Automated Storage Key To Resilient Payment Systems

While certainly not a new initiative, electronification has been gaining momentum following the severe liquidity and payment flow challenges since September 11, 2001. A new emphasis has been placed on building greater disaster tolerance into global payments processes, payment flow, and settlements between parties. The shift toward electronification is being driven by regulatory requirements such as the USA PATRIOT Act, the Uniform Electronic Transaction Act and the pending Check 21 Act. Even governing bodies such as the Bank for International Settlements (BIS) and the European Central Bank (ECB) have publicly mandated the implementation of secure real-time settlement systems.

To help accelerate the adoption of electronification of payment systems around the world, a new storage solution has been developed to improve the manageability and resiliency of a company's information assets.

Identifying Resistance

Despite the operational cost advantages of electronification, many companies are still reluctant to fully embrace it. A recent study by the New York Clearing House found that only 14 percent of U.S. business-to-business payments are electronic.

The study also shows that a primary barrier to real-time settlement is the absence of corresponding remittance information within most payment transactions.

This is largely a result of the limited integration between the multiple software applications used to control payables, receivables and cash management processes. And, because so many companies lack the technology necessary to change, the velocity of electronic payments has appeared to be no faster than paper checks.

A new storage solution, known as automated networked storage, has been designed to address these issues and allow for the consolidation of disparate heterogeneous storage resources.

The Solution To the Problem

Automated networked storage offers companies a way to efficiently manage, protect and share information assets with the creation of a logically centralized data repository. As client demands for integrated real-time payment information increases, so has the emergence of online banking services via the Internet.

By attaching network-addressable storage resources directly to existing public and private IP-based networks, a company has the ability to leverage sophisticated storage software that automates and controls the management and continuity of stored information.

Automated networked storage has emerged as the most comprehensive solution by combining intelligent software and services with the benefits of storage area network (SAN) for applications like data warehousing and OLTP; network attached storage (NAS) for file sharing and collaboration); and content addressed storage (CAS) for fixed content assets through integrated content management applications.

These networking technologies not only address the need for better utilization, less support requirements, increased recoverability and so on-but can open the door for companies looking to painlessly integrate their remittance information within payment transactions, thereby facilitating real-time settlement.

Core Capabilities

Mission-critical payment solutions such as payment image archives depend on a continuously available automated networked storage solution. An automated networked storage solution enables increased server consolidation, a rise in storage utilization rates, and enhanced business continuity through instant restore and automated backup capabilities.

A company can then make multiple backup copies of their payment data ensuring that the data is continually available, and will not interfere with other transaction applications.

In addition, companies can leverage the mirrored data to automatically detect unauthorized or potentially fraudulent transactions before the payment is committed.

In fact, a recent survey by the Association for Finance Professionals found that the most dominant concern of more than 67 percent of the respondents was fraud-detection capabilities in electronic payment initiatives.

Another unique feature of automated networked storage is its ability to leverage content addressed storage, or CAS, capabilities. CAS is the newest networking technology that provides performance, manageability and scalability.

CAS offers several key benefits for financial companies and global payment companies: assured content integrity (guaranteeing that all data will remain unchanged over a long period of time), plug-and-play scalability (automatically recognizes additional capacity as it is added), cost savings (eliminate the costs of storing the same file or image multiple times), and online information availability (making it possible to retrieve data from anywhere on the network at any time). Never before has data stored on traditional media such as film, tape, and optical been accessible at Internet-speeds.

Finally, automated networked storage enables companies to combine their many diverse servers, applications, and operating systems into a single information storage infrastructure so they can manage and consolidate the explosive growth of file-based data (such as e-mail, Web content, and user directories filled with documents), and preserve data that can never change such as check images, monthly billing statements, mortgage notes, and many other financial-based assets.

Philip Faulkner is director of the financial services group at EMC Corporation, in Hopkinton, Mass. He can be reached at (508) 435-1000.