Background

In October 2014 RBA Governor Glenn Stevens announced that he wanted Australian banks to work together and modernise the nation’s payment systems to keep pace with technological innovations.  He issued an ultimatum – build a better payments system or we will make you.

Mr. Stevens then reminded Australia’s banks that other comparable countries had already modernised their payments systems years ago.

“In the area of real-time payments, we have seen major initiatives launched in Sweden and Singapore,” he said.

“The Swedish system was launched in December 2012 … which enables households to send real-time payments via their mobile phones on a 24/7 basis, 365 days a year. Singapore’s system … was launched in March this year.”

“Is there a plausible reason to accept Australia falling behind?”

 [Extract from SMH Article published 23/10/2014]

So what does it mean to have a “modernised payment system”?   While we understand that complex and large corporations such as financial institutions do not rely on technology alone to deliver business processes, there are some obvious needs that must be addressed by the underlying technologies.

It is important for a modern payment system to be capable of:

  1. conducting near real-time transactions,
  2. enabling unprecedented availability metrics,
  3. interfacing efficiently and effectively with modern user devices, and
  4. delivering uncompromised integrity and security.

Current payments ecosystem

For the most part, the banking and financial services sector in Australia has a good reputation for delivering secure information systems. And it is also clear that the sector has developed a wide range of excellent end-user applications on traditional and mobile platforms. However, both transaction speed and system availability have been areas of growing concern.

It has been said millions of times before, but the truth is, we are living in a hyper-connected world.  Not only customers, but also corporations (both sides of the equation) expect everything to be  “instant and always on”. However, our national payments infrastructure has not made the transition into this modern reality.

Moving money between Australian accounts can take days. That’s right days!  The Australian public is using web applications, mobile device applications, and expect to see things in near real-time.  The public wants transactions to happen with speed and easy to use.

On any day, there are hundreds of scenarios where our financial transactions take too long and cause undue grief.  When a public user logs onto their bank’s website, to make a payment, performing a direct transfer or making a payment via Bpay they are confronted with a statement indicating 2-3 days for payment to land in the receiver’s account.  This seems odd to most the Australian public, and obviously with the leadership of the RBA, the same thought.

Speed of transaction aside, there is also growing concern about availability and stability of the payments ecosystem.   CBA this year have had two major disruptions to their electronic banking infrastructure, one on April 15 and the second on August 22.   Having availability issues like this obviously erodes confidence and clearly demonstrates a lack of modernization, there are so many technologies and architectures out there today that now make these type of outages highly unlikely.

So where does this leave us? While we some level of confidence in the security and integrity of our payment infrastructure, we are well behind when it comes to transaction speed and system availability.

In today’s global competitive environment, performing near real-time financial transactions with a extremely reliable and highly available ecosystem isn’t being innovative or market leading, it is simply keeping up at this point.

We need to catch up, and we need to do it fast.

Solution

How do we solve these issues of the timeliness and availability of our payment systems?

#CassandraIsTheAnswer

Apache Cassandra has been built to be extremely fast and extremely resilient.

Now don’t get me wrong, I am not saying that the Apache Cassandra technology is the panacea that will solve all the Australian banking modernization objectives, but it will go a long way to providing the lightning fast, highly available and highly scalable platform on which a modernized payment ecosystem can be built.

Cassandra has been architected for real-time enterprise databases that require vast scalability, high-velocity performance, flexible schema design and continuous availability – all the missing requirements of a modern payment ecosystem.

Cassandra’s elastic scalability allows you to easily add capacity online to accommodate more customers and more data whenever required.  In addition, the “always on” architecture contains no single point of failure and ensures that systems can be architected for continuous availability for business-critical applications that can’t afford to go down, ever.

Fast linear-scale performance also enables sub-second response times with linear scalability.  Google recently demonstrated that they could achieve one million writes per second writes per second on Google Compute Engine.

Allied Payments demonstrated, they were able to get their queries from 75 milliseconds or 80 milliseconds to 9 milliseconds, nearly a 90% reduction in response time!

At the Cassandra Summit in San Francisco this year (September 2014), Apple presented to the community that the company is running 75,000 Cassandra nodes. This was amazing for two reasons, the first being that Apple barely talk at outside conferences, and secondly, for years everything this company has done has been built in-house with their own custom built technology.

It is obvious that Apple is running some of their core business applications on Cassandra, dealing with transaction volumes that dwarf even Australia’s largest banks and they put this all into place over the last 2 years. Whilst maintaining close to 100% availability for these services.

There are additional advantages however in using this technology, not only do you get the transaction response time that you need to engage effectively with your customer, the Cassandra technology also provides you with the ability to perform deep analytics on large datasets, which then in turn helps you to get better value out of your data and more effectively engage with your customers.

The Apache Cassandra database technology will also start to provide some real competitive advantages to those institutions that are early adopters.

Many financial institutions are now aware that having the technology base of Cassandra will actually start to also provide a competitive advantage in this race to provide modern and amazingly efficient banking and payment interfaces.

Being able to engage effectively with the end-user provides not only a better user experience but also provides a level of confidence in the technology and capability that underpins their financial services.

More information

For more information or to receive any assistance with the Apache Cassandra Database Technology, contact us at info@instaclustr.com.

Or spin up a Cassandra node right now by signing up at http://www.instaclustr.com

Planet Cassandra

There are several financial institutions around the world that have committed to the Cassandra technology, here are a few that have been identified at Planet Cassandra.

http://planetcassandra.org

Credit Suisse Credit Suisse utilizes Apache Cassandra’s resiliency for the global financial services company’s risk management systems called Project Hippo.
Suncorp The Suncorp Group has leading general insurance, banking, life insurance, superannuation and investment brands in Australia.
First American First American Financial deploys Cassandra in Microsoft Azure with a goal of storing 18 billion title documents across the United States.
ING Group ING, a multinational banking and financial services corporation, is developing with Apache Cassandra to improve availability and resiliency.

There are also a number of providers of payment system technology that are using Cassandra.

Allied Payment Allied Payment Network Inc. offers online bill payment service to financial institutions including banks and credit unions as well as directly to consumers.
Womply Womply is a next generation payments data company, using Cassandra to help merchants and credit card processors monitor time series transaction data.
Xoom Xoom Corporation is a digital money transfer company that allows users to securely transfer money online.

References

Sydney Morning Herald

“RBA tells banks to build new payment systems or we will make you”
http://www.smh.com.au/business/banking-and-finance/rba-tells-banks-to-build-new-payments-system–or-we-will-make-you-20141023-11ag03.html
23 October 2014

News.com.au

“Commonwealth Bank online banking down”
http://www.news.com.au/finance/business/commonwealth-bank-online-banking-down-customers-riled-up/story-fnkjidjt-1227032754346
22 August 2014

ITNews

“Commonwealth Bank suffers nationwide IT outage”
http://www.itnews.com.au/News/382851,commonwealth-bank-online-services-down.aspx
15 April 2014

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