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Active Technologies - HRL
Active Monitoring for STP in Financial Markets | 30/10 © 2003 IBM Corporation
Active Monitoring for STP in Financial Markets
Tali Yatzkar Haham
2 Active Monitoring for STP in Financial Markets | 30/10 © 2003 IBM Corporation
Outline� Introduce the Transaction Flow Monitoring application
� Global Integrated Monitoringfor a business process across the company and external parties
� Real time Alerts, Status, Queries
� Applies to many domains (retail, ordering systems, insurance,…)
� Present the underline Active Technology tool - Amit Situation Manager, ADI
� Will be introduced in the financial market domain that is goingtrough a STP revolution
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STP – Straight Through Processing
STP / Business Efficiency Definition:
“ Automating internal and external trade processing
from inception to completion in real time”
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Business Drivers for STP/Business Efficiency
� T+1 Settlement Regulation
� Increased Trade Volumes
� Cost Savings
� Lower the risk (longer to settle trade, greater the risk)
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Transactions are complex…
�
O rd e r M a n a g e m e n t S ys te m E xe cu tio n M a n a g e m e n t
O p e n O rd e r
23
S M C P
va lida te the se c u rity
v a lid a te the P a rty & ac c o u n t
4
E x c h a n g e
T ra n sa c tio n M a n a g e m e n tC a lcu la tio n sF ig u ra tio nA llo ca tio nS e tle m e n t D e ta ils *
A M = A cco u n t M a s te rC P = C o u n te rp a rtyS M = S e c u rity M a s te rF C = F e e s a n d C h a rg e sF R = F e e s a n d ch a rg e s ru le sS I = S e tle m e n t In s tru c tio n s
A M
R e fe re n c e D a taO p e ra tio n & Tra n sa c tio n D a ta
O rd e r1
In v e s tm e n t M a n g e r
O p e n O rd e r
up d a te s o pe n o rd e rs w ith f il ls
R e q ue s t fo r E x ec u tio nN o tific a tio n o f C o m p le tio n
B lo c k tra de
M e ssa g e /T ra n sa c tio n /F lo w
5
6
7
8A llo c a tio n s , N e t p ro c e ed s , a ffirm s , c o n firm s
C on firm a t io n a n d A llo ca tio n
9F u lly fig u re tra d e
P u rc h a s e & S a le sC le a r in g
S M 3 C P 3A M 3
S e ttle m e n t
S I2
1 0 S e tt le m en t In s tru c tio n a n d P aym e n t
C P 2 F C F RA M 2S M 2 S I1 *
F ro n t-O ffice
M id d le -O ffic e
B a c k -O ffic e
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STP Impediments
Existing IT systems are built from many applications that are:
� Typically designed to accomplish one narrow function� Data focused rather than business process focused
Missing:Global integrated monitor that � receives events from all the applications, � correlates the incoming events with information
about the structure of the business process
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Our Application: Transaction Flow Monitoring
Real Time Alerts / Data
Easy to Change / Add
Alerts, Status, Queries
Provides Global Integrated Monitoring
Alerts, Status, Queries
Low Integration Cost,No need for technical staff
Low Maintenance Cost,Dynamically respond to
business changes
Easy to Define
No Code
High Control,Identify Needed
Improvements (BP, IT)
Immediate Repair Reaction,
Reduced Penalties
Capabilities: Benefits:
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Transaction Flow Monitoring
Goal:Monitor transactions,
through their process flow
from inception to settlement
� Alerts
� Status
� Queries
“$ volume, comparing to expectation, at each time point”“% of exceptions”
“Details of rejected transactions of specific client”
“The # of transactions that are waiting for manual repair crossed a given threshold”“Three rejects for the same platinum client received today”
9 Active Monitoring for STP in Financial Markets | 30/10 © 2003 IBM Corporation
Transaction Flow Monitoring Architecture
EnterpriseApplications
External Parties
IncomingEvents
EnterpriseDB
����
ADI
SituationManager
Definition GUI
App DB
Status
Query
Alert
Monitors:
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Amit – Situation Manager
AmitSituationManager
EventSources
Definitions
DetectedSituations
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Amit - ADI
� Models and Monitors entities and dependencies
Our application uses subset of ADI capabilities:� Model and monitor Entities, using State machines
� Our Entity: Trade� State Machine: The trade business process
The state machine is manipulated by eventsThe state machine triggers events and alerts
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Created
Rejected Cancelled
TimeoutViolation
Sent
Waitingfor repair
Pending
Acknowledged
Completed
a b
c
b
de
e e
e
e
f
cgi
jb e
h
ADI monitors transactions entities• Triggers events for database updates• Alerts on violation of transaction processing
Transaction’s State Machine
CreateException
CancelSent
ERROR!
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Transaction Flow Monitoring - Summary
�Real time Alerts, Status, Queries
�Global Integrated Monitoring for a business process across the company and external parties
�Applies to many domains (retail industries, ordering systems, insurance,…)
Key Advantages:� Resilience – XML definitions, no code, easy to define, easy to change� Expressiveness - expressive alert language
Status:� Generated substantial interest with IBM financial services leaders� Key component in proposal for a large financial institution
Active Technologies - HRL
Active Monitoring for STP in Financial Markets | 30/10 © 2003 IBM Corporation
Active Monitoring for STP in Financial Markets
Tali Yatzkar Haham
15 Active Monitoring for STP in Financial Markets | 30/10 © 2003 IBM Corporation
What is an on demand business?
Has business processes that are:
� Integrated end-to-end across the company
� Integrated with key partners
� Dynamically responsive to changes
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Application Definition Input
In XML:� Events� State Machine� Alerts
In SQL like:� Status � Queries
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Alert Examples
Transaction Level Alerts:
� No acknowledgement/reject received from FRB within one hour fromsending a message.
� Processing of an order will breach the client's credit threshold. Urgent alert if we are approaching FRB Funds close.
Business Level Alerts:� Abnormal number of payments received from a specific bank
(account) within the first two hours or business.
� Three rejects received from FRB, within a single working day, for the same platinum client.
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Alerts Monitor
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Status Monitor
Displays:
� Updated overall state
� # of transactions at a specific process state,
� $ amount of those transactions
� # of transactions that violate SLA
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Status Monitor
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Queries Monitor
Presents the user with a list of query templates
Query Template Examples:
� Present the reject reasons for specific customer transactions
� Present the number and the total dollar amount of rejects for a specific reason
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Queries Monitor