Insulating Your Applications from Regulator and Market Change

Insulating Your Applications from Regulator and Market Change

Neil Clarke

Market Engagement Director at Volante Technologies

Views 777

Insulating Your Applications from Regulator and Market Change

05.04.2016 11:45 am

It is with great pleasure that my colleague Ali Mentesh and I, will be presenting at the IFINTEC conference in Istanbul on April 12/13. The conference, covering the financial technology space in the EMEA region with a particular focus on Turkey, aims to highlight the latest banking technology to over 1000 delegates.

As is the theme for many meetings in 2016, the new digital challenges facing banks (open access banking, distributed ledger technology, to name but a few) as well as on-going regulatory change will be high on the agenda.  Though not a current member of the EU and thus not directly impacted by EU regulatory change such as SEPA compliance or the PSD2 directive for example, the Turkish banking community is of course impacted by global rules set by bodies such as the Basel Committee on Banking Supervision (BCBS) with directives such as BASEL II and III, or PCI compliance for card transactions, as well as having local regulation set by bodies such as the BDDK (Banking Supervision and Regulation Agency), SPK (Capital Market Boards of Turkey) and TCMB (Central Bank of Turkey).

As with many regulatory changes as well as those imparted by market infrastructure providers e.g. SWIFT, on an international basis, or TCMB locally in Turkey, much of the impact is technical in nature. This typically requires existing banking systems to be made compliant with new financial messaging standards or at least updated to modified versions. Business applications at banks, either those developed in-house or provided by 3rd party vendors, often require significant software updates to comply with the modified data formats. As well as all the associated testing of required software updates there is the associated application functional regression testing required to ensure software updates do not impact business-as-usual processing.  Activities of course all carried out at considerable additional expense.

However, there may be another way; one that both reduces the impact on core applications and that can be executed more quickly and at lower cost.

Organizations with such challenges are implementing powerful insulation layers sitting within their Enterprise Service Bus (ESB) architecture that offers transformation of formats from old to new for impacted applications. For formats that regulators and/or national or international market infrastructures require, the insulation wrapper has pre-designed transformations that are executed to rapidly convert the outdated formats to the newly mandated data structures, modifying and enriching the encompassed data fields as necessary.  Conversely, the transformation layer can map the received formats back to the existing internal application format, again reducing impact on an organization’s established processes.  This approach results in faster, lower cost compliance with decreased risk to an organization’s core business.

We look forward to continuing discussions on this subject and more at IFINTEC 2016.

 

Latest blogs

Tom Kellermann Carbon Black

Governance, Risk and Compliance - Enacting Proactive Risk Management

In the highly regulated industries of finance, healthcare and energy, a focus on governance, risk and compliance (GRC) is crucial to effectively combat a cybersecurity breach. Unfortunately, when considering international data sharing, this can Read more »

James Daniels FIME

Key takeaways from MWC Shanghai and Seamless Asia

At the end of last month, two major technology events took place in Asia. The first was Seamless Asia, which focused on the future of finance and commerce. The second, MWC Shanghai, centred around ‘Intelligent Connectivity’ – bringing together Read more »

Henry Balani Encompass Corporation

KYC Solutions Provider Encompass Corporation Comments on FCA Anti-Money Laundering Annual Report 2018/19

From this report, it is clear that the FCA is taking real action across the board when it comes to tackling money laundering. It is important to note the focus on Capital Markets. Given the reputation of London as a major financial centre, this is Read more »

Aditya Arora Teleperformance DIBS

How can financial institutions keep the human touch despite the ever growing wave of automation?

The past decade has welcomed an era of rapidly evolving and innovative technology, launching the race for automation and use of Artificial Intelligence across verticals in order to streamline processes and ease tasks for its employees and customers Read more »

Lina Andolf-Orup Fingerprints

Fingerprint On The Pulse: Biometrics On The Move In More Places Than One

We may be halfway through 2019, but as the year hurtles onwards, it’s important to pause and reflect on the latest and greatest news from Q2. With milestones surpassed – and fading into the distance – coupled with the ongoing adoption of biometrics Read more »

Magazine
ALL
Free Newsletter Sign-up
+44 (0) 208 819 32 53 +44 (0) 173 261 71 47
Download Our Mobile App
Financial It Youtube channel