8. Straight through Processing - An Overview

8.1 Introduction

The Funds Transfer Module

The Funds Transfer (FT) Module that constitutes a part of Oracle FLEXCUBE is a front office system that handles the processing of all kinds of payments, both local and foreign. These can be initiated by financial institutions or banks for themselves, or on behalf of their customers.

The FT Module is a comprehensive transaction handling and management system, which integrates with the overall system for accounting and messaging pertaining to payments and the relevant charges/taxes and capture of related MIS information. The system handles all the necessary activities during the life cycle of a contract, once it is booked. All the relevant account balances will be updated when Transfers are processed.

The essence of funds transfer transactions (transfer of money and the generation of appropriate messages) is handled comprehensively by this module.

Straight Through Processing

One of the most important features of the Funds Transfer module of Oracle FLEXCUBE is the facility of processing incoming payment messages to their logical end without manual intervention. Even though the term Straight Through Processing (STP) refers to the processing of all sorts of incoming messages (without manual intervention), in this chapter, the term refers to STP of incoming Payment Messages alone.

Payment Messages received from originating Banks through the SWIFT network are received and parsed; the contents of the message together with the static maintenance in the system result in resolution of the contract fields, which then leads to automatic booking of contracts in the system. Straight through processing begins with an incoming payment message (for instance, MT 103 or an MT 202) and ends with an FT contract in Oracle FLEXCUBE, which may be a Customer or a Bank transfer.

A general outline of the sequence of events during a Straight Through Processing cycle in the system is given below:

  1. Message Capture: Incoming payment messages received from other Banks through the SWIFT network are picked up by Oracle FLEXCUBE and displayed in the Incoming Message Browser.
  2. Message Upload: This function interprets the messages in the incoming browser and propagates the interpreted messages into the Funds Transfer (FT) Upload tables in the system. The FT upload tables are a set of standard gateway tables through which FT contracts can be uploaded into Oracle FLEXCUBE.
  3. Funds Transfer (FT) Upload: This is the function which interprets the contents of the FT Upload (gateway) tables and creates Funds Transfer contracts in Oracle FLEXCUBE.
  4. Life Cycle Processing: Subsequent to the creation of the contracts by the FT Upload function, they can be viewed or processed just as any other FT contract in the system.

The above sequence is explained just to understand the processing logic in Oracle FLEXCUBE. As far as the end user is concerned, all these steps would happen seamlessly as if it were one continuous process, which begins with receiving the message and results in the creation of the resultant FT contract.

The interpretation of an incoming message can lead to the creation of the following types of funds transfer contracts in Oracle FLEXCUBE:

This user manual explains the straight through processing feature exhaustively, taking you through each process in the sequence of events.