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SWIFT Business Forum 2015 in Moscow Adopting ISO 20022: Connecting the dots Moscow, 16 April 2015

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Page 1: ISO 20022 - Patrik Neutjens

SWIFT Business Forum

2015 in Moscow

Adopting ISO 20022: Connecting the dots

Moscow, 16 April 2015

Page 2: ISO 20022 - Patrik Neutjens

ISO 20022

The pace of adoption is

accelerating

Business Forum, Moscow

16 April 2015

Page 3: ISO 20022 - Patrik Neutjens

ISO 20022 adoption - context

3

200 initiatives Under discussion > planned > rollout > live

90 countries

Europe Asia Pacific

Americas Middle East & Africa

ISO 20022 Payments

Securities

Trade Services 51% Foreign Exchange

42%

4% 2% 1%

Cards

Page 4: ISO 20022 - Patrik Neutjens

ISO 20022 adoption - context

Europe Asia Pacific

Americas

Middle East & Africa

Market

infrastructures T2S

As of 2015

Settlement & reconciliation

CSDs and NCBs communicating with T2S

CSD and NCBs

Services to customers

VP Securities DK, NSD RU, Euroclear ESES & FI

2015

TARGET2

EURO1/STEP1

High-value payment systems

Close to 1000 member banks

2017

Payments

systems in CH

All payment systems and instruments

Regional integration

Spill-over

Oversight pressure

As of

2016

Page 5: ISO 20022 - Patrik Neutjens

ISO 20022 adoption - context

Europe Asia Pacific

Americas

Middle East & Africa

Market

infrastructures Jasdec

Live since 2014

ASX

Corporate Actions

New announcement service

AU-NPP

Real-time payments

New services to customers

2017

Brunei

New RTGS system

New services

Internationalisation

Regional integration

Live since

end 2014

Settlement & reconciliation

Live since 2014

Additional plans for post-trade with TSE

Part of ASEAN integration

Page 6: ISO 20022 - Patrik Neutjens

ISO 20022 adoption - context

Europe Asia Pacific

Americas

Middle East & Africa

Market

infrastructures DTCC

Live since 2011

Galgo (BR)

Corporate Actions

New announcement service

CPA

All payments systems

New services to customers

Date to be confirmed

US

Business case assessment

New services

Automation

Transformation

Securities transformation

Live since 2011

Corporate Actions

Roadmap setting

Date to be confirmed

Page 7: ISO 20022 - Patrik Neutjens

ISO 20022 adoption - context

Europe Asia Pacific

Americas

Middle East & Africa

Market

infrastructures SADC

As of 2015

Regional integration

Renewal of legacy systems

New services

13 countries in Africa

Low-value payments

Mobile-to-mobile payments

Potential securities initiatives

Other initiatives

Jordan

South-Africa

Page 8: ISO 20022 - Patrik Neutjens

Adopting ISO 20022: speakers

• Georgiy Chirkov, Head of Section eBanking Product

Development, Unicredit

• Sergey Putyatinskiy, CIO, National Settlement Depository

• Elena Solovyeva, Global Head of Standards,ROSSWIFT

• Patrik Neutjens, ISO 20022 Programme Director, SWIFT

Page 9: ISO 20022 - Patrik Neutjens

What are Market Infrastructures and banks telling

us?

9

Less variation,

more global

market practice

Provide a predictable

environment for

MI communities (versions, release mgt, ..)

Best practice sharing for community

adoption & implementation

1

2

3

Page 10: ISO 20022 - Patrik Neutjens

10

Community management

Market practice

From fragmented market

practice to harmonized

and validated global and

community market

practice

Predictable

release cycle

Version manage- ment

Versions actively

managed in collaboration

with user community

Onboar-ding

Efficient community

onboarding &

readiness testing

Standardised

messaging setup

SWIFT’s community management

Powered

by MyStandards

Page 11: ISO 20022 - Patrik Neutjens

SWIFT and ISO 20022

Efficient community

management

Resilient messaging

platform

Standards expertise

Unequalled contribution

to ISO 20022

SWIFT - the trusted source for your ISO 20022 initiative

Trusted consulting

partners for more

ISO 20022 initiatives

globally than anyone else

Only worldwide value-added network

designed specifically for ISO 20022

Highest standards of reliability,

availability and security

Selected as platform provider

for key ISO 20022 initiatives

in payments and securities

Forty years of community expertise Unique tools and established

processes to support communities

for ISO 20022

Page 12: ISO 20022 - Patrik Neutjens

Coffee break

Page 13: ISO 20022 - Patrik Neutjens

Moscow Business Forum Traffic trend and cost

Andre Boico

16 April 2015

Page 14: ISO 20022 - Patrik Neutjens

Russia FIN traffic since connection in 1989

14 SWIFT – Moscow Business Forum – April 2015

?

0

10

20

30

40

50

60

70

80

90

100

1990 1995 2000 2005 2010 2014

430% growth

in 10 years

mn sent messages

2015

Page 15: ISO 20022 - Patrik Neutjens

10%

14%

22%

10%

-2%

7% 10%

4%

10% 11%

-5%

0%

5%

10%

15%

20%

25%

-

1,000

2,000

3,000

4,000

5,000

6,00020

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

Millio

ns

SWIFT Growth

SWIFT FIN traffic growing 11% in 2014, adding another

500 Million FIN messages. Due to continuous stronger growth in Russia, the Russian share in the total SWIFT

traffic goes up to 1.7% (versus 0.7% 10 years ago).

16% 15% 19% 18%

-5%

15%

34%

21%

43%

28%

-10%

0%

10%

20%

30%

40%

50%

-

10

20

30

40

50

60

70

80

90

100

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

Millio

ns

Russia Growth Russia

15 SWIFT – Moscow Business Forum – April 2015 Figures are based on total yearly traffic

Page 16: ISO 20022 - Patrik Neutjens

FIN yearly traffic evolution With an average yearly growth rate of 21% over the last 15 years, Russia

outperforms SWIFT total (growing 11% on average), EMEA region (11%) and

BRICS (16%).

0%

200%

400%

600%

800%

1000%

1200%

1400%

1600%

SWIFT total

EMEA

BRICS

Russia

16 SWIFT – Moscow Business Forum – April 2015 Figures are based on average daily traffic

Page 17: ISO 20022 - Patrik Neutjens

2014 FIN Growth Russia outperforms BRICS and total SWIFT

-10%..0% < -10% > 0% Color coding:

Total Americas Asia-

Pacific EMEA Russia BRICS

Payments 8.6% 12.3% 11.8% 6.7% 31.4% 25.0%

Securities 15.0% 10.6% 15.2% 16.3% 17.0% 16.4%

Treasury 2.4% 4.8% 4.5% 1.3% -7.3% -0.2%

Trade -2.5% -5.5% 0.2% -4.2% 3.8% 0.3%

Total 11.0% 11.1% 12.2% 10.7% 27.7% 20.7%

FIN Average Daily volumes

Actual growth Full Year 2014 vs 2013

(*) Central and Eastern Europe: Albania, Armenia, Austria, Azerbaijan, Bosnia-Herzegovina, Bulgaria, Belarus, Switzerland, Czech Republic,

Germany, Estonia, Georgia, Croatia, Hungary, Kyrgyzstan, Kazakhstan, Liechtenstein, Lithuania, Latvia, Moldova, Montenegro, Macedonia,

Mongolia, Poland, Romania, Republic of Serbia, Russia, Slovenia, Slovakia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan, Kosovo, Republic of

17 SWIFT – Moscow Business Forum – April 2015

Page 18: ISO 20022 - Patrik Neutjens

2015 March YTD FIN Growth Off to a good start – March YTD best month ever with an average of 24.63 million

messages per day. 31 March was the first peak day of 2015 with 26,835,427

messages.

18 SWIFT – Moscow Business Forum – April 2015

PEAK DAY - 31 March 2015 26.84

18

19

20

21

22

23

24

25

26

27

Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec

2013 Actuals 2014 Actuals 2015 Actuals Best month ever

Figures are based on average daily traffic

Tra

ffic

in m

illio

ns o

f m

essages –

all

mark

ets

Page 19: ISO 20022 - Patrik Neutjens

2015 March YTD FIN Growth - Russia

19 SWIFT – Moscow Business Forum – April 2015

230

280

330

380

430

480

Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec

2013 Actuals 2014 Actuals 2015 Actuals

Tra

ffic

in m

illio

ns o

f m

essages –

all

mark

ets

Page 20: ISO 20022 - Patrik Neutjens

0

2

4

6

8

10

12

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201

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0

201

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1

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201

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1

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201

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8

201

40

9

201

41

0

201

41

1

201

41

2

201

50

1

201

50

2

Millio

ns

Banking MI Securities MI SWIFT for Corporates Other

FileAct traffic – Monthly evolution Average daily number of Kchar

0

1,000

2,000

3,000

4,000

5,000

6,000

201

20

1

201

20

2

201

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3

201

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9

201

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0

201

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1

201

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2

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1

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0

201

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201

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0

201

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1

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1

201

50

2

20

SWIFT – Moscow Business Forum – April 2015

Page 21: ISO 20022 - Patrik Neutjens

0

500

1,000

1,500

2,000

2,500

3,000

201

20

1

201

20

2

201

20

3

201

20

4

201

20

5

201

20

6

201

20

7

201

20

8

201

20

9

201

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0

201

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1

201

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2

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1

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201

30

9

201

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0

201

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1

201

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2

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1

201

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2

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0

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1

201

41

2

201

50

1

201

50

2

Th

ou

sa

nd

s

Banking MI Securities MI CLS RMA Other

InterAct traffic – Monthly evolution Average daily number of messages

0

500

1,000

1,500

2,000

2,500

201

20

1

201

20

2

201

20

3

201

20

4

201

20

5

201

20

6

201

20

7

201

20

8

201

20

9

201

21

0

201

21

1

201

21

2

201

30

1

201

30

2

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3

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4

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30

5

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30

6

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30

7

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30

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30

9

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1

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31

2

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1

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2

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3

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4

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5

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6

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40

7

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40

9

201

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0

201

41

1

201

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2

201

50

1

201

50

2

21

SWIFT – Moscow Business Forum – April 2015

Page 22: ISO 20022 - Patrik Neutjens

0

10

20

30

40

50

60

70

80

90

100

Millio

ns

Over 95 million Payments per day FileAct Payments growth exceeds FIN Payment growth

(*) Estimated number based on assumptions (about file compression,

average nr of characters per transaction) validated with the MI’s

LVP (ACH)

FIN Payments (Cat 1, 2, 9 and copies)

22

SWIFT – Moscow Business Forum – April 2015

Page 23: ISO 20022 - Patrik Neutjens

23

SWIFT – Moscow Business Forum – April 2015

Building the SWIFT network – Number of users

0

2,000

4,000

6,000

8,000

10,000

12,000

Page 24: ISO 20022 - Patrik Neutjens

24

SWIFT – Moscow Business Forum – April 2015

Building the SWIFT network – Russia

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

0

100

200

300

400

500

600

700

Live Users # messages per user (secondary axis)

Nu

mb

er

of R

ussia

n L

ive

use

rs

# o

f m

essa

ge

s s

en

t p

er

use

r in

Ru

ssia

3933

4296

4576

3,600

3,800

4,000

4,200

4,400

4,600

4,800

2012 2013 2014

Number of Russian users and messages sent per user.

Number of

counterparties involved

in traffic sent from

Russia

Page 25: ISO 20022 - Patrik Neutjens

25

SWIFT – Moscow Business Forum – April 2015

Building the SWIFT network – Corporate adoption # of connected corporate BIC8’s (Cumulative)

Page 26: ISO 20022 - Patrik Neutjens

26

SWIFT – Moscow Business Forum – April 2015

Building the SWIFT network – LITE2 users

0

100

200

300

400

500

600

700

Page 27: ISO 20022 - Patrik Neutjens

SWIFT Pricing Principles

SWIFT – Moscow Business Forum – April 2015

27

Page 28: ISO 20022 - Patrik Neutjens

SWIFT Pricing Principles

SWIFT – Moscow Business Forum – April 2015

28

1. Designed to maximize usage

– Fixed Fee programme

– Point-to-point discount

– Intra-traffic Discount

2. Recognizes the contribution of large users

3. Be fair and transparent to all users

(eg. HSM migration, Lite2 at low cost, sanctions screening)

4. Reduce barriers to entry for smaller users

Page 29: ISO 20022 - Patrik Neutjens

FIN Price before rebate

(EURcent / msg)

FIN Traffic

(Millions of msgs)

SWIFT committed to 30-50% price cut over 2010-2015

… and has reached the challenge one year ahead

29

FIN Price before rebate

(EURcent / msg)

FIN Traffic

(Millions of msgs)

Page 30: ISO 20022 - Patrik Neutjens

0.20

0.13

0.11

0.06

-

0.05

0.10

0.15

0.20

0.25

2005 2010 2011 2014

30

Average price (Russia)

Euro/FIN message

-37 %

Russia benefitted from the price reductions over the years

-52 %

SWIFT Romania Business Forum * Figures are after Fixed Fee, point-to-point discount and before rebate

Page 31: ISO 20022 - Patrik Neutjens

Traffic evolution vs Messaging cost evolution 2005 is used as base year

31

0

100

200

300

400

500

600

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

0

10

20

30

40

50

60

70

80

90

100

31%

528%

161%

100%

100%

traffic evolution (# FIN messages) unit cost evolution (2nd axis) messaging cost evolution

%

%

%

%

Traffic and Cost