Interoperability and immature standards were found to be the key obstacles to the use of Web Services technology for cash management systems integration during a five-month proof of concept test undertaken by a group of US banks and vendors.
The tests, conducted under the auspices of the Financial Services Technology Consortium (FSTC), were aimed at validating the use of Web Services technologies for cash management application and data integration for bank-to-bank and bank-to-customer connections. FSTC brought together Bank of America, JPMorgan Chase, Wachovia, NEC and its consulting arm Niteo Partners, and Sun Microsystems to test aspects of interoperability, security, and the reliability of Web Services technologies when applied to multi-bank reporting services in treasury management.
Feedback from participants suggests that more work in technical standards and interoperability is needed, particularly for applications and bank interactions that require end-to-end security and reliability to meet expected service levels. Key management was found to be a particular problem, with security considered especially weak in open source code and commercial offerings. XML signature and encryption packages also proved difficult to use across heterogeneous technology platforms.
Interoperability at the interface level, the use of attachments and the transport of non-XML data using Soap messaging was also found wanting. In addition, having multiple open source and commercial technologies use a common Web services description language (WSDL) file caused further problems as the automatic code generators carried numerous bugs.
Despite the drawbacks, the project produced a set of Web Services, reference implementation, and next generation treasury portal to demonstrate the utility of the services developed.
Mike Versace, director of financial services for Niteo Partners, the consulting arm of NEC in North America, says participants are pressing ahead with further exploratory work.
"These include a closer examination of the business economics for these technologies to replace existing financial data exchange methods used today for corporate and retail banking applications," he says. "This process will include the deployment of phase one services in a live customer pilot, and adding additional business services to the architecture to support identity assertions, payments, fraud reporting, and other financial transactions."