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"Inovis is a leading provider of on-demand Business Community Management solutions that empower companies to transact, collaborate and optimize communications with
every facet of their business communities. By standardizing and automating mission-critical business interactions, companies can dramatically reduce the complexity and cost of supply chain communication."
Source: Inovis
Centralizing Bank Connections
Digital Data Transmission is also known as :
Digital Data Transmission,
Data Transmission Media,
Data Transmission Privacy,
Bank Data Transmission,
Centralizing Bank Connections,
Managed File Transfer,
Secure File Transfer,
File Transfer Management,
File Transfer Benefit Savings,
Secure Online File Management,
MFT File Transfer,
Gartner Managed File Transfer,
Software Managed File Transfer Secure Data,
File Transfer Secure Data,
Managed File Transfer Solutions,
SSH Secure File Transfer,
File Transfer Protocol,
Transfer Files,
Secure File Transferring,
Data Transmission,
Data Transfer Solutions,
Data Transfer Object,
Data Transfer Calculator,
USB Data Transfer,
Data Transfer Switch,
Data Transfer Tool,
Data Export Tool.
How banks and insurance providers can
simplify connecting to corporate customers
and differentiate services with managed file
transfer (MFT) platforms.
Banking in a Time of Crisis
The global economic crisis is changing how banks and insurance
providers operate and compete. It's forcing them to rethink business
models and make hard choices about how to invest resources and
which services to deliver. Some organizations will disappear; others
will emerge from the crisis recognizable in name only. To succeed,
banks must take a fresh look at how they operate, where they invest
and how they manage technology.
With crisis comes opportunity. Just as some banks fade, others will
seize the opportunity to capture immediate savings while deploying
flexible systems, preparing them to serve new customers in new ways.
This white paper describes a new approach for how banks can connect
to corporate customers and use a managed file transfer (MFT) platform
to simplify data transfers, lower costs and deliver compelling services
to customers.
Competing Differently Through Transactions
The dark secret in wholesale banking is that much of the technology is
common to all banks, making it difficult to create and sustain
differentiated services. And as banking products are quickly copied by
competitors, customer service has become ground-zero for
differentiation.
In this context, a bank's electronic connections with their corporate
customers play a powerful role in determining their competitive
differentiation and cost structure. Many teams are held back, however,
forced to rely on decades-old file transfer systems that consume
between 60 and 80 percent of nondiscretionary spending, making it
difficult to reliably connect to clients and rapidly deliver new services,
hurting customer service and costs.
"B2Bank" describes the process of connecting banks to third parties,
including corporate customers, government agencies and other banks.1
These transactions and connections span funds management, insurance,
trade services, payroll, payments and foreign exchange orders.
Leading banks are turning to a platform-based approach for managed
file transfer to simplify how data transmission processes and enable
faster delivery of customer services.
The Data Transmission Challenge
Centralizing data transmissions and the management of customer
connections is a critical first step in differentiating from customers. To
enable this, the underlying file transfer platform must be efficient,
secure, "future-proof", and audit-friendly. Banks need visibility to file
transfer performance, extending report cards to customers, and a
remediation processes to resolve errors when things go bad.
How and why did data transmission get put under the spotlight as a
barrier to innovation? Looking back, a number of macros issues
contributed: restructuring, compliance mandates, legacy IT systems,
changes to buying relationships, and an increasing focus on
governance.
Recession-induced Restructuring
One of the byproducts of the global economic downturn that began in
2008 is a massive restructuring within financial services and other
markets.
With overall bankruptcy filings on the rise in the US (a 74% increase
from 2007 to 2008), many banks are seeing their corporate customers in
retail, automotive either restructure or close doors, often requiring a
change in their banking relationship and data connections.
And within financial services, a similar wave of bankruptcies, mergers
and reorganizations are flowing across banks, insurance providers and
other financial service providers, bringing changes to how shared
services teams manage corporate connections.
The pressure of compliance mandates
The last decade has seen a sharp rise in compliance mandates that
organizations must follow, impacting IT groups, finance and line-ofbusiness
owners to setup, manage and track new processes and reports.
To adhere to the mandates, IT groups must adjust policies, update data
requirements, reconfigure systems and provide the auditing and
reporting to track compliance.
Here's a snapshot of common compliance mandates that are making
data transmission more complicated for US banks and insurance
providers and financial services companies.
- SOX: The Sarbanes-Oxley Act requires that public companies
ensure the integrity of data used on financial statements and
holds directors accountable for data accuracy.
- HIPAA: The Health Insurance Portability and Accountability
Act requires that companies protect personal health records and
prevent unauthorized access and transmission.
- Gramm-Leach-Bliley Act: The GLB Act was passed in 1999 to
protect consumers' personal financial information held by
financial institutions and mandates privacy requirements.
- PCI DSS: The Payment Card Industry Data Security Standard
protects credit cardholder data and provides a minimum
security standard for data in-motion and at-rest, across
members, merchants and service providers.
- TARP: The Troubled Asset Relief Program allows the US
Treasury to purchase $700 billion in troubled mortgage assets to
promote financial market stability. The law establishes an
oversight and compliance structure and broad mandates for
transparency and reporting requirements for participating
institutions. The pressure on banks to provide transparency
and reporting will likely increase, given difficulties in tracking
the program's money flows and effectiveness.
Accidental architectures
Years ago, it was simpler to connect banks to corporate customers.
Beginning in the 1970s, most electronic connections were computer-tocomputer,
with little demands for quick setup, data encryption, digital
signatures, translation services or functional acknowledgements.
Importantly, the bank controlled how the connection process, including
file format and communications structure. Over the next forty years, IT
groups have created an "accidental architecture", complicating
connections by layering new file transfer tools on top of existing
systems. This trend was accelerated by the banking mergers during the
1980s and the shift to Internet transactions during the late 1990s.
Shifting Balance of Power
As the underlying technology has become common across banks
during the last two decades, banks have become "quick copiers" in
replicating their competitor's services. As this commoditization
occurred, banking customers had more choice in buying services and
therefore more power in dictating how to connect IT systems and file
transfers. This pendulum shift in the power in banking relationships
required banks to be more flexible and support a variety of connection
types, protocols and service levels, making their point-to-point systems
more difficult to maintain.
The Rise of Governance
As the "accidental architecture" evolved within bank IT groups and the
need to adhere to compliance mandates rose, managing governance of
file transfer processes has become a critical need for organizations. File
transmission teams now must enforce policies and processes across
two areas: machine-to-machine processes, related to the integration of
messages, files and transactions; and human-centric transactions,
relating to the collaborative processes across groups and teams.
Alternative File Transfer Approaches
Data Transmission Managers have turned to a number of different
approaches to exchanging files with corporate customers, government
agencies and partner banks, often cobbling together a patchwork of old
and new systems to support a diverse client base.
Here are a few of the most common file transfer approaches.
FTP
Since the 1970s, file transfer protocol (FTP) has become one of the most
common ways to move files in and out of an organization. FTP is
simple to setup and easy to use for individual use, particularly for adhoc
file transfers. But FTP has a number of limitations that make it a
poor and risky tool for enterprises. First, since FTP was originally
designed with minimal security, there's often no encryption for
passwords or files being transferred, making data open to attack or loss.
Second, file traceability and auditing are limited with FTP. While you
can confirm that the file was delivered to the recipient's FTP server,
there is no way to verify that the recipient downloaded it from the
server. And there is no audit trail of file usage to support regulatory
reporting requirements.
Point-to-point solutions
Direct, or point-to-point, connections have been used since the 1970s to
setup electronic transmissions between banks and third parties. As the
numbers and types of connections grew, the costs to translate, onboard
and maintain point-to-point connections grew. In addition to costs,
another drawback is lack of a centralized management process to roll
up views of status and transaction performance. While many banks
have shifted away from point-to-point connections, deploying
gateways along with Internet-based transactions, point-to-point
connections often remain and require ongoing maintenance to support
the connected clients.
File transfer software
Many banks have turned to secure file transfer (SFT) software packages
to consolidate corporate connections and mask complexity. These
approaches are typically behind-the-firewall software applications,
requiring resources to purchase and maintain hardware and software.
For many companies, these approaches fall short. First, they're often
limited to connectivity, without broader capabilities found in broader
managed file transfer (MFT) capabilities. Gartner highlights the
differences: "while 'secure file transfer' solutions are adequate for some
data transmissions, 'managed file transfer' suites address security
protections, but also tackle a company's internal and external audibility,
accountability and data control requirements."
A Platform Approach
Leading banks, insurance providers and other financial groups are
increasingly turning to a platform-based approach for managing file
transfers across customers, government organizations and other banks.
These needs are triggered in part by the increasing importance in
governance and deployment models.
Core Capabilities
- Guaranteed Data Delivery. Support for Checkpoint/Restart to
automatically restart transmissions if they are interrupted due
to operator error or failure within hardware, software or
network.
- Security. Support for managing file transfer risk, identity, access
and authentication issues across users and organizations.
- Visibility. Access to transaction activity status, performance and
usage metrics across multiple file transfer systems, masking the
complexity of transmissions across customers and external
trading partners.
- Onboarding. A lifecycle set of capabilities to provision and
change connections with customers, users, systems or thirdparties,
including rule setup, templates, invitations, data profile
repository, testing and certification.
- Exception management. Ability to monitor the health of the
network and data movement to uncover errors in the file
transfer process. Alerts, triggered notifications and drill-down
views to root cause data to speed up response and resolution
- Remediation. An embedded, web-based process to resolve
chronic errors across file transfer processes with internal teams,
customers and third parties.
- Protocol Management. Support for a broad range of protocols
for sending data between organizations, including legacy
protocols in place for decades as well as Internet-based
protocols such as AS2 and sFTP.
- Central Console. Consolidated infrastructure that reduces the
number of environments that required specialized scripting
- Small Partner Connections. Easy web-based access for smaller
customers to connect.
- Reporting and Auditing. Support for reporting service level
agreements, compliance and performance across messages, files,
transactions and users.
- Customer scorecards. Providing banking customers with shared
web access to a transparent set of report cards and metrics, in
order to improve customer service and competitive
differentiation.
Enabling Technology
- Flexible Delivery Options. Ability to deliver as software or
software-as-a-service (MFTaaS) model, enabling banks to keep
long-term options open and avoid lock-in to a particular
approach as needs change in capital budgets and IT
architectures.
- SOA Integration. Wrapping legacy systems in a service-oriented
architecture (SOA) allows for low-cost and rapid delivery of
new banking products as well as fulfillment of compliance and
regulatory mandates.
- B2B Gateway. A managed file transfer capability embedded in
an enterprise gateway to consolidate connections to third
parties.
Measuring the Impact
Modernizing your data transmission process and deploying a managed
file transfer platform can lower staff resources, reduce software
maintenance fees and improve customer satisfaction. To measure the
impact at your organization, sign up for a no-cost assessment at
inovis.com/solutions/managedfiletransfer/ or email info@inovis.com.
About Inovis
Inovis offers software and services that enable companies to do business
electronically across their entire trading community. Each day, over 20,000
companies across the globe rely on Inovis to reliably send and receive
purchase orders, synchronize data and manage exceptions in order to lower
supply chain costs and get products to customers faster. Founded in 1983, the
company is based in Atlanta, Georgia and has offices across the United States,
the United Kingdom and Hong Kong. For more information, please visit
www.inovis.com or email info@inovis.com.