Oracle to Integrate with SWIFTNet

To help to enable back-office integration of critical information from financial institutions, Oracle will integrate its Oracle E-Business Suite and Oracle Application Server with SWIFT's messaging platform.

Oracle has announced its intention to enhance the Oracle E-Business Suite and Oracle Application Server to be compatible with SWIFT, the industry-owned cooperative providing secure, standardized messaging services and interface software to 7,650 financial institutions in more than 200 countries. Oracle plans to complete the first phase of the integration initiative in the first half of 2005.

The SWIFT community includes banks, broker/dealers and investment managers, as well as their market infrastructures in payments, securities, treasury and trade.

This integration into SWIFTs messaging platform, SWIFTNet, is part of an initiative designed to help enterprises improve operational efficiency and reduce risk by enabling seamless, back-office integration of critical information from numerous financial institutions. It is also expected to provide an opportunity for financial services providers to extend the information services and value they deliver to their business customers.

Oracle Corp. is partnering with SWIFT to bridge the "last mile" of integration between financial services providers and customer back-office systems. Historically, financial services organizations have delivered information to their corporate customers "front doors" but did not take steps to ensure that the information could be integrated with customer back-office business information systems. Corporations have had to develop customized integration options or work with third parties to effectively leverage such data in their organizations.

Numerous business, regulatory and national security requirements—including corporate governance and compliance directives, and the need to monitor capital adequacy and operational risk to achieve accounting transparency—are driving the need for an end-to-end solution that bridges the information chasm between financial services organizations and their customers.

"By integrating Oracle E-Business Suite applications with SWIFTNet, we can provide tangible benefits to financial services organizations and their business customers," said Steven Miranda, vice president of financials applications development at Oracle.

"Financial services providers, looking for innovative ways to maintain a competitive edge in a market characterized by declining transaction volumes, will have the tools required to expand their role as valued information providers. Business organizations, in turn, will have a fast path to high-quality enterprise intelligence that provides a foundation for informed decision-making and profitable growth in a competitive market."

Integration will enable enterprises to achieve a single source of data—encompassing both financial and information transactions—to run their global business or a personal account. Enhancing Oracle applications for procurement, payables, receivables, payments and expenses to utilize the SWIFTNet standard format will let corporations create a single, integrated processing environment.

This environment delivers a consistent, transparent view of data across the enterprise to optimize the use of funds on account with various institutions. Corporate treasurers, in turn, will be able to integrate back-office information with their bank-supplied cash management services to improve funds allocation throughout the day.

The Oracle solution, based on Oracle Application Server, is expected to provide SWIFTNet interoperability for users of Oracle applications as well as for users of other ERP systems.

Oracle Application Server can enable facilities to receive, translate, transform and help ensure delivery of SWIFT messages; to audit and track them; and to integrate them with corporate information systems, enterprise data hubs and Corporate Business Processes. Companies also can use standard Trading Partner Management facilities to create, monitor and manage agreements with SWIFT business partners.

SWIFTNet has several components that service different areas of financial information processing. The SWIFTNet Funds solution allows distributors, investment managers and their service providers to leverage the investment made in SWIFT, to deliver the same operational efficiencies in investment funds as in other asset classes. SWIFT has deployed a comprehensive set of new ISO 20022 (XML) message standards that allow for the majority of communication flows to be automated between all parties in the transaction chain.

These XML standards include account opening/maintenance, orders, confirmations, statements, price reporting, cash-flow reporting, commission reporting and static prospectus data. SWIFT calls the solution scalable, resilient and cost-effective. Tailor-made to the needs of the investment funds distribution players, SWIFTNet Funds allows standardization and automation of all business flows linked with investment funds distribution, according to SWIFT.

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Institutions currently testing SWIFTNet Funds include Fidelity Investments, JP Morgan Fleming and Unicredito Italiano.

Another component is the SWIFTNet Cash Reporting, which responds to banks requirements for obtaining real-time Nostro account balances and account entry information from their Nostro Agent. It allows financial institutions to improve liquidity management, reduce risk, shorten reconciliation cycles and benefit from early exception handling.

Nostro account-related information is exchanged between the service provider (Nostro Agent) and the service user (Nostro account owner) via a set of XML messages over SWIFTNet InterAct, with confidentiality and integrity of all messages and enforced message validation by the network, according to SWIFT.

The Banque de Luxembourg, Deutsche Bank and the Royal Bank of Canada are among the financial institutions currently testing SWIFTNet Cash Reporting.

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