Corporate Access to SWIFT Stephan Kraft, Senior Account Director, SWIFT.

Corporate Access to SWIFT

Stephan Kraft,

Senior Account Director, SWIFT

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Agenda

• What is SWIFT?• What's in it for a corporate?• How to connect and what do you pay?• What need banks to do to get ready?• Case studies?

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Agenda

• What is SWIFT?• What's in it for a corporate?• How to connect and what do you pay?• What need banks to do to get ready?• Case studies?

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What is SWIFT?

Aco-operativeorganisationserving the

financialindustry

Aprovider of

highly securefinancial

messagingservices

Thefinancial

standardisationbody

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Country Coverage• 4 billion messages/year• 9.761 customers• 209 countries• 19 Mio messages peak day

(Feb2011)

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Agenda

• What is SWIFT?• What's in it for a corporate?• How to connect and what do you pay?• What need banks to do to get ready?• Case studies?

What corporates say on SWIFT value

“… reach all our banks directly, with the highest security”

Head of Treasury Control and Reporting, Novartis

“… achieve all objectives of our treasury centralization

project”

Head of Treasury and Risk Management, Iberia

“… run a central platform with a single standard for every country

and every bank”

VP Finance & Treasury, T-Mobile International

“… build one central ‘source of truth’ for banking data”

Group Manager, Treasury, Microsoft

“We took SWIFT

to …

“… have a standard and reliable process with all our banks”

Group Treasury, Petronas

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Sub heading if required

Corporate Treasury Drivers

AutomationStandardisationCentralisation

COSTS• FTE• Infrastructure

RISK•Operational•Security

COMPLIANCE• Regulators (SOX, SEPA)• Internal controls

LIQUIDITY MANAGEMENT

• Where is my cash?

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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

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

Accountspayable

Accountsreceivable

Treasury

Other

CORPHUHBM

idd

lew

are

SWIFTNet

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SWIFTNet messaging services offering

InterAct:Real-time or S&F messaging for query / response and transaction input

Browse: Online information visualisation

FileAct:Real-time or S&F file transfer forstructured or free format files

FIN:Store & Forward messaging(e.g. MT101, MT940)

Banking servicesCash Management

High value/urgent payments and reporting

High value payments are carried over FIN, using MT101 (Request for Transfer) and reporting on transactions or on cash positions can be done using MT942 (Interim Transaction Report) or the end of day MT940 (Customer Statement)

Low value/non urgent payments and reporting

Low value payments are typically bulked and are carried in files using FileAct. Reporting on such payments can also be done over FileAct as well as disbursement files, check files …

Payments files (e.g. ISO 20022, EDIFACT)

Reporting files (e.g. ISO 20022, EDIFACT)

Banking servicesTreasury Management

Liquidity Management

Liquidity Management (e.g. pooling of account) involves payments which are urgent and of high value. Such payments are carried over FIN using the MT101 (Request for Transfer)

Financial Risk Management

Foreign exchange deals (e.g. spots, forwards) are confirmed with MT300 (FX confirmation), for money market deals, use the MT 320 (Fixed Load/Deposit Confirmation)

Banking servicesTrade Finance

Import Letter of Credit

Applicant can use the MT 798 (Trade Envelope) over FIN to apply for a L/C, Guarantees and Standby Letters or amend information. Bank can advise applicant about the issuance or amendment of a L/C

Export Letter of Credit

For export L/C, as the advising bank to the beneficiary you can offer FIN to exchange trade data using the MT 798 (Trade Envelope)

Electronic bank account management (eBAM)

Fax

Paper

Yesterday

• Slow • Low integration

• Expensive • Low satisfaction

Today

• Faster/cheaper• Standardised

• Dematerialised• Automated

• Scope: account opening, maintenance, closing + reporting on account features (e.g. auditor requests).

• Key benefits: time and cost savings from improved control, reduced errors and increased STP; improved customer satisfaction (for banks)

• Timeline: SWIFT solution and ISO 20022 since end 2009

XML messagesSupporting documents

1st presentation - date 16

Exceptions and investigations

Reconciliation SettlementPaymentinitiation

PaymentProcessing

Beneficiary claims non receipt

Cannot apply payment

Missing information on Beneficiary

• Scope: modification/cancellation, claim non receipt, unable to apply • Key components: ISO 20022 standards on InterAct• Key benefits: reduced enquiry cost, improved STP, faster reconciliation,

improved treasury management

Exceptions & Investigations

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Homogenous authentication beyond SWIFT channel – 3SKey solution

• No uniform mechanism• Different system per bank• Costly & difficult to maintain

ALL BANKS

• Multi-Bank• Multi-Application• Multi-Network• Multi-Country

The 3SKey solution in detail

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John

John = 45678 John = 45678

3 4

Token associated (registered) with several banks

(3) (4)

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User activates the token on 3SKey portal(2)

Operates PKI and portal, issues certificates

Activates token, associates with bank, signs

Distributes token, associates user, verifies signatures

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CRLcheckToken used to sign messages – bank

verifies signature and revocation status(5)(6)

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(1a+b)

1a

1a

Corporate user obtains an inactive token from a bank

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Agenda

• What is SWIFT?• What's in it for a corporate?• How to connect and what do you pay?• What need banks to do to get ready?• Case studies?

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SWIFTConnecting the financial community

Banks (Founding - 1973)

IMI's (1992)

MA-CUG (2001)

Insurance IMI's (2001)

Governmentinstitutions

(2001)

Trustees(1990)

Broker-dealers (1987)

Paymentsystems (1987)

Clearing &Settlementsystems (1987)

Depositories (1987)Securities MI's

(2000)Treasury

Counterparties (1998)

Payments MI's(1998)

SCORE (2007)

Stock Exchanges (1987)

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Alliance LiteSWIFTNet connectivity infrastructure owned and operated by SWIFT

Apps

SWIFTNet

Users

Internet

Private infrastructureSWIFTNet connectivity infrastructure owned and operated by the customer

Apps

SWIFTNet

Users

VPN

Shared infrastructureSWIFTNet connectivity infrastructure owned and operated by third party

Apps

SWIFTNet

Users Service Bureau

VPN

How to connect to SWIFTNet? Overview of Options

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Infrastructure: • SWIFT Entry Kit (One-time 22.000 EUR, recurring 10.200 EUR/year)

Registration Fees:• 1,250 EUR for BIC• 2.000 EUR for SWIFT Closed User Groups

MA-

Traffic:- FIN: between 0.0432 (reporting) and 0.184 EUR (international, non-reporting) per chargeable unit

§ File Transfer: max. 0.001 EUR per payment

§ minimum traffic fee = 166 EUR / month

Private infrastructureSWIFTNet connectivity infrastructure owned and operated by the customer

Apps

SWIFTNet

Users

VPN

How to connect to SWIFTNet? 1) Private Infrastructure

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Shared infrastructureSWIFTNet connectivity infrastructure owned and operated by third party

Apps

SWIFTNet

Users Service Bureau

VPN

VPN

How to connect to SWIFTNet?2) Shared Infrastructure (via Service Bureau)

Infrastructure: • SWIFT Essential Kit (One-time 1.275 EUR, recurring 2.800 EUR/year)• Costs for 3rd party connectivity

Registration Fees:• 1,250 EUR for BIC• 2.000 EUR for SWIFT Closed User Groups MA• -

Traffic:- FIN: between 0.0432 (reporting) and 0.184 EUR (international, non-reporting) per chargeable unit§ File Transfer: max. 0.001 EUR per payment § minimum traffic fee = 166 EUR / month

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VPNAlliance LiteSWIFTNet connectivity infrastructure owned and operated by SWIFT

Apps

SWIFTNet

Users

Internet

• Infrastructure, Registration and Traffic combined

• 2 available Pricing models:– Flat fee: 850 EUR/month (including 4000 msg.*/month sent & received)

1 EUR/additional message– Pay as you go: 200 EUR/month

1 EUR/message

* 1 message = 1 FIN MT or 1 FileAct chunk of 100 Kb

How to connect to SWIFTNet?3) Alliance Lite

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Agenda

• What is SWIFT?• What's in it for a corporate?• How to connect and what do you pay?• What need banks to do to get ready?• Case studies?

Bank Readiness - Internal

• Bank Operational Readiness Guide:

http://www.swift.com/corporates/resources/Getting_Started/SW4CORP_Bank_Operational_Readiness_Guide_20090701_v2.3.pdf

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Bank Readiness Certification Programme

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Agenda

• What is SWIFT?• What's in it for a corporate?• How to connect and what do you pay?• What need banks to do to get ready?• Case studies?

Making your business case

Costs

Operational benefits

Project typically paid back 2 x

by operational benefits ?

Additional benefits

Better security, more control, …

difficult to quantify but can

be key driver

Business

case

Financialbenefits

Business Case:SWIFT can support

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SAMPLE!!!

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Corporates on SWIFTWhere do we stand today ?

2008 2009 2010 Q1 2011

402

579

726779

# registered corporate entities Geographical split

EMEA

Americas

72%

18%

Asia Pacific

10%

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# Mbytes exchanged over FileAct (live and pilot)

Sent by corporates

Received by corporates

Annual growth 75%

8,774 8,580 8,93610,609

14,046

6,530 8,2259,548

10,557

12,717

Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10

21,166

26,763

+ 26%

15,304

+ 14,5%

+ 10%16,905 + 9%

18,484

20101005CAGmeeting_v4.pptx

Breakdown by region and annual revenues

unknown <500K 500K-1B 1-10B >10B

020406080

100120140

A/P

AME

EMEA

Revenue (in EUR)

500M-1B<500M

20101005CAGmeeting_v4.pptx

Corporates on SWIFTBreakdown by industry sector*

Others

Industrial Transportation

Pharmaceuticals & Biotech

General Industrials

Food Producers

Oil & Gas Producers

Software and Computer Services

Support Services

Automobile and parts

General financial services

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160

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37 industry sectors

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Connected subsidiaries are counted individually

306

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(*) Using the Industry Classification Benchmark (ICB)

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40

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German corporates connected to SWIFT

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Austrian corporates on SWIFT

http://www.swift.com/corporates

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Your Contacts

Judit BaracsCountry Manager Hungary

SWIFTFischhof 3/6A-1010 ViennaAustria

+43 1 740 40 2373+43 1 740 40 2379+43 664 636 [email protected]

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Stephan KraftCorporate Access Specialist

SWIFTFischhof 3/6A-1010 ViennaAustria

+43 1 740 40 2374+43 1 740 40 2379+43 664 636 [email protected]

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