User Group Meeting

Republic of Serbia

Stephan Kraft

Senior Account Director

Republic of Serbia

26/11/2009

Ilona Pouna, StockholmPoland, Ukraine, Estonia, Latvia, Lithuania

Team & regional coverage AT_CEE

Judit Baracs, ViennaPayments Market Infrastructures for whole region AT_CEEDirect: RZB group

Stephan Kraft, ViennaAlbania, Bosnia, Bulgaria, Croatia, Macedonia, Montenegro, Romania, Serbia, Slovenia

Silvana Micheli, Zürich(Commercial Assistant)

Silvana.micheli@swift.com

Michael Formann, ViennaRegional Head for AT_CEEDirect: AT, HU, CZ, SK and securities business for whole region

Do you find the error in the slide?

Ilona Pouna, StockholmPoland, Ukraine, Estonia, Latvia, Lithuania

Team & regional coverage AT_CEE

Judit Baracs, ViennaPayments Market Infrastructures for whole region AT_CEEDirect: RZB group

Stephan Kraft, ViennaAlbania, Bosnia, Bulgaria, Croatia, Macedonia, Montenegro, Romania, Serbia, Slovenia

Silvana Micheli, Zürich(Commercial Assistant)

Silvana.micheli@swift.com

Michael Formann, ViennaRegional Head for AT_CEEDirect: AT, HU, CZ, SK and securities business for whole region

4

The Region : Eastern Europe

Albania17 Live Users

Slovenia26 Live Users

Bosnia-Herzegovina31 Live Users

Bulgaria33 Live Users Croatia

38 Live Users

Eastern Europe :257 Live Users

SWIFT9,057

Live Users

http://3dflags.com/world/index.html

Republic .of Serbia

37 Live Users

Macedonia18 Live Users

Republic of Montenegro

12 Live Users

Romania45 Live Users

5

Eastern Europe0.78%

ROW99.22%

Eastern Europe : Traffic Share

Source : FIN_per Sales Area

AL2%

BG14%

BA9%

HR13%

MK2%ME

1%

RO37%

RS8%

SI14%

6

Sub heading if required

Eastern Europe : Traffic Growth

Growth

Source : FIN_per Sales Area

AL BG BA HR MK ME RO RS SI0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

Jul/2008 Jul/2009

1.3% - 8.5% - 7.5% -1.1% - 2.2% - 8.9% - 3.2% -11.2% - 4.5%

Payments91%

Securities4%

Treasury4%

Trade1%

7

Messages by market

Serbia

Payments92%

Securities1%

Treasury6%

Trade1%

Eastern Europe

Source : FIN_per Sales Area

Jul/2009 Growth

Payments -5.23%

Securities 25.62%

Treasury -15.25%

Trade -28.33%

Total -4.93%

Jul/2009 Growth

Payments -8,18%

Securities -33,40%

Treasury -38,15%

Trade -26,63%

Total -11,22%

SWIFT News

Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec10

11

12

13

14

15

16

17

18

19

2007 Actuals 2008 Actuals 2009 Budget 2009 Actuals

Average daily number of FIN messages (mln)Total SWIFT, all markets

November 2009 = average over the period 1 Nov till 18 Nov

Financial context

9

Year-to-date financial results

October 2009, in MEUR Actual Budget Δ

Operating revenues before rebate 465.5 488.2 -22.8

Operating expenses, DA and depreciation 429.6 460.3 -30.7

Operating profit 35.8 27.9 7.9

Financial context

• Market conditions weigh on business and operational performance• YTD operating revenue below budget

• Lower FIN traffic• Shortfall in interfaces sales• Sibos revenues

• YTD operating profit above target despite revenue shortfall• Significant benefits from cost restructuring programme

• YTD profit before tax at 11 MEUR after one-time cost of Lean

10

FIN Average Daily volumesActual growth October 2009 YTD vs October 2008 YTD

EMEA Americas Asia Pacific

Total

Payments -4.9% -4.5% -2.7% -4.6%

Securities -0.5% +8.8% -0.8% +1.2%

Treasury -17.5% -33.8% -11.3% -20.3%

Trade -9.6% -19.4% -7.2% -10.6%

Total -3.8% -1.6% -2.8% -3.3%

-10%..0%< -10% > 0%

Financial context

11

SWIFT2015 Input

Community consultation

Markettrends

SWIFT perspective

Technology evolutions

SWIFT2015

SWIFT2015

Cus

tom

erCost efficiency

Internet

Domestic networks

Cloud computingInformation sharing

Emerging markets

Marketplace

Real-time

Sec

urity

and

rel

iabi

lity

Risk

Reporting

Shared platform

Mobile

Software as a Service

Interoperability

Innovation

Partnerships

RegulationGovernance

Automation

Insurance Reach

Integration

Liquidity

SWIFT2015

Community consultation - Principles

• Ensure all segments of the community are heard

• Brief customer prior to consultation

• Record all our consultations

• Provide feedback to customer to show how their information

has been used

SWIFT2015

Questionaire

17

Thanks for your input!

MT202 COV

19

A cover payment

Clearing & Settlement

OrderingCustomer

Ordering Customer’s bank

Receiver's Correspondent

Sender’s Correspondent

Beneficiary Customer’s bank

202

103

910/950

Beneficiary Customer

UNKNOWN PARTIESIN THE COVER

PAYMENT

MT202 Cover

Standards documentation available via SWIFT User Handbook

Standards Release Guide (SRG) 2009

Payments Market Practice Guideline available via www.pmpg.info

Enter PMPG -> Documents -> Guidelines for use of the MT202 COV

Note: The PMPG document also includes a FAQ section.

Adobe Acrobat Document

MT202 COV (extract SWIFT SRG 2009)

MT202 COV (extract SWIFT SRG 2009)

MT202 COV (extract SWIFT SRG 2009)

MT 202 COV – to use or not to use?

• Sender:

–As of the 21st of November the MT202 COV is the proper message to send when covering for an underlying consumer credit transfer

–SWIFT can not police the use of MT202 COV

• Receiver: –General Use Message– If sent to you, you must able to process it

24

Responsibilities (1)

General:• Appropriate information should be included in payment

messages (not omit, delete or alter information)

Originators bank:• Complete information• Due diligence of originator (e.g monitoring against regular

patterns of an account activity)

25

Responsibilities (2)

Cover Intermediary banks:• Monitoring to ensure originator and beneficiary fields are not left

blank (and take appropriate measures like SAR report)• Document decisions taken• Screen against lists of names (could be outsourced to

Originator, but the FI is still fully responsible)• Monitoring of the correspondent relationship

Beneficiaries bank:• Identify the benificiary (according to customer due diligence)

26

Transparency of Originator – Field 50a

• In order to be FATF – compliant on Ordering Customer transparency you need:– Account Number (or if not available: Unique identifier)– Name and Adress

• If Adress is not available:– Date and Place of birth– Customer Identification Number– National Identity number

• In the European Union:– IBAN and name is sufficient

• Network rules change (e.g mandatory country code in option F)

27

SWIFT Business Intelligence Solutions

SWIFT Business Intelligence

You would like to know:• What is the amount of FIN messages sent / received – grouped

by message type, counterparty, country and other key attributes?

• What is the market share of your institution compared with your country / world-wide?

• What are the main components of your overall SWIFT costs? How could you minimize it?

• Who are most important business partners?• How are new services and strategies evolving?

29

Watch Portfolio

30

SWIFT Watch Analyzer

• Just global license• Most of international groups already have one• Can be re-used:

– Only need named end user (starting from 30 EUR / month)

31

32

SWIFTWatch Reports• Monthly Reports

• 9 different Reports available– FIN traffic distribution by market– Your market share in your country– Top 200 counterparties BIC11– FIN traffic distribution by region & top 10 counterparties– FIN traffic costs– Consolidated cost of ownership year-to-date– BIC8 billing amounts year-to-date– Monthly invoice overview– Trade Finance Report

• Between 25 – 80 EUR per report / month

Corporate Access via SWIFT

34

e-banking Y

host to host X

e-banking Z

VAN

“fax-banking”

Internet

leased line

PSTN

Corporate

Accountspayable

Accountsreceivable

Treasury

Other

Typical corporate-to-bank messaging landscape Today’s situation

35

SWIFT: A secure, standardised global single window to the financial industry

Accountspayable

Accountsreceivable

Treasury

Other

LENZATLLM

idd

lew

are

SWIFTNet

36

Corporate access to SWIFTAn evolution

1998Treasury Counterparty

• Access to all banks on SWIFT

• Message usage limited to treasury deal confirmations

2001MA-CUG

• Each bank sets up its own environment – Corporates can join several MA-CUGs

• No usage restrictions

Corporate A

Corporate B

Bank B

Bank A

Bank C

2007SCORE

• Each bank joins the SWIFT administered CUG - Corporates access all banks in SCORE

• Limited usage restrictions

37

Corporates on SWIFTWhere do we stand today?

2004 2005 2006 2007 2008

282

402

55

108

# registered corporate entities Geographical split

EMEA

Americas

69%

20%

Asia Pacific

11%

181

Alliance News

39

SWIFTNet and Alliance Interface release 6.3Where do we stand today?

SWIFTNet 6.3Messaging release

Area Changes FIN InterAct FileAct Browse

Overall 1. Changes for Distributed Architecture

HSM 2. Increased HSM capacity

Functionality 3. Traffic distribution to multiple SNLs4. Enhanced access control (reroute function)

Validation 5. Enhanced header validation6. Long term signature validation

Operations 7. Enhanced error text8. Increased SNL server throughput9. Enhanced service feature definition

Store&Forward 10. Faster detection of session abort11. Queue status report12. Non-delivery warning13. Increased receiver throughput14. Increased flexibility for file delivery

Browse GUI 15. Additional Browse GUI framework16. Updated usage rules for Browse

40

41

Alliance Access 6.3 Summary

Value Proposition Feature

Simplified deployment of business functions Thin client support

Central user management LDAP integration

Single window for MT/MX and files FileAct support

RMA integration Web Services

Industry standard for back office integration SOAP adapter

No message loss on database incident Database Recovery

Segregation of manual and STP flows Standalone Access

Control message delivery order Message priority

Segment

42

Alliance Gateway/

Starter Set

AllianceAccess/

Entry

https

AllianceMessenger

SWIFTNet

GUI harmonisationCurrent Messenger 6.0 (2008)

Browser MX message entry

MT message entry

WebStation

Workstation

Access/Entry Admin

PKI Admin

Service GUI

MT message entry

RMA

Gateway Admin

Browse

43

Alliance Gateway/

Starter Set

AllianceAccess/

Entry

https

AllianceWeb Platform

SWIFTNet

GUI harmonisationIntroduction of Web Platform 6.3 (2009)

Browser MX message entry

Gateway Admin

Browse

MT message entry

WebStation

Workstation

Access/Entry Admin

PKI Admin

Service GUI

RMA

FileAct Consultation

MT message entry

RMA

FileAct Consultation

Gateway Admin

Browse

44

Alliance Gateway/

Starter Set

AllianceAccess/

Entry

https

AllianceWeb Platform

SWIFTNet

GUI harmonisationAll functions on the Web Platform 7.0 (2010)

Browser

PKI Admin

Gateway Admin

Browse

RMA

MT message entry

Access/Entry Admin

FileAct Consultation

MX message entry

WebStation

Workstation

MT message entry

RMA

FileAct Consultation

Gateway Admin

Browse

Access/Entry Admin

PKI Admin

Service GUI

Alliance Messenger

Benefits:

– Better user experience: Easily accessible Graphical User Interface via a Web Browser (Internet Explorer) for Message input

– Less effort needed for installation and version upgrades: Avoid spending a lot of time installing on each workstation => central installation / upgrade is all what is necessary

– New functionality: amongst others full support of MX

messages => get familiar with new SWIFT solution like Exceptions and Investigations, SWIFTNet Funds,…) 

45

Alliance Messenger PROMOTION (2)

• Commercial conditions:

– Discount of 10% for 2 new SAM licenses                       Price: 3.960 EUR, Discount granted:  440 EUR

– Discount of 30% for 5 new SAM licenses                       Price 7.700 EUR, Discount granted: 3.300 EUR

– Discount of 50% for 10 or more new SAM licenses         Price: 8.950 EUR, Discount granted: 8.950 EUR

• Duration: valid from now on till end of 2009

46

47

SWIFTNet and Alliance Interface release 7.0Planning

SWIFTNet 7.0Messaging features overview (1/3)

Business featuresMessage Copy • Full copy (entire message)

• Available in T or Y modes with FIN-like options

File Copy • Full copy (entire file)• Sender can select copy destination

Message and file distribution • Send a message or file to a distribution list

Using solutions made easier • Using solutions based on membership rules• No specific subscription, no specific config

RMA for InterAct and FileAct • Ability to exchange authorisations for non-FIN• Ability to filter traffic based on such authorisations

48SWIFTNet Messaging Evolution

SWIFTNet 7.0Messaging features overview (2/3)

Operational featuresEnhanced store-and-forward delivery options

• Load balancing incoming traffic on several systems• More subset selection options

Session History Report • Overview of previous sessions with sessions statistics

Easier routing management using shared BIC operations

• Using one BIC, execute routing commands that affect all (defined) institution's BICs at once

Security and routing management through new Browse GUI

• WebStation functions for certificates, roles and routing management accessible through Browse

Enhanced capability to handle undeliverable traffic

• On request, SWIFT can hold or delete undeliverable messages from a receiver's queue

Traffic segregation • InterAct and FileAct use different line (Gold connectivity)

Enhanced error texts • Allows quicker identification of root cause

Automatic traffic routing to default queue

• If no specific routing rule is available, traffic is delivered into default queue

Easier notification reconciliation • Notifications now contain original message details

49SWIFTNet Messaging Evolution

SWIFTNet 7.0Messaging features overview (3/3)

Security featuresAbility to delete obsolete users • Allows Security Officers to mark obsolete users as deleted

On-line SWIFTNet Link certificate recovery

• Allows Security Officers to recover SNL certificates on-line

Enhanced access control to services

• Ability to control user access to services not using RBAC

Easier role delegation • Role delegation to a list of DNs in one action• Role delegation based on the profile of another user

Flexible Shared Security Officers functionality

• Allows to delegate the Shared Security Officers role within an institution and to limit their scope of authority

Security administration segregation • Ability to segregate certificate and role administration to dedicated branches for test/pilot purposes

Reporting enhancements • Certificate & roles reports• Activity log report

Simplified 4-eyes authorisations • Authoriser no longer needs to re-type all actions

General security enhancements • Includes: human password expiry enforcement

HSM enhancements • Related to resilience, security, operability and supportability

50SWIFTNet Messaging Evolution

Alliance Access 7.0

51

52

Access 7.0 Main Evolution

StreamlineGUI

EvolutionAutomation

Support

RemoteDisaster

Resiliency

Candidate features for 7.0

Company meeting – December 2008_final_v1 – Confidentiality: restricted 53

Phase OutEntryR7

Alliance RMAWithdrawal

SWIFTNet 7.0

Oracle DB

DB Recovery

FileAct Support

FIN Cold Start

LDAP Support

Telex/FAX

CAS LU 6.2

Disk Mirroring

R7.0 Alignment

Remove Dialup

Remove BKE

Access for RMA

Migration Tool

Product Streamlining

Candidate features for 7.0

Graphical User Interface Evolution

54

Web PlatformFor AccessFinalisation

Web PlatformMonitoringDashboard

Web PlatformFor Entry

Administration

Configuration

At a glance View

Multi Instances

Monitoring

Candidate features for 7.0

Unix Embedded

Automation and Scripting support

55

InstallationConfigurationManagement

OperationalMonitoring

Command line

Parameterized

Export Tool

Import Tool

Text File

Command line

Command line

Server based

Output XML File

Exit code

OperationalControl

Command line

Server based

Exit code

Install & Patch

Apply GUI rules

Candidate features for 7.0

Age Monitoring

Company meeting – December 2008_final_v1 – Confidentiality: restricted 56

ExternalOracle

InstanceSupport

Remote Disaster Recovery Support

DatabaseRecoveryEnhanced

Mode

InformationGap

Recovery

For Embedded Model

Partial Recovery Option

Disaster Configuration- Oracle Data Guard- RMAN

New Installation Method

Database Synchronisation

Message Completion

LT Recovery

Duplicate Check

External Oracle Instance

Internal Schema

Potential DR Data Loss

Candidate features for 7.0

Other Functional Evolution

57

FileActRMA Message

QueryService

Audit trail

SOAP support

MQ support

RMA filtering

FTA with RMA

Web Services

Message Search

Message Details

Live and Archive

RMA beyond FIN

Candidate features for 7.0

58

Alliance ConnectVPN box migration until end 2011

59

Alliance Connect Overview

60

ALLIANCECONNECTBRONZE

ALLIANCECONNECTGOLD

ALLIANCECONNECTSILVER

Upgrade Scenarios

STANDARD SCENARIOSANY OTHER UPGRADE TYPE. E.g.:

NON-STANDARD SCENARIOS

ALLIANCECONNECTBRONZE

DIAL-UP

ALLIANCECONNECTSILVER

DUAL-ISINGLE-P[SINGLE-I]

ALLIANCECONNECT

GOLDDUAL-P

Upgrade Scenarios Description

61

UPGRADE SCENARIO

DESCRIPTION

Order your Alliance Connect product through an “Upgrade” form where your configuration data is automatically pre-filled in.No need to fill in a “termination” form for your old connectivity set-up.UPGRADE REBATE: USD 1,650.

1. Order your Alliance Connect product through a “new connection” form.

2. Terminate your old connectivity set-up though a “termination” form.UPGRADE REBATE : USD 1,650.

STANDARDSCENARIOS

NON-STANDARDSCENARIOS

E.g. Silver or Gold [USD] One-Time Monthly

Set of 3 VPN boxes 2,425 15

Upgrade Rebate -1,650 -Net Amount 775 15

E.g. Bronze [USD] One-Time Monthly

Set of 2 VPN boxes 1,650 10

Upgrade Rebate -1,650 -Net Amount 0 10

62

Alliance Connect Documentation

MATERIAL BRONZE SILVER GOLD

SWIFT.COM PAGES FACTSHEETS SERVICE DESCRIPTION IMPLEMENTATION GUIDE

QUICK INSTALLATION GUIDE [DHCP]

[NON-DHCP]

ALLIANCE CONNECT UPGRADE GUIDE

NETWORK ACCESS CONTROL GUIDE

CONNECTIVITY PACKS

PRICING (PART C > ALLIANCE CONNECT)

MX based Solutions

64

What is driving the move to ISO 20022?

• New initiatives– Global harmonisation– Giovannini and SEPA in Europe– Market infrastructures– Automation in the ‘funds’ market

• New players– Corporates, fund managers

• New technology– XML, SOA, web services

65

ISO 20022 messages

Payments, Cash and Trade

• Payments and Cash– Payments Initiation (4)– Payments Clearing and Settlement (6)– Payments Exceptions & Investigations (17)– B-to-C Cash Management (3)

• Trade – Trade Services Utility (50)– Invoice Financing Request (3)

Securities, FX and Derivatives

• Investment Funds– Securities Trade (30) and Settlement (16)– Reference Data (3) and Acct Mgmt (5)– Securities Management (7)– Cash Forecast (6)

• Other Securities– Securities Transaction Regulatory Reporting (4)– Proxy Voting (8)– Issuers’ Agents Communication (22)

• Foreign exchange and OTC Derivatives– Non-Deliverable Forwards (7)– Currency Options (4)– Generic (4)

83 messages 116 messages

199 completed messages

66

Overall coexistence framework

1. Prepare MX 2 . Introduce MX 3. Implement MX

MTMX

MT/MX

Decision to build/use MX

MX live on SWIFT

MT removal

MXMT

Milestones, dates and length of phase to be determined by each MT or MT group, governed by users

Decisions by Standards Committee (STC) and business committees (BPC and SSC)

Busine

ss c

ase

and

ratio

nale

MX

deve

lopm

ent

and

pilo

ting

Coex

iste

nce

supp

ort +

tool

s

67

Current timeline and milestones forExceptions & investigations

1. Prepare MX 2 . Introduce MX 3. Implement MX

MTMX

MT/MX

Busine

ss c

ase

and

ratio

nale

MX

deve

lopm

ent

and

pilo

ting

Coex

iste

nce

supp

ort +

too

ls

MXMT

E&I steering group to finalise adoption/migration plan by

‘corridor’ MT messages are removed (MT

192/292, 195/295, 196/296)

2006 MX messages go live

End 2009 End 2012

End 2010

25 live users 15% of current FIN E&I eligible

traffic migrated

End 2011

30% of current FIN E&I eligible traffic

migrated

Milestone 1

Milestone 2

Milestone 3

68

*

SWIFT for Exceptions & Investigations

DebtorCorporate

FirstAgentFinancial Institution

FinalAgentFinancial Institution

CreditorCorporate

1. RequestToCancelPayment

2. RequestToCancelPayment

3. NotificationOfAssignment 4. DebitAuthorisationRequest

5. NotificationOfAssignment

6. NotificationOfAssignment 7. DebitAuthorisationResponse

8.ResolutionOfInvestigation

9. ResolutionOfInvestigation

• Highly manual enquiries management Multiplier of the overall payments costIncreasing operational, financial and reputational riskImpacting customer satisfaction

• Issues to be resolved at an industry level• Lack of adopted industry standards (MT195/ 196/ 295/ 296/ 192/ 292 are marginally

used as they do not cater for the business needs)• Lack of rules and business practice

• ER 937 in 2004

E&I provides an E2E business & communication protocol

69

Benefit area Industry benefits

Cost reduction

• Automation: Up to 60% of enquiries – reduce 35% of staffcosts (*) with re-usability for different payment’s types

• Increased productivity• Reduce provider invoicing

Risk management

• FATF7/ SR7 – stricter compliance, XML granularity/ flexibility• Faster recovery after outages and disasters• Improved operational efficiency (Basel II - reducing enquiry

backlog)

Improved customer service

• Absorb additional volumes while maintaining service level• Development of on-line services• Enquiries transparency• Overall faster and more accurate resolution of cases

(automation of cases and concentration of liability cases)

Exceptions and Investigations (E&I) : industry business case

(*) for MT103/202 payments related enquiries

70

Adoption status – regional view

109 BICs:

77 Financial institutions

2 Corporate

1 ACH

Legend:

Early adopter

E&I adoption status

• Easy E&I-pilot: 3 European banks participate• Further articulated interest of banks• Systematic approach (traffic-profile of Easy E&I-pilots, address banks

with similar profile)• NordLB – software installed and live, change management-process

ongoing, tests with external correspondents next 2 months, live Q4)• BremenLB: same as NordLB• LBBW: tests: october / november, live november / december)• VTB: live, tests with Citi ongoing with interest from both to go live asap• Workshops with large players in other countries (how to design project)

SWIFTNet E&I Rollout-Activities in Europe

Implementation models

73

Manual Manual message creation, enrichment and workflow management through a messaging application o No case management capabilityo No back-office integration

Semi-automated Stand-alone case management application Off-the-shelf functionality (message creation, allocation, workflow management, audit trail)o No integration with back-office applications

Automated

Integration with business application

Case management application integrated with one or more application (e.g. payments or reconciliation)

Integration through an Enterprise Application

Integration solution (EAI)

EAI accesses different back-office systems

EAI includes case management application or links to existing case management application

Full integration through enterprise backbone

Case management application part of enterprise backbone

Backbone connecting to all kind of back-office systems (payments, email, fax,..)

Note: Remotely hosted solutions are offered as well but are not included in this overview

E&I solution providers supporting the different models

74

Manual

Semi-automated

AutomatedIntegration with business application Integration through an

EAI solutionFull integration

enterprise backbone

SN Messenger

Easy Exceptions and

Investigations

SWIFT Alliance Integrator

Easy Exceptions and Investigations

Easy E&I

Subscription to E&I Case management application Access to e-learning

End-to-end E&I solution

Cost effective

From “off the shelf” to “extended” version Integration with payment application Includes professional services

Very competitive price Self installable, GUI with workflow Runs in user or automated mode Handles FIN and XML standards Integrated with Alliance Access/Entry

Start now, upgrade later

Provided in release 1 by

“Extended” “Off the shelf”

Concept

76

SWIFT Alliance

Access/Entry

Case management application

Payments messages

Inquiry messages

(MT, XML)

Payment application

Easy Exceptions and InvestigationsPricing

SWIFT COMPONENTS PRICING

Registration to SWIFT for E&I service (one timefee per BIC)

2.000 EUR

SWIFTNet Messaging Interface SAA/SAE-> XML module

0 EUR

Electronic training on Exceptions and Investigations

0 EUR

High level ROI study (to be looked at….) 0 EUR

Expertus COMPONENTS

“One click install” license feeYearly maintenance fee

30.000 EUR 6.000 EUR

Fully documented installation/ user handbook (*)

Total cost 30.000 EUR (one time) 6.000 EUR (yearly)

Off the shelf

Workers Remittances

79

Market overview

Market:• International migrants 200 million• Financial flows USD 400 billion• Industry revenue USD 15 billion• Annual transactions 1 to 1.5 billion• Average transaction value +/- USD 300

A remittance is a cross-border, person-to-person payment of relatively low value.

80

Issues and options for Bank service delivery

1. Build a proprietary network

2. Build a bilateral service with a correspondent

3. Use open correspondent banking arrangements

Costly

Lacks scale

Poor service

Options:

Issues:

1. Open correspondent arrangements do not deliver price and time transparency for consumers

2. Processing is inefficient and costly for banks

81

Workers’ remittances objectives

• Deliver a robust end-customer value proposition– time transparency– price transparency– ease of use

• Bring scalability to bilateral bank services

• Support any type of retail payment product

• Remain commercially and brand neutral

Service framework fit in the person-to-person payments ecosystem

83

Debtor CreditorAgentAgent ParticipantParticipant

Settlement Agent

Bilateral ContractBilateral Service Level Template

Market PracticesService Levels, Product Groups, Charges & FX Practices

Reference DataParticipant and Agent Capabilities and Points of Service

Messaging StandardsInstruction, Reject, Return & Status

Messaging ServicesFileAct Strore & Forward 6.1

84

Market Practice Rulebook

- Participants- Participants’ Agents

- Service levels (instant, urgent, non-urgent)- Two product groups (account & cash disbursement)- Transaction ID specification (sender defined)

- OUR (DEBT) charging default- FX guidelines- Reject/returns charging practices

- Definition of sorting, transmission etc.- Transmission timing relative to service level

- Gross bilateral settlement- Serial method recommended, but guidelines for Cover incl.- No restrictions on provider or currency choice

Participation

Products

Charging practice

Clearing

Settlement

85

Ref. data

FileAct S&FISO UNIFI 20022

Architecture

Rules + Guidelines

Settlement

sender beneficiary

Distribution network

sending countryDistribution network

Receiving country

CB CB

MT cover payment

High-level overview

End-to-end service level

86

Competitive pricing: EUR 0.03 to 0.08 txn

Payment instruction, reject, return

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Tier

Payment instruction, reject, return

- Per transaction pricing ranging from EUR 0.03 to 0.08

- Annual recurring fee of EUR 1,000 per participant

- 66% lower than equivalent FIN MT messaging

- More cost effective than proprietary solutions

1 not included in business case

87

Benefits

• Robust end-customer value proposition– time transparency– price transparency– ease of use

• Scalable bilateral bank services• Any type of retail payment

product supported

• Commercial and brand neutrality

Bring your services and your brands to your customers, efficiently!

32 service participants, 12 certified live

ABSA ZA

Banco Africano de Investimentos AO

Banco BHD S.A. DO

Banco BISA BO

Banco Bolivariano S.A. EC

Banco Davivienda ( Bancafé ) CO

Banco de Guayaquil EC

Banco del Austro S.A. EC

Banco do Brasil BR

Banco Nacional de Fomento EC

Banco Solidario EC

Banque Centrale Populaire-Maroc MA

China Construction Bank CN

Citigroup US

Citigroup UK

Codesarrollo EC

Financiera Cambiamos CO

FirstRand Bank Limited ZA

Giro y Finanzas CO

Habib Bank PK

ICBC CN

ICCREA IT

ICICI Bank Ltd IN

Ivobank UK

La Caixa ES

Macrofinanciera CO

Millennium BCP PT

Nedbank ZA

Russlavbank RU

Standard Bank of South Africa ZA

Standard Chartered HK

Wall Street Exchange Centre LLC AE

88

Key take-aways

89

Topic Impact

Traffic is declining, SWIFT compensates through Lean +

Take MT202 COV serious +++

SWIFT is looking for collaborative innovation (SWIFT2015)

+

Get prepared for Exceptions & Investigations ++

Get additional insight into your business with SWIFT Business Intelligence Solutions

++

Key take-aways (2)

90

Topic Impact

Connect your Corporate customers via SWIFT +

Alliance v6.3 eases your SWIFT infrastrucutre ++

Get additional revenue with Worker Remittances ++

SWIFT Training +

91

Thank you