Settlement System

Module Functions

This Module is intended for the processing of internal and external documents (payments, receipts, extracts, free-format documents) of a bank, as well as providing for interaction with the bank’s external systems (BISS, Clearing, SWIFT, TELEX, etc).

Key Specific Features of the Module
Key specific features of the Module are:

• Centralized data processing
• A wide range of external payment systems providing for interaction
• Enhanced potentialities to customize documents processing parameters
• Facilities for automatic routing of payments
• Automatic maintenance of card-indices of unpaid documents
• Support of investigation on payments and processing of free-format documents
• Enhanced facilities to monitor routes and documents

Centralized data processing
To process documents of a bank a unified centralized software-and-hardware platform and a unified base of customers and accounts are used whereby the following functions are specifically provided for:

• General reduction of time for processing of payments of a bank
• Processing of intra-bank payments (including inter-branch ones) in a real-time mode
• End-to-end processing of documents coming to the computer-aided banking control system of a bank from all sources
• End-to-end servicing of bank’s customers ¹.

Interaction with external settlement systems
The Module provides for interaction (receiving /generation and processing of messages with accounting of operations) with the following external systems:

• BISS, Clearing
• SWIFT
• SWIFT RUR4
• SWIFT RUR5
• SWIFT RUR6
• TELEX

To ensure integration interaction with external (relative to a Settlement System, systems and modules such as Customer-Bank, Economic Accounting, Systems of maintaining economic and financial agreements, etc.) the following facilities and mechanisms can be used:

1. A software interface of Settlement System functions (API) whereby all functions of the Settlement System have a software interface complying with Equation standards. This interface makes it possible to arrange calling of any functions of the Settlement System from both Equation modules and the bank’s own modules or from external systems
2. File data exchange, i.e. the Settlement System provides for a possibility to arrange interaction with external systems by way of using a unified format of data exchange files (Unified External Format hereinafter referred to as UEF) If so required the Module can be supplemented with file processing facilities with additional formats. The Module current version provides for processing of files with the following formats:
   ­ Clearing system (BISS System)
   ­ SWIFT, SWIFT RUR4, SWIFT RUR5, SWIFT RUR6 systems
3. MQSeries is a system of guaranteed delivery of messages

Relocation of parameters
The system of relocation of parameters of the Settlement System provides for the following possibilities:

• A possibility to conduct dynamic change of the format of the Unified Base of Documents, i.e. a possibility for a bank to independently define details of documents
• Relocation of screen images while processing documents in compliance with bank’s requirements
• Relocation of rules of automatic completion of details while processing documents
• Relocation of rules of checking details of documents
• Relocation of the logic for processing of documents
• Determination of any number of options on control/authorization of payment documents
• Relocation of parameters of receiving/ analysis of messages (SWIFT, TELEX, UEF, BISS, clearing)
• Relocation of rules of acknowledging messages
• Relocation of rules for operations accounting on a document for given stage of document processing

Routing of documents
All Payments processed by the Settlement System are subject to routing. Its result is performance of a payment in the Bank (a receiver of funds is a customer of one of branches or a LORO corresponding bank, or the Bank itself), or performance of a payment by way of debiting a VOSTRO corresponding account (external payment).
Routing of documents in the System is accomplished proceeding from the following principles:

• Maximum use of own correspondent banking network
• Automatic/manual determination of an outward route to execute the Bank’s payment document depending on relocations of the process for this document type and routing rules
• Automatic checking of limits for routes
• Computation of a value date for route relocations
• The primary mode to effect payments is a mode of effecting a payment “to the day”, i.e. on the day of debiting a customer’s account. To observe this principle for each route “a settlement hour” parameter is determined and it is subject to automatic checking while routing a document

The System provides for a possibility to predict changes in the volume of payment documents directed to correspondent accounts by maintaining scheduled and actual volumes of payments along the route.

Maintaining card-indices of unpaid documents
The Settlement System provides for computerization of documents processing pending acceptance (payment requirements) or unpaid due to insufficient funds in accounts of payers (including those in LORO accounts)
The System provides for the following functional possibilities:

• Accounting of documents in card-indices №1, №2, №3
• Provisioning of amounts of unpaid documents in a customer’s settlement account
• A possibility of automatic payment of documents in card-index №2 and day queue of deferred payments (when funds are available in a customer’s account) in a real-time mode and/or on the stage of a business day completion
• A possibility of automatic partial payment of card-index documents (within the available funds) with respective updating of a card-index document amount
• Generation of reports on card-index documents
• Scan of the history of maintaining card-indices

Investigation Process, Processing of free-format documents
The Settlement System provides for computerization of investigations in respect of amounts credited to “Suspend accounts”, answerback investigations and processing of free-format documents.
The System provides for the following functional possibilities:

• Processing of documents with suspended debits/credits
• Processing of auto enquiries (group of messages n99) from SWIFT, TELEX
• Processing of internal enquiries
• Categorization of free-format documents and determination of processing rules for each category
• Generation of enquiries
• Generation of responses for enquiries

Monitoring of routes and documents
Facilities for monitoring of routes² and documents provide for the following functional possibilities³:

• User determination of monitoring conditions and criteria
• Monitoring by properties of documents
• Monitoring of documents by conditions
• Monitoring of the state of routes on any date

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1 End-to-end servicing means providing a client with a possibility to perform settlement operations in his/her accounts with any subsidiary of a bank irrespective of the subsidiary in which such client has opened his/her accounts maintained by such bank.

2 Payment Routing means specifying a route (accounts to execute payments and of external settlement system) and document processing within the framework of a relevant technological process.

3 Monitoring of routes and documents means obtaining by a user of integrated reports on the state of routes and documents by means of a system of enquiries with inclusion of the following information:

• A list of documents containing their status, amounts and other key details of documents , a set of which may be changed by a user
• Detailed information on each document
• Total and subtotal amounts broken down by a user, including the predicted and actual volume of payment documents along a route.