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Corporate Access to SWIFT

Corporate Access to SWIFT. Stephan Kraft, Senior Account Director , SWIFT. 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?. Agenda. What is SWIFT? What's in it for a corporate?

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Corporate Access to SWIFT

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

  2. 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?

  3. 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?

  4. What is SWIFT? A co-operative organisation serving the financial industry A provider of highly secure financial messaging services The financial standardisation body

  5. 4 billion messages/year • 9.761 customers • 209 countries • 19 Mio messages peak day • (Feb2011) Country Coverage

  6. 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?

  7. What corporates say on SWIFT value “… run a central platform with a single standard for every country and every bank” VP Finance & Treasury, T-Mobile International “… achieve all objectives of our treasury centralization project” Head of Treasury and Risk Management, Iberia “We took SWIFT to … “… build one central ‘source of truth’ for banking data” Group Manager, Treasury, Microsoft “… have a standard and reliable process with all our banks”Group Treasury, Petronas “… reach all our banks directly, with the highest security” Head of Treasury Control and Reporting, Novartis

  8. Corporate Treasury Drivers COMPLIANCE Sub heading if required • Regulators (SOX, SEPA) • Internalcontrols Automation Standardisation Centralisation COSTS RISK • FTE • Infrastructure • Operational • Security LIQUIDITY MANAGEMENT • Whereismy cash?

  9. VAN Internet Typical corporate-to-bank messaging landscape Today’s situation Corporate Accounts payable host to host X leased line Accounts receivable e-banking Y Treasury Other e-banking Z PSTN “fax-banking”

  10. SWIFTNet SWIFT: A secure, standardised global single window to the financial industry CORPHUHB Accounts payable Middleware Accounts receivable Treasury Other

  11. InterAct: FIN: FileAct: Browse: SWIFTNet messaging services offering Store & Forward messaging(e.g. MT101, MT940) Real-time or S&F file transfer forstructured or free format files Real-time or S&F messaging for query / response and transaction input Online information visualisation

  12. Banking servicesCash Management Low value/non urgent payments and reporting 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 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)

  13. Banking servicesTreasury Management Liquidity Management 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) 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)

  14. Banking servicesTrade Finance Import Letter of Credit 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) 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

  15. Yesterday Paper Electronic bank account management (eBAM) Today • 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 messages Supporting documents Fax • Automated • Dematerialised • Standardised • Faster/cheaper

  16. Exceptions and investigations Beneficiary claims non receipt Missing information on Beneficiary Cannot apply payment • 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 Paymentinitiation Reconciliation Settlement PaymentProcessing Exceptions & Investigations 1st presentation - date

  17. 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

  18. The 3SKey solution in detail Corporate user obtains an inactive token from a bank (1a+b) (2) User activates the token on 3SKey portal (3) (4) • Token associated (registered) with several banks 1a CRLcheck • Token used to sign messages – bank verifies signature and revocation status (5)(6) 2 John = 45678 John = 45678 5 Operates PKI and portal, issues certificates 1a 4 3 6 Distributes token, associates user, verifies signatures Activates token, associates with bank, signs John

  19. 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?

  20. SWIFTConnecting the financial community Banks (Founding - 1973) Paymentsystems (1987) SCORE (2007) MA-CUG (2001) Clearing &Settlementsystems (1987) Insurance IMI's (2001) Broker-dealers (1987) Government institutions (2001) Stock Exchanges (1987) Securities MI's(2000) Depositories (1987) Treasury Counterparties (1998) Trustees(1990) IMI's (1992) Payments MI's(1998)

  21. SWIFTNet SWIFTNet SWIFTNet VPN Service Bureau Users Shared infrastructure SWIFTNet connectivity infrastructure owned and operated by third party Apps Internet How to connect to SWIFTNet? Overview of Options Users Private infrastructure SWIFTNet connectivity infrastructure owned and operated by the customer VPN Apps Users Alliance Lite SWIFTNet connectivity infrastructure owned and operated by SWIFT Apps

  22. Users Private infrastructure SWIFTNet connectivity infrastructure owned and operated by the customer SWIFTNet VPN Apps How to connect to SWIFTNet? 1) Private Infrastructure 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

  23. SWIFTNet VPN Service Bureau Users Shared infrastructure SWIFTNet connectivity infrastructure owned and operated by third party Apps How to connect to SWIFTNet?2) Shared Infrastructure (via Service Bureau) VPN 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

  24. SWIFTNet VPN Internet How to connect to SWIFTNet? 3) Alliance Lite • 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 Users Alliance Lite SWIFTNet connectivity infrastructure owned and operated by SWIFT Apps * 1 message = 1 FIN MT or 1 FileAct chunk of 100 Kb

  25. 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?

  26. Bank Readiness - Internal • Bank Operational Readiness Guide: http://www.swift.com/corporates/resources/Getting_Started/SW4CORP_Bank_Operational_Readiness_Guide_20090701_v2.3.pdf

  27. Bank Readiness Certification Programme

  28. 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?

  29. Making your business case Additional benefits Project typically paid back 2 x by operational benefits Financialbenefits ? Business case Operational benefits Better security, more control, … difficult to quantify but can be key driver Costs

  30. Business Case: SWIFT can support SAMPLE!!!

  31. # registered corporate entities Geographical split Corporates on SWIFTWhere do we stand today ? 779 726 Asia Pacific 579 10% Americas 18% 402 72% EMEA

  32. Annual growth 75% # Mbytes exchanged over FileAct (live and pilot) Received by corporates 26,763 Sent by corporates + 26% 21,166 + 14,5% 18,484 16,905 + 9% 15,304 + 10%

  33. Breakdown by region and annual revenues <500M 500M-1B 20101005CAGmeeting_v4.pptx

  34. Corporates on SWIFTBreakdown by industry sector* Connected subsidiaries are counted individually 160 51 40 39 29 28 27 24 22 306 37 industry sectors 20101005CAGmeeting_v4.pptx (*) Using the Industry Classification Benchmark (ICB)

  35. German corporates connected to SWIFT

  36. Austrian corporates on SWIFT

  37. http://www.swift.com/corporates

  38. Judit Baracs Stephan Kraft Country Manager Hungary Corporate Access Specialist SWIFTFischhof 3/6A-1010 ViennaAustria SWIFTFischhof 3/6A-1010 ViennaAustria +43 1 740 40 2373+43 1 740 40 2379+43 664 636 2073judit.baracs@swift.comswift.com +43 1 740 40 2374+43 1 740 40 2379+43 664 636 2090stephan.kraft@swift.comswift.com T T F F M M E E W W Your Contacts

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