Sterling Commerce, a provider of business integration solutions, has joined forces with LogicaCMG to create an EBA Connection service designed to enable banks to exploit the Euro Banking Association’s deployment of EBA STEP2.
“By helping banks to easily integrate their payment systems with STEP2 and to enable faster and more cost-effective cross-border payment settlements as a result, we believe that the new EBA Connection will have a positive effect on cost reduction for the European financial community,” says Richard Spong, Financial Services Solutions Manager, EMEA at Sterling Commerce. “And, as the solution is integrated into SWIFTNet, it also will help users maximise existing SWIFTNet investments and achieve a quicker ROI. Longer term, the investment in the solution can be leveraged to support future business needs and software applications as new standards emerge and existing technologies evolve.”
EBA STEP2 provides a pan-European automated clearing house for high-volume, low-value transactions and bulk payments. It distributes payment instructions to any bank operating in the European Union by routing files through a central infrastructure. The automated process reduces the customer payment processing costs that have become significant since new regulations on cross-border payments come into force in Europe.
The so-called EBA Connection service is designed by LogicaCMG and operated by a Sterling Commerce’s application called Sterling Integrator. It aims to provide connectivity between banks and the EBA STEP2 system. “It was designed to progressively integrate domestic traffic as well as cross-border payments and to incorporate a table-driven engine for the conversion of domestic standards as required,” explains Sterling Commerce. “The solution also offers complete flexibility to accommodate future classifications of EBA transactions and data traffic as the network expands.”
For outbound traffic, the EBA Connection receives the original FIN message (MT103+) from the transmitting bank’s existing settlement system and converts it into the EBA STEP2 format. Transactions are accumulated to build bulk files for low-cost transmission to the clearing system via Connect:Direct for SWIFTNet and the SWIFTNet FileAct Service. Configurable business rules are applied to manage the delivery time and size of these bulk files to optimise the transmission cost. The EBA Connection then manages all subsequent validation and acceptance exchanges between the bank and the clearing system.
For inbound traffic, the bulk file received from the clearing system is unpacked by the EBA Connection, converted back into separate MT103+ messages, and routed to the back office system of the receiving correspondent.
“LogicaCMG and Sterling Commerce have jointly invested to design and deliver a family of solutions that will address the challenges faced by banks and financial institutions today,” adds Chris Benn, SWIFT Line of Business Manager at LogicaCMG. “From this best-of-breed partnership, we produced this EBA Connection, which enables organisations to realise lower transaction costs for their cross-border Euro payments. We look forward to extending this partnership further to address the business needs of the financial community.”