recent trends in russia & cis – a swift perspective - rouble...

Recent trends in Russia & CIS – a SWIFT perspective

Matthieu de HeeringHead of Russia, CIS and Mongolia - SWIFT

Rouble Trends 2016 event – Moscow – 10-Nov-2016

Digital disruption in payments

33Digital disruption in payments – October 2016Digital disruption in payments – October 2016

Disruption is creeping up from C2C to SME and B2B, where most of the banks’ transaction revenues are

Source: McKinsey Global Payments Map; Project team

1 Revenues include transaction fees, FX fees, exclude revenues not directly linked to individual transactions (account maintenance fees, interest income) and FI to FI flows2 Currently in the B2B/B2C/SME space but actively pushing towards entering into the B2B corporate space (e.g., Western Union Global Pay app)

44Digital disruption in payments – October 2016

Distributed ledger technologies (DLT) can present some opportunities

Distributed database

Information propagation

Beyond payments, e.g. trade

financeTraceability

55Digital disruption in payments – October 2016

Digital disruption in payments – October 2016 6

DLTs – conclusions of the technology assessment

• Distributed ledger technologies (DLT) can present some opportunities

• Existing DLTs are currently not mature enough to fulfil the requirements identified

• There are promising developments in each of these requirements

• Significant extra R&D work is needed in all these domains before DLTs can be applied at the scale required by the financial industry

Distributed database

Information propagation

Beyond payments, e.g. trade

financeTraceability

7

Need for change, also rejuvenate business model

Technology Business

Digital disruption in payments – October 2016

The correspondent banking model is under pressure

Customers and regulators push for better payments service

Banks rationalize their correspondent banking networks

Digital innovators offer new disruptive solutions

End customers increasingly demanding

Domestic payments going real-time

Regulatory intensity and increasing costs

Network rationalization

Enhanced value proposition

Disintermediation


Objective: deliver a better customer payment experience

“Before”Traditional correspondent banking

“After”The SWIFT global payments innovation (gpi) initiative

1. Slow, can take multiple days

2. Expensive, multiple deducts

3. Secure and compliant

4. No transparency on cost and time

5. Convenient and ubiquitous

6. Open and inclusive (global reach)

1. Fast(er) (start with “same day”)

2. Higher efficiency & less intermediaries

3. Secure and compliant

4. Transparent, with payments tracking

5. Convenient and ubiquitous

6. Open and inclusive (global reach)

The objective is to first fix these key pain points

Note regarding prices: it will be at the discretion of each SWIFT gpimember to decide the pricing strategy vis-à-vis its customers, including other financial institutions


Still reachnon-initiativebanks

Accessibleby any bank

Reachingany bank

Tracker

Directory Observer

SWIFT gpi concept

SLA rulebook

Core transaction banks

Value-added product suite

Messaging technologies


SWIFT gpi initiative banks

Regional representation ofSWIFT gpi banks

50% Europe, Middle East,Africa

30% Asia Pacific

20%Americas

63. Nordea Bank* 64. Oversea-Chinese Banking Corporation65. PKO Bank Polski66. Promsvyazbank67. Rabobank68. Raiffeisen Bank International69. Resona Bank70. Royal Bank of Canada*71. Royal Bank of Scotland72. Sberbank73. Siam Commercial Bank74. Silicon Valley Bank75. Skandinaviska Enskilda Banken76. Société Générale77. SpareBank 178. Standard Bank of South Africa79. Standard Chartered Bank*80. Sumitomo Mitsui Banking Corporation*81. Swedbank82. Tadhamon International Islamic Bank83. TMB Bank84. Toronto-Dominion Bank85. UBS86. U.S. Bank87. UniCredit*88. United Overseas Bank89. Wells Fargo*

46. ICICI Bank47. IndusInd Bank48. Industrial and Commercial

Bank of China*49. ING Bank*50. Intesa Sanpaolo*51. Investec52. Itaù Unibanco53. JPMorgan Chase Bank*54. Kasikornbank55. KBC Bank56. KEB Hana Bank57. Lloyds Bank58. Mashreq Bank59. Maybank60. Mizuho Bank*61. National Australia Bank62. Natixis

28. Commonwealth Bank of Australia29. Commerzbank30. Crédit Agricole31. Crédit Mutuel-CIC Banques32. Credit Suisse33. CTBC Bank34. Danske Bank*35. DBS Bank*36. Deutsche Bank37. DNB Bank38. Ecobank39. E.Sun Commercial Bank40. Erste Group Bank41. Fifth Third Bank42. FirstRand Bank43. Handelsbanken44. Helaba Landesbank Hessen-

Thüringen 45. HSBC Bank

(*) Pilot bank

1. ABN AMRO Bank2. ABSA Bank3. Alfa-Bank4. Australia and New Zealand

Banking Group*5. Axis Bank6. Banco Bilbao Vizcaya Argentaria7. Banco Bradesco8. Bangkok Bank9. Bank of America Merrill Lynch*10. Bank of China*11. Bank of New York Mellon*12. Bank of Nova Scotia13. Bank of the Philippine Islands14. Bank of Tokyo-Mitsubishi UFJ*15. Banco Santander16. Banco de Crédito del Peru17. Banco do Brasil18. Banque Européenne d’Investissement19. Barclays*20. Bidvest Bank21. BNP Paribas*22. Budapest Bank23. CaixaBank24. Canadian Imperial Bank of Commerce25. China Construction Bank 26. China Merchants Bank27. Citibank*

Digital disruption in payments – October 2016

85+initiative banksChannelling payments

into 224 countries

Representing 71% of all SWIFT cross-border

payments

11

Market Infrastructures

v01

General Market Infrastructure trends R themes

13

• Fighting financial crime & regulatory compliance• CPMI-IOSCO, Sanctions, Intraday liquidity, CSDR, PSD2

• Increasing / changing (cyber) threats• Compliance with CPMI-IOSCO guidance

• Operations: multi-currency, extended opening hours, rationalisation• Replace aging technology• Drive towards ISO 20022

• Increasing international connectivity/interoperability of infrastructure• ISO 20022 adoption• Examples: T2S, SEPA, SADC, ASEAN, CIPS, MILA, ASEAN

Regulation

Regionalisation

Renewal

Resilience

• 24/7/365 real-time retail payments, for example, AU NPP, US TCH, SEPA Inst

• Towards a single platform for all payments (HVP vs RTP vs LVP)

Real-time

Changingvalue proposition


Towards 2020

14

SWIFT2020 Strategic Priorities

Software &

Connectivity

Messaging

Shared Services

One-to-Many MIsMany-to-Many FIs

MIFI

FI

FI

FI

FI

FI

FI

FI

FI

FI

FI


• Payments• Securities• Treasury / FX

Core

Compliance

FMIs are an important segment for SWIFT and a major part of the SWIFT2020 strategy


Strategy and ReachFMI Reach and Evolution

15

Shows domestic FMI systems where SWIFT traffic is ‘live’. FMI may not use SWIFT for all its operations

100

120

140

160

180

200

220

240

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

FMIs 'Live' on SWIFT


ISO 20022 & Harmonisation

September 2016

v01

Share information• ISO 20022 information including Message

types, release timelines, and declaration of compliance with global market practice

StandardsISO 20022 Harmonisation

17

Publish

Adhere

Share

Publish information on MyStandards. Disseminate message types, message versions, release timeline and market practice

ISO 20022 Harmonisation Charter

Proliferation of ISO 20022 implementations (200+) means increased variability in deployment, multiple message versions, market practice rules and release cycles

ISO 20022 HarmonisationCharter ensures less variation and more global market practice

Signed by Major FMIs

Payments

• ACH Colombia• Bank of Canada• Canadian Payments Association• Hong Kong Interbank Clearing• Southern African Development

Community

Securities

• Australian Securities Exchange• Clearstream• Euroclear• LCH.Clearnet• Russia’s National Settlement

Depository• Singapore Stock Exchange• Ukrainian National Securities and

Stock Market Commission• VP Securities Denmark• VP Securities Luxembourg• VPS Norway

FX

• CLS

Market practice and Release Management• Adhere where possible to ISO 20022

Global market practice• Synchronise maintenance timeline with

SWIFT MT/FIN• Minimise number of simultaneous message

versions

www.swift.com

SWIFT Instant Payment Solution 18

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