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
iddl
ewar
e
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
SWIFTNetUsers
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
SWIFTNetUsers 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
SWIFTNetUsers 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
SWIFTNetUsers
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 corporatesReceived by corporates
Annual growth 75%
8,774 8,580 8,936 10,60914,046
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/PAME
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
51
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
35
German corporates connected to SWIFT
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Austrian corporates on SWIFT
http://www.swift.com/corporates
37
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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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