Sibos 2009: An overview

Sibos 2009: An overview Collaboration and innovation dominate this year’s critical dialogue

In unprecedented economic conditions, Sibos continues to deliver unique value • The world’s premier financial services event took place in Hong Kong from 14 to 18 September 2009 • Almost exactly one year from the collapse of Lehman Brothers, Sibos participants gathered to network, debate and do business. • Sibos 2009 was the biggest ever in Asia: • 5,782 participants • 42% of whom were from Asia • 176 exhibiting firms • 173 journalists • 117 of whom were from Asia, • representing more than 30 Asia-based titles

Collaboration and innovation dominated the dialogue Regulation, trust, living wills, casino banking and SEPA were hotly debated Payment market infrastructures Islamic finance Living will MT/MX Asia Corporate treasurer SWIFTReady Innovation Carbon trading Euro centric China focus Central Asia Corporates Trade and supply chain Focus Corporate actions Collaboration Casino banking Payments innovation Regulation Trust Information Community ISO20022 SWIFT Government ownership Outlook Japan Governance Partnerships Counterparty risk Standards SEPA The future Workers' remittances Cost efficiencies Globalisation Web 2.0 Liquidity risk

On innovation, Sibos said… “We won't stop taking risks, it's what we're paid for. If we don't do it we won't stay in business.” - Andrew Long, HSBC “We have to work together on new efficient solutions, otherwise we will not be competitive. Pricing in transaction banking is not going up.” - Werner Steinmuller, Deutsche Bank “There is now a trend towards greater innovation in financial products and instruments, but there is still lots of room for development.” - Ping Lian, Bank of Communications “Liquid carbon… is not a commodity but an innovative new financial accommodation product…” - Graham Cox, Deutsche Bank “For supply chain. Innovation is going to be the key.Look at Dell.” - John Ahearn, Citi

On the future of banking, Sibos said… “The line between regulators regulating, board of directors governing and management managing is getting very blurred.” - Mike Bodson, DTCC “Despite rebounding stock markets and unprecedented levels of government intervention, the world’s financial and economic infrastructures remain under a cloud of uncertainty.” - Martin Wolf, Financial Times “The Payment Services Directive is a European initiative, but individual countries are allowed different laws and interpretations. A European or even a global regulator would help us to standardise and save a lot of money.” - Werner Steinmueller, Deutsche Bank “The mood is much more bearish than I had anticipated… there are going to be a myriad of unintended consequences as a result of the financial crisis.” - Suzanne Duncan, IBM “My concern is that regulation will be increased, driven by politics and emotion. Don’t be afraid to talk to regulators.” - Andrew Long, HSBC “Too big to fail is a false debate. This issue is governance. Do you have people who understand risk in financial services.” - Dr Rannee Jayamaha, Central Bank of Sri Lanka “Banks need to show a resolute and united front to prevent an increase in protectionism.” - Catherine Bessant, Bank of America

On globalisation, Sibos said… “With their large balance sheets, Chinese banks pose a threat to us if they move out of their markets.” - Andrew Long, HSBC “There is a lot that the West can learn from the East, and maybe it’s time that the western egos were put aside to allow us to learn some of the lessons from the East.” - Leigh Daniel, Strate “China will embrace financial innovation to drive consumer spending to the levels needed to maintain its recent period of outstanding economic growth.” - Huiman Yi, ICBC “The mood is much more bearish than I had anticipated… there are going to be a myriad of unintended consequences as a result of the financial crisis.” - Suzanne Duncan, IBM “The gentleman from ICBC mentioned that if you were to move 1% of the population from rural to urban areas, it would have a massive effect on consumption in China…When someone from China says this you have a feeling they may actually do it.” - Monica Steward, GlobeTax "The crisis showed that none of us can 'de-couple' from the global economy. Prospects for Asia are good.” - John Ahearn, Citi

On our responsibilities, Sibos said… “Mainly they [independent prime brokers] were too busy saving themselves to care much about clients.” - Juan Carlos Nieto, Index Intelligence “We owe it to our customers to rebuild trust.” - Kah Chye Tan, Standard Chartered “What was said about co-operation between banks was the most important fact that I will bring home and think about. Fantastic!” - Anna-Maria Dandenell Gibelio, HCDC-B Handelsbanken “Other key principles of Islamic finance are that we should not speculate, and that there should be certainty in our financial arrangements.”- Mohammed Paracha, Al Salam “Competitors… sharing infrastructure for the sake of customers, this is the balance we have to think about.” - Rodrigo Caramez, HSBC Brazil “Lack of transparency has been known as the cause of the current crisis.” - Atsushi Saito, Tokyo Stock Exchange

Who was at Sibos 2009?

Sibos 2009 was the biggest ever in Asia 2004 Atlanta 2005 Copenhagen 2006 Sydney 2007 Boston 2008 Vienna 2009 Hong Kong

Who came?The 5,782 participants by region 45% 13% 42% Americas EMEA Asia Pacific

Who came? By market By type of institution Payments 33 % Securities 16 % Cash management 21 % Trade services 16 % FX/MM 3 % Derivatives 2% Commercial bank 36 % Software supplier/Consultancy 25 % Investment bank 5 % Payments Market Infrastructure 4 % Central Bank 5 % Corporate 7 % Securities Market Infrastructure 3 % Custodian 3 % Broker/dealer 2 % Exchange 1 %

Who came?The 5,782 participants by job function MD / Director / EVP 24 % Departmental manager 15% VP / Functional Head 14 % Account manager 15 % Section Head / Supervisor 8 % Board member / CEO 7 % Analyst / consultant 7 %

The conference Sibos highlights 2008 _final – October 2008 – Confidentiality: Public

The conference at a glance155 speakers in 100 sessions • Sibos one year on: Leading through uncertainty • SWIFT plenary • The Asian century: Implications for the financial industry • Will transaction banking be the engine for sustainable growth? • Closing plenary Plenaries • Risk: Will we ever lean? • Do we really need global market redesign? • Can we afford the future? • Asia focus • Outlook India • Outlook China • Time for Asia to save itself? • Central Asia • Outlook Japan • ASEAN integration • Payments • SEPA • Workers’ remittances • Islamic finance • System convergence • Market harmonisation • Payments innovation • Securities • Central counterparties • Securities financing and liquidity • Prime brokerage • Funds distribution • Carbon trading • Corporate actions • Corporates • Challengers and opportunities for the corporate treasurer • Corporate requirements for collaborative bank solutions • Trade • Will the shortage of trade credit reverse globalisation? • Financing the supply chain in Asia0 Main conference sessions • FX • Do relationships matter? • Standards • Now more than ever Innotribe at Sibos Securities Market Infrastructure Forum Forum for Corporates Forums and streams Standards Forum Exporta@Sibos

The conference at a glance • Sibos one year on: Leading through uncertainty • SWIFT plenary • The Asian century: Implications for the financial industry • Will transaction banking be the engine for sustainable growth? • Closing plenary Plenaries • Risk: Will we ever lean? • Do we really need global market redesign? • Can we afford the future? • Asia focus • Outlook India • Outlook China • Time for Asia to save itself? • Central Asia • Outlook Japan • ASEAN integration • Payments • SEPA • Workers’ remittances • Islamic finance • System convergence • Market harmonisation • Payments innovation • Securities • Central counterparties • Securities financing and liquidity • Prime brokerage • Funds distribution • Carbon trading • Corporate actions • Corporates • Challengers and opportunities for the corporate treasurer • Corporate requirements for collaborative bank solutions • Trade • Will the shortage of trade credit reverse globalisation? • Financing the supply chain in Asia0 Main conference sessions • FX • Do relationships matter? • Standards • Now more than ever Innotribe at Sibos Securities Market Infrastructure Forum Forum for Corporates Forums and streams Standards Forum Exporta@Sibos

Plenaries: SWIFT plenaryIncreasing efficiency, mitigating risk and putting the customer first • SWIFT’s financials remain sound andits commitment to reduce overall pricesby 50% by 2011 stands • The crisis has heightened awarenessof risk and SWIFT is ready to play amitigating role in this regard: reducing operational risk but also counterparty, settlement and liquidity risk • SWIFT is increasing its operationalefficiency while embracing innovation,collaboration and a ‘customer first’mindset • Broad and deep consultation isunderway with SWIFT customers aboutSWIFT2015, its five year strategy “If we are to grow beyond messaging, we have to change now.” – Lázaro Campos, CEO, SWIFT “We need to think broadly and deeply about future opportunities and decide either to do them well or not do them at all.” – Yawar Shah, chairman, SWIFT

Plenaries: Big issue 1Sibos one year on: Leading through uncertainty • Despite rebounding stock markets andunprecedented levels of governmentintervention, the world’s financial andeconomic infrastructures remain undera cloud of uncertainty • Concept of a ‘living will’ has merit ofreducing complexity • Asia will become more like westerneconomies over time but this will nothappen overnight • Mood was more bearish than expected “Financial systems should not have a life of their own” – Joseph Yam, CEO, Hong Kong Monetary Authority “Yes there are some green shoots, but what’s being used to fertilise them?” – William White, OECD “I know of no other industry with more conflicts of interest than investment banking.” – Ronnie Chan, Hang Lung Properties “We should move to regulating activities regardless of the institutions they are in.” – Peter Sands, CEO, Standard Chartered

Plenaries: Big issue 2The Asian century • Banks that do not establish a crediblepresence in Asia risk becomingmarginal players in the Asian century • Financial innovation must be harnessedto drive Asian consumer spending • Regulators need to be sensitive to theneeds of the market “Regulatory guidelines should not kill the industry, rather they should prevent bubbles that could cause problems.” – RaneeJayamaha, adviser to the president of Sri Lanka “Banks have to meet those [changing] customers’ financial needs, but we should not forget the lessons learned from the financial crisis.”– Tetsuya Kubo, senior managing director, Sumitomo Mitsui Bank “If we cannot boost consumer demand, the sustainability of growth will be checked.” – Huiman Yi, vice president, Industrial and Commercial Bank of China “If you do not have a footprint in Asia, or at least some kind of anchor, you will become an irrelevant institution within 10 years.”- Dominic Barton, worldwide managing director, McKinsey & Company

Plenaries: Big issue 3Will transaction banking be the engine for sustainable growth? • Banks must confront regulatorybacklash • They need to engender a greaterunderstanding of transaction bankingamong regulators • Collaborative solutions are needed totackle regulatory and cost pressures “With a banking license and regulators in 104 countries, the reality is that just to switch the lights on, we have to constantly upgrade our platforms and adapt to changes in regulation so that we can continue to serve our clients.” – Francesco Vannid’Archirafi, CEO, global transaction services, Citi “We have to work together on new efficient solutions, otherwise we will not be competitive.” – Werner Steinmueller, head of global transaction banking, Deutsche Bank “Banks need to show a resolute and united front to prevent an increase in protectionism.” – Catherine Bessant, president, corporate banking, Bank of America “My concern is that regulation will be increased, driven by politics and emotion.” – Andrew Long, head of global transaction banking, HSBC

Plenaries: Closing53 weeks since ‘Lehman Brothers Monday’ • Engage with each other, engage with customers and engage with regulators to find common solutions • True innovation is not a 10-15% improvement but something that makes things 10 to 15 times better • Innovation prize awarded to digital safety deposit box idea generated during Innotribe at Sibos “The regulatory process will take time. That’s why there must be an effort by the community itself to advance critical dialogue.”– Stephan Zimmerman, COO, UBS “In the 19th century, none of the ice factories became refrigeration manufacturers, because too many firms define themselves in terms of what they do now.” – Guy Kawasaki, Founding Partner, Garage Technology Ventures “This week we heard a loud cry: engage with the regulators!” – Lázaro Campos, CEO, SWIFT

Main conference sessions: cross-market “There has been a sea-change in how institutional investors look at their risks.” – Tom Isaac, managing director, global transaction services, Citi • Market infrastructures proved themselves in the recent crisis – the risks lie elsewhere • Conference split on whether global market redesign is called for • Profits of the past were based on the under-pricing of risk and inadequate capital provision • The pain of the current crisis won’t last forever, but restructuring is compulsory to achieve sustainable profits “We should raise the bar. If the infrastructures had failed, the problem would have been unmanageable.” – Pierre Francotte, CEO, Euroclear “The real question for us is: can we get back to the profits of the past, or are we moving towards a new normal?” – Shanker Ramamurthy, global managing partner, banking & financial markets, IBM “The lesson of the Asian crisis is that we’re only just beginning. We’ve gone through the mess and the panic; now it’s time to calm down and restructure.” – Karen Fawcett, group head of transaction banking, Standard Chartered Bank

Main conference sessions: focus on Asia “It’s time for India to be more relaxed over the participation of foreign international investors to allow the country to benefit from greater capital flows and, more importantly, new investment practices.” – James Shapiro, head of market development, Bombay Stock Exchange • India growth is on a par with China, but there is still work to be done before its ambitious goals can be realised • G20 may name and shame Asian markets that do not conform with new financial market regulations • The dominance of the retail segment in China is limiting opportunities for wholesale financial services • China’s renminbi trade settlement pilot scheme is a crucial step towards internationalisation of the currency • Japan’s government and regulators must do more to embrace global trends “G20 will want each jurisdiction to move to whatever they agree the global standard is.” – Martin Wheatley, chief executive officer, Hong Kong’s Securities and Futures Commission “China is mainly focused on equities, and would benefit from a debt market and simple instruments like short-selling.” – Cao Yuan Zheng, director of the board and chief economist, BOC International Holding “We have shed our oriental self and are becoming more global. We hope that bringing this model into Japan will help stimulate its economy”- Minoru Shinohara, CEO, Nomura Asia Holdings

Main conference sessions: corporatesCrisis pushes treasury into the limelight • Managing risk within corporate treasury departments is now of concern to senior management • Three key challenges: drying up of funding; access to heading capability; and assessing counterparty risk. • Corporate connectivity to SWIFT continues to climb despite the economic downturn “The cost of access to hedging capacity to manage our financial risks has been a challenge.” – Dennis Tosh, global director of capital markets and risk management, Ford Motor Company “A precise, technical understanding of a client’s balance sheet, transaction flows, liquidity needs and cash flows allows you to pre-empt their requests.”- Lloyd O’Connor, managing director, treasury services, J.P. Morgan

Main conference sessions: FX • Innovation in FX needs to match client needs • The push to standardise FX products and have them centrally cleared and listed on exchanges, as a result of the crisis, could damage the relationship between prime brokers and their clients “Having technology that helps you bridge the gap between FX and payments, for instance, helps relieve traders of the stress of handling low-value items.” – Timothy Merrell, director, head of FX4Cash, GTB, Deutsche Bank “If we find we are getting pumped full of messages from a particular bank, we would simply take them off our lists.” – Ben Robson, head of FX Asia Pacific, MF Global

Main conference sessions: payments “If you’re going to take a domestic flight, you take a domestic airline…An end-date would ground those domestic airlines.” – Gianfranco Tabasso, chairman of the EACT Payment Commission • SEPA is getting there but there’s much work to be done. A clear end-date is needed. • Central banks, regulators and settlement systems must pull together to lower remittance costs. The remittance business is all about relationships • With an asset pool of USD 1 billion, Islamic finance is compelling for ‘conventional’ banks • Systems convergence won’t happen without consensus – and it’s a long way off • Banks risk losing out to disruptive innovators as they struggle to create a single payments platform • Innovation in the payments space is playing catch-up rather than leading from the front “We are pooling the effort to make remittances cheaper and we want to exceed 5x5.” – Dave Mitchell, head of national payment systems development, South Africa Reserve Bank “Remitters are shopping around a lot more. They’re sensitive to fees as well as FX rates.” – Michael Bellacosa, managing director, treasury services, The Bank of New York Mellon “If you take Islamic principles and set them beside the principles that many banks hold to be true, you can potentially see a correlation between them.” – MukhtarHussain, deputy chairman, HSBC Bank Middle East – DIFC Branch

Main conference sessions: securities “Availability of liquidity is a matter of market confidence not financial analysis. – Greg Young, head of credit risk management and advisory in Asia, Goldman Sachs • Counterparty risk considerations will underlie the future direction of securities finance • Prime brokerage was a causality of the crisis but now opportunity beckons as more hedge funds look to spread the risk through multi-prime broker arrangements • Carbon trading to rival today’s hedge fund market by 2020: global standards and infrastructure required for stellar growth • In corporate actions, Asia sees opportunity where Europe and North America see only risk and obstacles “The balance of the relationship between prime brokers and hedge funds has changed irrevocably.” – John Callegari, managing director, global markets operations and middle office, Bank of America Merrill Lynch “Issuers and advisers are continuously innovating in ways that add complexity.” – Paul Bodart, executive vice president, asset servicing sector, The Bank of New York Mellon

Main conference sessions: standards “If we were starting from scratch, we’d develop a single standard – but we aren’t.” – Rick Leander, chief strategy officer, The Clearing House • While interoperability, not single dominance, seems set to define the new standards era globally, Asian markets are well placed to drive the region towards convergence.

Main conference sessions: trade “We owe it to our customers to rebuild trust.” – Kah Chye Tan, global head of trade finance, Standard Chartered • Shortage of trade finance could stall recovery • Banks and corporates must work together to avoid bottlenecks in the supply of credit to finance trade • The trade supply chain in Asia has been hit following the financial crisis, but confidence is starting to return “Talking to our clients, we found they were more worried about the default of overseas payments and finding banks to support them in trade finance.” – Justin Yue, CEO, Tradelink Electronic Commerce

Forums and streams: Innotribe at SibosEnabling collaborative innovation • Lively, interactive panels discussed: the economics of the cloud; the future of banking; and mash-ups • Three teams (40 people from 19 different organisations) worked on three ideas to pitch to a buyer’s panel: • U-View: a portal aggregating and displaying in real time all the financial data of an organisation bytapping into the systems of all the banks they have positions in. • T-Score: a trust certificate assembledby tapping into all existing data onlineor from an individual, including social networks. • And the winner, E-Me: a transaction based electronic safe to store valuable documents.Hosted by SWIFT and distributed by banks. “We will run with it.” – KostaPeric, head of innovation, SWIFT “Despite having only a few hours over four days to prepare, the winning pitch was better than 98% of the pitches we see at Garage Ventures.” – Guy Kawasaki, Founding Partner, Garage Technology Ventures Innotribe continues as a framework to generate ideas, collaborate on specific projects, and openly share innovation efforts Join us at www.innotribe.com

Forums and streams: Forum for Corporates • SWIFT has an important role in helping corporates and banks deal with the global financial crisis: corporates want better and faster visibility on their cash. • Most requested: visibility,resilience/security and scalability. • Make it easier for corporates to join, with particular attention to smaller corporates • Continue to expand the SWIFT for corporates offering: electronic bank account management and SWIFT’s new personal digital identity initiative both hot topics. • Suggestion that corporates should be more involved with the Trade Services Utility • Bank readiness should remain a high priority

Forums and streams: The Standards ForumWhere business and standardisation meet • ISO 20022 brings tangible benefits to the financial industry • SWIFT leads its community to facilitate progress around standardization and market practice • SWIFT makes it easier to implement standards The Standards Developer Kit • What is it? • A new set of tools and resources for standards implementers • Helps you implement standards • Leverages the technology you already have • Makes it cheaper and more efficient to implement MT and MX standards • What does it do? • Lowers implementation costs • Provides faster time to market • Reduces hand-coding • So the industry can: • Reduce duplicated effort • Adopt a common XML approach

Corporate social responsibility • Greening Sibos: Target Amsterdam 2010 • The International Polar Foundation is SWIFT’s partner • Greening Sibos workshop held during which partners and exhibitors shared ideas • Giving back to the community • One Laptop per Child exhibited with SWIFT’s help • SWIFT also supported a Hong Kong-based organisation that shares our values: the Changing Young Lives foundation that focuses on changing underprivileged children’s lives for the better received EUR 10,000 from SWIFT

Sibos – the exhibition Sibos highlights 2008 _final – October 2008 – Confidentiality: Public

Exhibition highlights • 176 companies exhibited at Sibos in Hong Kong • 98% of participants visited the exhibition • Conference brought into the exhibition area through extra-large screen • Two open theatres in exhibition area - 52 presentations of research papers, reports, case studies relevant to Sibos participants • Interest in exhibiting at Sibos 2010 in Amsterdam is high despite bearish market predictions

Communications & media coverage

Key SWIFT announcements at SibosFrom the Americas SWIFT, XBRL and DTCC combine to tackle one of the last bastions of manual processing: corporate actions Working with SWIFT, Citi has joined forces with Proctor & Gamble to jointly lead an American working group to improve the quality of cash reporting Bradesco, one of Brazil’s largest private banks to act as a wholesaler to corporates for Alliance Lite 38

Key SWIFT announcements at SibosFrom Asia Pacific Bank of Tokyo Mitsubishi UFJ, HSBC and Citi all sign MOUs with JASDEC to use SWIFTNet to connect to JASDEC’s pre-settlement matching system (PSMS) and book-entry transfer system (BETS) Corporate actions: Bombay Stock Exchange goes live with SWIFT’s Corporate Actions solution and Shenzhen Stock Exchange signs MOU Trade: KEB (Korea), CCB (China) and BTMU (Japan) to go live on exchanging trade documents over SWIFTNet, Tradelink Electronic Commerce, Bank of China (Hong Kong), Shing Kong Bank and Taishin Bank now registered for Trade Services Utility ICBC goes live with Bank of New York Mellon on Exceptions and Investigations 39

Key SWIFT announcements at SibosFrom EMEA Strate joins Link up Markets – South Africa CSD makes Link up Markets a truly global initiative NDC’s Alliance Lite deal to boost international standards in Russia – Market innovation aim to ease access and increase efficiency Angolan banks sign for Alliance Integrator and technical assessment – Broader cooperation envisaged with Lusophone countries in Africa BBVA to use SWIFT’s Alliance Integrator and FileAct messaging service 40

Sibos media partnersLead media partners

Sibos media partners

Coverage of Sibos and SWIFT in the independent press • A record 173 journalists attended • Asia Pacific: • Hong-Kong-based: 100 • China: 9 • Singapore: 7 • Australia: 1 • EMEA: 48 • Americas: 8 • Extensive coverage of Sibos and SWIFT • Sibos: 389 references on Google alone. Coverage of SWIFT but mainly vendor announcements made during Sibos. Tremendous visibility for the Sibos brand. • SWIFT: Good in-depth coverage of the SWIFT press briefing and the opening plenary, and pick up of TSU and XBRL new releases.

Coverage of Sibos and SWIFT in the independent press • American Banker (US) • Asian Banker (Hong Kong) • Asian Investor (Hong Kong) • Asia Risk (Hong Kong) • Bank Technology News online (UK) • Bank Systems & Technology Online (US) • Bobsguide • China Business Times (Hong Kong) • China Daily - Hong Kong Edition • CNBC online (Hong Kong) • Daily News at Sibos • Data reference Review • Dow Jones Financial Newswire • FinanceAsia online (Hong Kong) • Finextra.com (UK) • Financial News Online (UK) • Financial Times (FT.com) • Finet (web site) (Hong Kong) • Global Custodian Online (US) • Global Investment technology • Gtnews at Sibos 2009, Wednesday 16 (UK) • Hong Kong Economic Journal (3 articles) • International Finance News (Hong Kong) • MK Korea (web site) • Nihon KeizaiShimbun (Japan) • OnWindows.com (US) • PC Market (Hong Kong) • People.com.cn • Securities Industry News • Sing Pao Daily (Hong Kong)

Coverage of Sibos and SWIFT in the independent press • South China Morning Post (Hong Kong) • The Banker (online) • Trade Finance • Treasury today in China • Tmi (Treasury management international) • The Asset (Hong Kong) • The Asian Banker online • Wall Street & Technology Online Chinese language coverage • Shanghai Financial News, • International Finance News • China Business Times • Shanghai Securities Industry (online)

More • Sibos 2009 wrap-up reports, conference highlights, videos and speeches can be found on www.Sibos2009.com • The Sibos dialogue continues all year round on www.swiftcommunity.net

Sibos 2010 Amsterdam, 25-29 October Sibos 2009 Hong Kong, 14-18 September

Thank you

Sibos 2009: An overview