Antoine Cuypers, Director, Strategic Alliances & Key Accounts at Intix and Guy Moons, Head of Solution Engineering for Enterprise Payments at FIS, understand better than most the real day-to-day challenges faced by businesses as they look to manage and understand their daily transactions.
In this joint interview, the two industry stalwarts assess the major challenges and opportunities facing the financial services industry today around effective data management.
What are some of the biggest problems facing businesses in the financial services industry today?
Guy Moons: Modern payment infrastructures are distinguished by an increasing trend towards modularity and a focus on microservices. This results in data being dispersed across various points within the payment ecosystem. For banks, it is crucial to maintain visibility and traceability of their transactions at any given moment. Consequently, there is a necessity for a centralised repository outside the payment ecosystem that consolidates data from the disparate components. This repository would enable banks to conduct targeted searches for their specific transactions, including those within complex areas.
Antoine Cuypers: It’s not only about getting the data accessible but also instantaneously. Additionally, financial institutions are under heightened scrutiny from regulators and compliance bodies, necessitating the provision of transaction details much more swiftly than in the past. Previously, a compliance inquiry might request information about a person’s transactions involving a specific currency over a designated period. Now, the expectation is to furnish this information with greater immediacy, which necessitates the introduction of more effective transaction data management solutions.
What are some of the key transaction data management problems facing financial institutions?
GM: Considering the functionality of the payment engine, it’s crucial to prevent its operation from being hindered by reporting demands. For me, the most undesirable scenario is one where a report request is executed on the operational database simultaneously with the processing of thousands of payments per second. That’s why it is imperative that the processing speed and efficiency of the payment engine remain uninterrupted by managerial requests for reports, which requires a strategy.
How important is it for financial institutions to adopt business solutions that enable them to locate, collect and aggregate data while remaining lightweight and non-disruptive to their operational systems?
AC: It’s essential! The information is always out there, but you need to find the data, collect it and then aggregate it in a way that makes sense. Moreover, the task of correlating and visualising abstract data should be executed using a streamlined, lightweight management system. This is essential to avoid burdening operational production systems, a challenge that is by no means trivial. When you look at the current market, there are minimal, if any, specialist companies like Intix that are dedicated to serving this niche segment.
GM: We are firm advocates for transferring data to an isolated environment, thereby enabling the generation of detailed reports without affecting the operational integrity of the primary platform. When dealing with in-flight transactions, it’s crucial to pinpoint the exact location of a payment within a multi-instance or multi-modular environment, especially when issues arise. This represents our first use case and underscores the significance of employing Intix technology to track transactions within our ecosystem.
Can offloading data to separate environments for reporting and analytics also help companies to maintain operational efficiencies and reduce disruptions?
GM: Certainly, it’s an effective measure. Here at FIS, our strategy includes offloading substantial amounts of data from the operational databases of payment engines to a shadow database designed for long-term storage. This approach presents several benefits. Primarily, it reduces the size of the operational database, leading to enhanced performance and manageability. Secondly, it facilitates more efficient and rapid system upgrades, as the smaller operational databases are less cumbersome to modify and maintain.
AC: You only need to look at a company the size of FIS to realise the benefits of this approach. The business currently has customers with long histories of transactions just in their running systems. Adopting this data offloading strategy can lead to a reduction in the size of the operational database by up to 80 percent, significantly diminishing the volume of data stored in the primary system. This system is required to be both rapid and perpetually accessible. Data is transferred to a secondary system where storage costs are lower, yet the data remains readily available. It’s a win-win-win situation.
Let’s talk about legislation, specifically ISO 20022, which aims to provide a single standardisation approach to be used by all financial standards initiatives. How has this framework challenged companies since its introduction?
AC: The initiative is commendable, yet it functions as a broad framework. Observing the various ISO 20022 implementations around the globe reveals unique nuances in how each system interprets and manages data. The core challenge lies in making data accessible. To illustrate, consider the task of locating a specific transaction from five years ago—a proverbial needle in a haystack of billions of records. The concern should not be about the technical format of the transaction or the data silo in which it was stored. The objective is to retrieve it efficiently using common business terms like monetary values and names.
GM: Simultaneously, ISO 20022 furthers the imperative to maintain the integrity of the data in adherence to the myriad of regulations and compliance requirements. By employing innovative indexing techniques, we facilitate access to data through abstract models and business views that are both user-friendly and secure in terms of data integrity. We’ve showcased our new solution with Intix to some customers and the feedback we’ve received is that they’re really thrilled by these new capabilities as they enable an unlocking of transaction data that was previously unattainable.
How easy is it for financial services companies and banks to integrate systems like this alongside legacy programs?
AC: Companies like this can’t afford to ignore modernization. In fact, in the past decade this seems to have been one of the biggest trends across the world of financial services. This modernization has now set the stage for the integration of more specialised components in a seamless fashion. From this perspective, it’s an opportune moment in the payments industry to introduce these innovative solutions. Therefore, there’s a strong case to be made that this new partnership between Intix and FIS has come at the perfect time.
