A6 Corporate-to-Bank Integration - from the Fog to the Cloud - final · 2014-09-12 · Current landscape is foggy… EDIFACT PAYMUL Generic X509 v3 HTTPS ANSI X12 820 BAI2 ISO 20022

Corporate-to-Bank Integration: from the Fog to the Cloud

Citi Treasury and Trade Solutions | Channel and Enterprise Services

Dmitry Simakov EMEA Head of Client Connectivity and Information Citi Treasury and Trade Solutions [email protected]

61% 10%

29%

Trends illustrated Transaction volume and value Split by initiation channel, Citi, EMEA region

Growth of active clients Year on year (2014 v 2013) growth in active clients population at Citi, EMEA region

�1%

�53%

�14%

Online Banking Integrated File-based solution

Integrated Message-based solution

66%

33%

1%

Online Banking Integrated File-based solution

Integrated Message- based solution

Volume of initiated transactions

Overall $ value of initiated transactions

Current landscape is foggy…

EDIFACT PAYMUL Generic

X509 v3

HTTPS

ANSI X12 820

BAI2

ISO 20022 XML v2

FTP/S

Connect:Direct

PGP

SWIFT MT940

EDIFACT DIRDEB

SAP IDOC

AS2

ISO 20022 XML v3

PKI DES3 SHA1 &MD5

EDIFACT FINSTA

SFTP

BANSTA

EDIFACT PAYMUL CRG

BAI1

SWIFTNet FileAct

SAP MT940

TDCompress MT942

SMIME

VPN

The solution is…

Standardization

Security

File Formats Specifications and testing

Connectivity

?

Standardization of Connectivity •  SWIFT continues to be

the most popular choice of standardized bank-neutral connectivity

•  Some slowdown in adoption pace at around 2012 was recovered by the introduction of SWIFT Alliance Lite 2

•  Local bank-neutral networks, such as eBICS and CBI continue to be in use by local markets

SWIFT Corporate Access Registered Corporates

55 108

181 282

402

579

726

902

1035

1208

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Standardization of File Formats Share of file formats CitiConnect for Files processed transactions

ISO XML 54%

SAP IDOC 18%

EDIFACT 16%

Other 12%

EMEA ISO XML – 69%

ASIA ISO XML – 48%

LATAM ISO XML – 34%

North America ISO XML – 28%

•  Share of ISO XML based transactions now exceeds 50% of global transaction volumes processed by Citi’s integrated file channel

•  Adoption of ISO XML standard is global, not limited to Europe

•  The effort of Common Global Implementation (CGI) group help in further standardization of ISO XML messages

3SKey A multi-bank and multi-network personal digital identity solution

•  Main use cases: –  Digital signature for file-based communication –  Authentication for online banking applications

•  Over 25 banking groups subscribed

•  Over 30,000 tokens issued

Standardization of Security Mobile Technologies

•  Can we replace security devises all together with the mobile technologies? –  Dynamic password sent via SMS –  Apps to generate dynamic password or challenge/

response

Standardization of Specifications and Testing SWIFT MyStandards A collaborative web platform to better manager standards in the financial industry

•  Supports ISO 20022 XML and SWIFT MT messages, with ability to customize the schema for bank-specific requirements

•  Allows generating consistently looking and easily comparable formatting guidelines for all participating banks

•  Over 35 banking groups and vendors subscribed

Now with Readiness Portal Testing in the cloud for faster customer onboarding

•  Readiness Portal allows to test ISO XML or SWIFT MT messages against the specifications published by a bank in a consistent bank-neutral user interface

Standardization of Integration

Lift the fog, move to the

Cloud

Combine all streams of standardization in one cloud-based solution

Introducing SAP Financial Services Network (FSN)

Corporations Banks

Pro

cess

ing

Sys

tem

s

Con

nect

or

ER

P C

onne

ctor

ER

P

Direct

Networks

Platform Services

SAP Private Cloud

SAP Financial Services Network

Pay

men

ts

Sta

tem

ents

Rem

ittan

ce

Cre

dit C

ards

Mon

itorin

g &

Ale

rting

Oth

er S

ervi

ces

Business Cockpit

TMS

Middleware or

FTP Server

SAP® Financial Services Network is an innovative cloud-based network that offers a single connection point across multiple services, businesses, and financial institutions.

SAP FSN – the benefits Benefits for Corporates •  Multi-bank, reduced counter-party risk

•  Low IT costs – FSN connectivity built into ERP

•  Real-time transactions and visibility

•  Future-proof solution

•  Better working capital and liquidity management

Benefits for Bank •  Rapid adoption across corporate base

•  Streamlined and accelerated implementation

•  Lower operating and client acquisition costs

•  Positive client relationships through value-add apps

•  Future-proof solution

•  Ease of complying with regulatory / market changes

Key Features •  Ready connection between Corporates and their

Banks for interchange of messages related to financial services – including payments, payment status, and statements

•  Cloud-based file format transformation the integration with multiple business partners without on-site hardware or custom development

•  Security from the Ground Up - Multi-tenant architecture isolates each bank and corporate from all others

•  Pay-as-you-go subscription model

•  Scalable network can deliver existing services while supporting the development and deployment of new ones

SAP FSN - idea shaped by co-innovation The foundation

•  First public announcement of Financial Services Network solution 19th April 2012 with Citi and Royal Bank of Scotland

•  In October 2012 another 5 banks announced support of the FSN

•  Co-innovation program under way with more Banks, Non-Bank Financial Institutions and Corporates

Collaboration of Citi and SAP

•  SAP FSN solution to take advantage of Citi's market leading global footprint of 90+ countries with ISO 20022 XML

•  Citi worked with SAP on building a Client On-boarding and Support model

•  In collaboration with the SAP FSN team, Citi has identified key industry trends in regards to connectivity and security protocols

SAP FSN – Citi experience The milestones achieved

▲  Completed all connectivity and processing development

▲  Full testing complete in all 3 environments: –  UAT (User Acceptance Testing) –  CTE (Client Test Environment) –  Production

▲  Citi is fully integrated with SAP Financial Services Network and is ready to support upcoming pilot clients

Pilot

▲  Multiple clients engaged in pilot: –  Multi-national corporations –  Active in 20+ countries –  Working with 5+ banking partners

▲  Pilots clients expected to go live this year

Summary

The Financial Services Network emerges as strategic initiative for the banks and service providers to establish closer relationships with corporate customers

The industry strives to satisfy the demand and address the challenges of corporate-to-bank integration through standardization

Together we can make the difference, lift the fog and elevate the corporate-to-bank integration to the next level