we still have apps running on other platforms, banks still look to IBM to be the technology leader.”

“This gives the banks a clear solution to comply with the new SWIFTNet requirements,” Hunt added.