Books
in black and white
Main menu
Share a book About us Home
Books
Biology Business Chemistry Computers Culture Economics Fiction Games Guide History Management Mathematical Medicine Mental Fitnes Physics Psychology Scince Sport Technics
Ads

Managing. The risk of Payment System - Turner P.

Turner P. Managing. The risk of Payment System - John Wiley & Sons, 2003. - 253 p.
ISBN 0-471-32848-0
Download (direct link): managingtherisksofpayment2003.pdf
Previous << 1 .. 32 33 34 35 36 37 < 38 > 39 40 41 42 43 44 .. 88 >> Next

Division X1 Yes/Yes 1,000,000,000 8,000,000
Division X1 Yes/Yes 1,000,000,000 9,000,000
Division X1 Yes/Yes 1,000,000,000 5,000,000
Corporation X Yes/No 3,000,000,000 10,000,000
92
Team-Fly®
Bank’s Perspective of Funds-Transfer Risk Managment
Exhibit 4.2 Algorithms to Central Transfers for Entities in Exhibit 4.1
Is the Is the Then Is the Is the Then
Account’s... Group’s... Account’s... Group’s...
Opening Balance Opening Balance Transaction Transaction
+Money received +Money received limit limit
-Money sent -Money sent >payment >payment
+DOL +DOL amount? amount?
>payment amount? >payment amount?
Yes Yes Test Yes Yes Pay
Txn
limit
No Yes Test No Yes Pay
Txn
limit
Yes No Reject Yes No Reject
No No Reject No No Reject
Exhibit 4.3 Variation of Exhibit 4.1; DOL Total Equals Sum of DOL for All Entities
Legal Entity/ DOL Transaction
Account Holder Limit
Division X1 Yes/Yes 1,000,000,000 5,000,000
Division X1 Yes/Yes 1,000,000,000 10,000,000
Division X1 Yes/Yes 1,000,000,000 8,000,000
Division X1 Yes/Yes 1,000,000,000 9,000,000
Division X1 Yes/Yes 1,000,000,000 5,000,000
Corporation X Yes/No 5,000,000,000 10,000,000
93
Wire Transfers
Exhibit 4.4 Variation with Parent Corporation Also an Account Holder
Legal Entity/ DOL Transaction
Account Holder Limit
Division X1 Yes/Yes 1,000,000,000 5,000,000
Division X1 Yes/Yes 1,000,000,000 10,000,000
Division X1 Yes/Yes 1,000,000,000 8,000,000
Division X1 Yes/Yes 1,000,000,000 9,000,000
Division X1 Yes/Yes 1,000,000,000 5,000,000
Corporation X Yes/Yes 1,000,000,000 10,000,000
Corporation X No/No 6,000,000,000
Group
Handling Rejects
Transfers that are “rejected” because of DOL and/or violation of Transaction Limit must be:
• Approved or rejected by an authorized individual,
• Placed in a hold state, or
• Resubmitted for a new balance check (to see if more money has entered the account).
When are these actions performed? How are transfer queue priorities established? How are delays and/or handling errors avoided? These questions may sound arcane, but they are of vital interest when millions or even billions of dollars are involved.
When a transfer is rejected because of inadequate balance + DOL or for exceeding the Transaction Limit, it is sent to a human being for review and a decision. Transfers that are “approved” after being rejected are returned for processing with the instruction that the balance check and/or Transaction Limit check be ignored.
Transfers that are “removed” after rejection are either returned to the sender because of insufficient funds or held pending customer instructions. In these cases, customers will
94
Bank’s Perspective of Funds-Transfer Risk Managment
usually request a “hold,” providing specific information regarding the cover, or request an “exception approval.”
When the cause of the rejection is known to the bank—for example, when expected funds have not yet been received—the decision to hold the transfer for later processing is often made by the bank itself.
Although these risk management options are used frequently and are fundamentally necessary in a transfer operation, the volume of transfers is often so heavy that in a high-volume operation these options are used for only a small fraction of the exceptions processed, the “exception handling.” In most cases, the transfer is simply returned to the automated process for repeat testing on the assumption that the cover will arrive soon.
Reject-Return Loop, Exception Handling Complications. It is in the
reject-return loop that the real complications in exception handling are found. For example:
• How many times and how frequently should the transfer be retested?
• When should the transfer be again rejected and sent for a human decision?
• Should the rejected transfer be queued in First-In, First-Out (FIFO) order for retest?
• Or should it be placed behind more recent transfers to allow for new money?
Previous << 1 .. 32 33 34 35 36 37 < 38 > 39 40 41 42 43 44 .. 88 >> Next