swift for corporates unique solutions for global corporates

SWIFT for Corporates Unique solutions for global corporates

Mauritius, 20th May 2016

Agenda

• About SWIFT • Setting the Scene – Corporate Treasury Insights 2016 • SWIFT for corporates - an overview • How to connect to SWIFT easily? • The Business Case – Can you afford not to use SWIFT? • Corporate Bank Readiness • Next Steps

SWIFT for Corporates Workshop, Mauritius – 20th May 2016 2

The global provider of secure financial messaging services


40 years serving the global financial community 70s 80s 90s 00s 10s

1973: Swift is born 1976: First operating centre opens 1977: SWIFT goes live – first message sent 1979: North America connects to SWIFT

1980: First Asian countries connect to SWIFT 1986: SWIFT launches value-added services 1987: SWIFT launches securities services

1992: Interbank File Transfer goes live 1994: Customer support centre opens in Hong Kong 1997: SWIFT technology centre opens in the United

States

2001: SWIFTNet goes live 2004: ISO 20022 introduction 2008: SWIFT launches Alliance Lite 2009: SWIFT launches Innotribe

2012: SWIFT launches Sanctions Screening and Testing

2013: SWIFT opens operating centre in Switzerland and corporate services centre in Kuala Lumpur


SWIFT in figures

5.6+billion FIN messages per year (2014)

10,800+ SWIFT users

200+ Countries and territories

25.8 million FIN messages peak day (2014)

11% Increase in FIN traffic (2014)


Corporate Values

Excellence Communities Innovation


Banks

Global Custodians

Corporates

Central Counterparties

Trade Depositories

Central Banks

Broker-Dealers

Fund Managers

Clearing & Settlement Systems

Depositories

Stock Exchanges CSDs

ICSDs

SWIFT users


Messaging

Software Offering

Shared Services

Standards Platform

Our offering to the Community


Standards

Platform

SWIFT’s core messaging service Financial messaging, enabled by platform and standards

Messaging FIN

InterAct FileAct


Secure financial connectivity

Trouble-free payments and compliance

Certainty and efficiency in the supply chain

Identity and mandate management

SWIFT for Corporates


PowerPoint Toolkit – 23 October 2008 – Confidentiality: restricted 11

Setting the Scene Corporate Treasury Insights 2016

Corporate Treasury Insights 2016 A report from BCG and BNP PARIBAS

• A cross-industry survey

• 750 corporate treasurers and CFOs

• Around the world

• Builds on the findings of the 2015 Corporate Treasury Insights study


SWIFT for Corporates Workshop, Mauritius – 20th May 2016

Low-interest rate environment has reduced the benefit of Cash Pooling

13

A Call for platform flexibility

Treasurer wants

• A consolidated view of their liquidity and financial positions

• detailed reporting

• Greater consistency across geographies

• Platforms to aggregate such as cash management, trade, working capital management and FX

…but they don’t want to be tied to a single banking platform

Source: BCG / BNP corporate treasurer insights survey, 2015 / 2016


Channel adoption varies by company size and region


The Emergence of Fintechs Increasing fragmentation in the ecosystem

• Treasurers like the specialised value proposition and the often-cheaper pricing

• However, 90% indicated that fintechs are not yet capable of meeting the full array of corporte treasury needs

• It is expected, that fintechs and banks to partner with each other

“If banks don’t react, they will get ‘Uberized’ by fintechs”



Banks have an opportunity to serve as valued advisors

Banks can extend that expertise in five ways

• Securing company funding

• Leveraging their knowledge to provide in-depth support and advanced advisory (e.g. improve FX activities)

• Helping treasurers better assess counterparty credit risks

• Helping treasurers navigate the complexities of the local regulatory requirements

“We need expertise from banks in areas that TMS and nonbanking providers will never be able to provide”



Only a few corporates are using advanced analytic tools


SWIFT for corporates – An overview

Process landscape reflecting your current bank communication Global growth is important but results in a

challenge


Domestic Formats Host2Host Fax Webservices eBanking Post Phone Email Intranet

Statements Payment instructions FX-confirmations Sanctions lists OTC-Reporting Guarantees Advise LCs


Connect all your banks globally

Global treasury powered by SWIFT


SWIFT

Statements Payment instructions FX-confirmations Sanctions lists OTC-Reporting Guarantees Advise LCs

Your Corporate BIC


Business area Description Solution

Payments High-value & bulk payments FIN MT101 FileAct for all formats e.g. ISO 20022, DTA

Cash Management Intraday and end-of-day statements FIN MT9xx, MT210 FileAct for all formats e.g. ISO 20022

Foreign exchange Deal Confirmations and matching FIN MT3xx

Multi-asset class matching

FX/MM, Derivatives, Commodities, Securities

Matching (Accord) FIN MT3xx, MT5xx, MT6xx

Trade Finance LCs, Demand Guarantees FIN MT798 FileAct for documents

Supply Chain Finance

BPO based services (Payment on time, risk mitigation, financing) and approved payables financing FileAct for all formats e.g. ISO 20022

Regulatory requirements Trade reporting, clearing and collateral management FIN

FileAct

eStatements Statement dematerialisation FileAct e.g. PDF, …

EBAM Account management (opening, closing) and Mandate management (signatories, user entitlements)

ISO 20022 Documents e.g. PDF, …

Portfolio of Industry Standards supporting your various business flows*

SWIFT to cover your business flows

*Non-exhaustive list of business flows



In Figures

2,630 Banks reached

globally (with traffic in

Q1’16)

46% Fortune 500 companies on SWIFT

37% Less than

USD 1 billion turnover

25% Less than USD

0.5 billion turnover

53% Of corporates that

joined since 2015 went for Lite2

691 Corporates used ISO

20022 formatted messages

37 Of Top40 SCORE

banks are certified

19 Of Top20 SCORE

banks support 3SKey

1,585 Corporate groups

using SWIFT

A growing community since first inception in 1999

56 Corporates joined SWIFT in Q1 2016

Q1 2016 highlights


Current status Corporate segment – Q1 2016

Per corporate turnover & banking partners

14%

52%

5%

29% 29%

34%

12%

25%

> 10 Bn

1-10 Bn

0.5-1 Bn

< 0.5 Bn

Corporates by annual turnover (USD Billion)

Inner: joining in 2016

Outer: All

47% of corporates joining SWIFT in 2015 have a turnover < 1 Billion USD 31% of corporates joining SWIFT in 2015 have a turnover < 500 Million

USD

> 20 banks 23%

b/w 10 and 20 banks 23%

b/w 5 and 9 banks 24%

less than 5 banks 30%

Corporates by number of banking partners

Corporates with

traffic in Q1 2016

70% of SWIFT-connected corporates deal with 5 banks or more

(based on Live traffic in Q1 2015) 24

Corporate connectivity

Legend

• > 75

• 25 – 75

• 10 – 25

• < 10

• 0

Per country


Corporate connectivity

Corporate Traffic evolution in Africa

0

50000

100000

150000

200000

250000Sum of Traffic sent Sum of Traffic received

243 Corporates exchange messages with banks in Africa

2.6 million messages exchanged with African Banks

(2015)

• 82% of traffic is Statements • 14% of traffic is Payments • 4% of traffic is FX confirmations

• 44 Corporates domiciled in Africa • 23 Corporates domiciled in sub-Sahara

Africa

Africa facts and figures 2015

Corporates on SWIFT

7%

93%

FIN Traffic sentby corporates toAfrican Banks

FIN Trafficreceived bycorporates fromAfrican Banks

Traffic Analysis

27

How to connect to SWIFT easily?

Cloud-based connectivity via Alliance Lite2 Alliance Lite2 Lite2 membership

Corp Bank Lite2

HTTPS / VPN

In House SWIFT membership SWIFT Interface

Cloud-based connectivity via Alliance Lite2 Corp Bank SN

Service Bureau SWIFT membership SB provider

Cloud-based connectivity via Alliance Lite2 Corp Bank SB

FTP / VPN

SN

SWIFT for Corporate 3 Ways to connect



ERP

Alliance Lite2

Industry standards

Proprietary format

Batch payment preparation Payment validation File preparation

1 - Payment initiation

Overview - End-to-end workflow

TMS

SIL Payment validation Format Conversion File Transmission

2 - Payment Process

HTTPS / VPN

LAU

3 - Payment Routing Secure Automatic Transmission Automatic Routing Non Repudiation

SWIFTNet

4 - Payment Processing Delivery Notification Validation and Process Generate Bank Statements

Automatic import Cash Positions Update Accounting Reconciliation

5 - Bank Statements Reconciliation

Virtualization Pack (VPN) Personal Signature Securities and FX processing Trade Finance

6 - More options and services


Offering Alliance Lite 2

HTTPS/VPN

Alliance Lite2

Infrastructure hosted by SWIFT SWIFTNet

Simple set-up Low cost Full

SWIFT access

Own BIC

Cloud solution


Starter package Alliance Lite 2

Easiest way to connect to SWIFT via HTTPS and manual access using the Alliance Lite 2 GUI. Automated flows can be reflected by utilising the Alliance Lite 2 Autoclient that is part of the package already. Authorization is based on USB-token devices.

ERP/TMS

CORPDEXXX

Autoclient on

dedicated hardware

HTTPS


Enhanced package Alliance Lite 2

Using SWIFT-VPN-boxes will open the field to use software certificates instead ot the USB token device for the Alliance Lite 2 Autoclient. This enables you to work in an full virtualized server environment and helps to save costs and IT resources.

ERP/TMS

CORPDEXXX

Autoclient on

virtualizedservers

VPN


Managed package Alliance Lite 2

The Autoclient will be installed on the premises of the client via VPN connection. SWIFT is taking care of the Autoclient in case of upgrades, maintainence or failures.

ERP/TMS

CORPDEXXX

Autoclient on

virtualizedservers

and actively

managed by SWIFT

VPN


SWIFT implementation

SWIFT Training & GUI usage

Token implementation

Remote installation Autoclient

Solution design

Turnkey Implementation

Package for

Alliance LITE2

Start to use SWIFT as soon as possible and only with a minimalistic effort being support by the experts.

Be ready in no time One-stop shop


Alliance Lite 2 Bank on-boarding services to complete the SWIFT experience Consulting services

Consultancy Offering Description

Business Flow Analysis

(Package 1)

Review of business flows for payments, cash management and treasury in the framework of bank connectivity via SWIFT.

Advise on best practices in the areas of message and standards usage and the bank relationship model on SWIFT.

Bank Relationship

Onboarding (Package 2)

Facilitate engagement in conjunction with the customer and relationship bank(s) from initial kick-off discussions, message standards requirements and legal & commercial negotiations.

Provide SWIFT expertise during the project implementation to provide assistance for the onboarding of the customer’s bank(s).


Alliance Lite2 Integrate with your existing IT landscape SWIFT Integration Layer

Services

SWIFT Integration

Layer


Content - Check if a MT940 is single-page or multiple page and if

all of the pages of a multiple page MT940 are received - Process the MT940 and ensure that only complete

MT940 statement data per senders BIC, account, currency code and statement date is passed to Convertor (or IPLA).

- Transform the MT940’s into a single coherent unit that represents the total daily activity in a cash account that can be passed into a routine to further transform that daily activity into any statement format (e.g. BAI2, Excel).

Background The 2,000 character message size restriction on SWIFT requires many MT940 statements to be split among multiple statement pages, each sent across the SWIFT network as a separate message with a unique reference number. These pages may not be delivered to the recipient in the order that they are sent, and the delivery of each individual page is not guaranteed as pages can NAK on SWIFT. In order to correctly reconcile MT940 into a statement format, clients require the re-assembling of all pages of an MT940 into a single coherent unit.

MT940 aggregation

1

2

4

3

SIL


Available packages

38

Content - Parsing of MT940s into a database as provided by the

customer - Customer can access data directly from the database or

through a GUI they could develop themselves

Background Some customers, receiving MT940s would like to rely on Lite2 to offer a searchable archival of these statements. This may or may not be in combination with their requirements for aggregation of MT940s.

1

2

4

3

SIL


MT940 storage

Available packages

39

Content - Reading of MT940 data from the standard or customer

database (in case the customer also wants the MT940 storage package)

- Human readable presentation in pdf (based on customer specifications)

Background Some customers, receiving MT940s would like to also receive human readable statements through Lite2 (such functionality was available in the original Lite1). This may or may not be in combination with their requirements for aggregation of MT940s and/or database storage.

1

2

4

3

SIL


Human readable MT940 in pdf

Available packages

40

Content - Management of the typical FileAct flows (ingoing and

outgoing) between Corporates and their Correspondent banks

- Customization through configuration - Support for Multiple file formats towards different banks

(Routing) - Logging of all transactions (monitoring) - Optional components

- Validation of file content - Transformation of file content - MQ connectivity - Formatting of authorization info (i.e. Txs Count)

Background Corporates typically want to communicate with their Correspondent banks via FileAct. While doing so they need a number of functionalities such as calculation of transaction count, a processing results report and flow type selection based on MT, sender and Receiver BIC

Bank A

Bank B

Payments File

Acknow-ledgement

Report File

Bank A or B ?

SIL

Monitoring


FileAct for Corporates

Available packages

41

Content - Management of the typical FIN flows (ingoing and

outgoing) between Corporates and their Correspondent banks

- De-bulking of payments batch file - Customization through configuration - Logging of all transactions (monitoring) - Optional components

- Validation of payload - MQ Connectivity - Transformation of payload, i.e.

- CSV to MT - MT mapping in line with individual bank’s

usage rules

Background For corporates that want to communicate with their Correspondent banks via FIN, a number of typical functionality such as de-bulking batch files with payments is required.

Payment (e.g. MT 103)

Acknow-ledgement

Report (e.g. MT199) Statements (e.g. 950)

Bank A

Bank B

Bank A or B ?

SIL

Monitoring


FIN for Corporates

Available packages

42

Content - Parsing of AutoClient log files - Generation of SNMP alerts in case of issues identified to

person monitoring the infrastructure in SWIFT

Background Very often, large corporates expect their systems suppliers to also manage their applications. In this context, SWIFT will develop a Managed Operations offering for Lite2 users, including AutoClient.

Lite2 AutoClient

Log files

SNMP alert


Autoclient alerting

Available packages

43

Can you afford not to use SWIFT?

100%

132%

162% 173%

195%

224% 239%

272%

297%

100% 103% 100% 95% 93% 86% 88% 87% 81%

100%

27%

0%

20%

40%

60%

80%

100%

120%

0%

50%

100%

150%

200%

250%

300%

350%

2006 2007 2008 2009 2010 2011 2012 2013 FYestimate

2014 FYEstimate

traffic evolution (Kchar) messaging revenue evolution unit cost evolution (2nd axis)2006 is used as base year (100%). 2013 full year estimation is a lineair projection based on the months available. Figures are after Fixed Fee, after discount for High Volume Connections (including estimate for 2013 and 2014) and before Rebate. Traffic is expressed in kilo characters, and is the combination of FIN, InterAct (including CREST) and FileAct (Kchar after compression).

Future proof investment 73% cost reduction

45

Alliance Lite2 Choose the package that fit your needs

Item Starter Enhanced Managed

One-time implementation fee 10.000 EUR 25.000 EUR 40.000 EUR

Monthly fees Starting at 450,00 EUR

Starting at 1.350,00 EUR

Starting at 3.200,00 EUR

Implementation service

Turnkey implementation with remote installation

Turnkey implementation with on-site installation

Turnkey implementation with on-site installation

Named contact during joining

phase No Yes Yes

Support after implementation Standard Dedicated Peace of Mind

support Pro-active support and

monitoring

Connectivity HTTPS & USB VPN & Channel Cert. VPN & Channel Cert.

One-time implementation fees


Band Traffic send (units per day) Price (EUR)

1 0 – 10 450,00*

2 10 - 30 750,00*

3 30 – 100 1.200,00

4 100 – 500 1.750,00

Alliance Lite2 Starter package

Monthly pricing excl. traffic

*Please note that if you receive over 500 units a day a 50% surcharge on the base fee in band 1 & 2 will apply.



1 0 – 10 1.350,00*

2 10 - 30 1.650,00*

3 30 - 100 2.100,00

4 100 - 500 2.650,00

Alliance Lite2 Enhanced package including VPN and peace of mind support Monthly pricing excl. traffic




1 0 – 10 3.200,00*

2 10 - 30 3.500,00*

3 30 - 100 3.950,00

4 100 - 500 4.500,00

Alliance Lite2 Managed package incl. pro-active autoclient support Monthly pricing excl. traffic



Alliance Lite2 How to calculate your units and Alliance Lite 2 fees Pricing guideline

One Unit FIN: 1 message (size does not matter) InterAct: 1 message (size does not matter) FileAct: 1 chunk of 10kChar (after

compression) Only live billable traffic is taken into account

Billing starts New SWIFT customers:

• 30 days after token shipment date

Band upgrade/downgrade Review: every 6 months First band: always as per quotation First review: 6 months after first invoice Traffic: sum of the live traffic over the last 6

months divided by 128 Note FileAct: total #kchar / 10 / 128


You want even more SWIFT? Discover our full portfolio!

Solutions beyond connectivity SWIFTRef Bank Master Data – The challenge


Local banks SEPA-country

Local banks non-SEPA country

Local suppliers

To keep the bank master data up to date in a global world the corporate needs to consult different sources. With SEPA this becomes even more difficult as there are country- & bank-specific rules to be followed like central BICs that needs to used for SEPA payments.

Local repositories like Bundesbank


Three reason why to go with SWIFT

SWIFT for Corporates Solutions beyond connectivity SWIFTRef

Global footprint with excellent contacts to the local authorities and to the banking

community

SWIFT is the official BIC registration

authority

Solid track record with over 300

corporate customers globally so far


Corporate Pack 2 File-based BIC codes

National Bank codes (160+ countries) IBAN data (All countries)

Bankers World Online included Monthly updates SAP compatible

Pricing (per year)

Bankers World online: Corporate Pack 1: Corporate Pack 2:

Options Automation: 10% Group licence: on request

Bankers World Online Easy online access

BIC codes & bank hierarchy Bank codes (160+ countries)

IBAN data (All countries) SEPA Routing

SSIs

Corporate Pack 1 File-based

IBAN data (All countries) Bankers World Online included

Monthly updates

Bank Master Data – Go for best in class data quality

SWIFT for Corporates Solutions beyond connectivity SWIFTRef

2.500 USD 4.000 USD

10.000 USD


PowerPoint Toolkit – 23 October 2008 – Confidentiality: restricted 55

Corporate Bank Readiness

Achieving Operational Readiness

Messaging • Correctly support a minimum set of MTs: MT101, MT940 • Comply with FileAct Implementation Guide

• Test environment available • Scripts for testing connections and applications

Testing Capabilities

Documentation • On boarding Guide • Contractual information

Support • Implementation Support - at least one identified individual to provide 1st line customer support

Subscription • SCORE - Standardised Corporate Environment on SWIFTNet


Is your bank ready for SWIFT for Corporates?

• It is a standardised corporate environment on SWIFTNet

• It is based on a closed user group

• It is administered by SWIFT

• Corporates can interact with all banks registered in SCORE

• Banks can interact with all corporates registered in SCORE

CORPBIC1

CORPBIC2

CORPBIC3 Your institution

SCORE Standardised Corporate Environment


SCORE registration

Financial institutions (shareholders and sub-members*) can register to SCORE free of charge

Subscribe to SCORE on swift.com Test services Live services

FIN FIN

FileAct (real-time) FileAct (real-time)

FileAct (store-and-forward) FileAct (store-and-forward)

*Sub-members register by their SWIFT shareholder SWIFT for Corporates Workshop, Mauritius – 20th May 2016 58

https://www2.swift.com/formz/main/index.cfm?form_config=dynamic_emssf&form_title=SWIFTNet%20Service%20Subscription&form_service=score_fin__test__test&form_roadmap=http://www.swift.com/ordering/old_ordering_configuration/existing_customers/43718/swiftsolutions/subscribe_to/score.page

https://www2.swift.com/formz/main/index.cfm?form_config=dynamic_emssf&form_title=SWIFTNet%20Service%20Subscription&form_roadmap=http://www.swift.com/ordering/old_ordering_configuration/existing_customers/43718/swiftsolutions/subscribe_to/score.page&form_service=score_fin__live__live

https://www2.swift.com/formz/main/index.cfm?form_config=dynamic_emssf&form_title=SWIFTNet%20Service%20Subscription&form_roadmap=http://www.swift.com/ordering/old_ordering_configuration/existing_customers/43718/swiftsolutions/subscribe_to/score.page&form_service=score_file_act_real_time__test__test

https://www2.swift.com/formz/main/index.cfm?form_config=dynamic_emssf&form_title=SWIFTNet%20Service%20Subscription&form_roadmap=http://www.swift.com/ordering/old_ordering_configuration/existing_customers/43718/swiftsolutions/subscribe_to/score.page&form_service=score_file_act_real_time__live__live

https://www2.swift.com/formz/main/index.cfm?form_config=dynamic_emssf&form_title=SWIFTNet%20Service%20Subscription&form_roadmap=http://www.swift.com/ordering/old_ordering_configuration/existing_customers/43718/swiftsolutions/subscribe_to/score.page&form_service=score_file_act_store_and_forward__test__test

https://www2.swift.com/formz/main/index.cfm?form_config=dynamic_emssf&form_title=SWIFTNet%20Service%20Subscription&form_roadmap=http://www.swift.com/ordering/old_ordering_configuration/existing_customers/43718/swiftsolutions/subscribe_to/score.page&form_service=score_file_act_store_and_forward__live__live

Bank readiness certification Programme objectives

• Publish bank business capabilities over SWIFT

• Facilitate corporate reach for banks over SWIFT

• Enable corporates to increase their bank reach globally using

SWIFT

• Promote the operational and commercial capabilities across banks

• Endorse bank’s best practices for corporates over SWIFT

Payments

Cash management

Treasury

59 SWIFT for Corporates Workshop, Mauritius – 20th May 2016

Bank readiness certification Entry & Advanced comparison

Criteria Advanced certification Entry certification

Participate in SCORE Yes Yes

Receive FIN MT 101 and send MT 940 Yes Yes

Send MT 942 Yes No

Send/Receive files over FileAct* Yes* Yes*

Testing facilities & scripts Yes Yes

Operational documentation Yes Yes

Have SWIFT-knowledge and trained sales staff Yes Yes

Offer Basic commercial documentation Yes Yes

Provide a dedicated SWIFT-page on website or contact details Yes Yes

*Bank should comply with FA implementation guide SWIFT for Corporates Workshop, Mauritius – 20th May 2016 60

http://www.swift.com/assets/corporates/documents/our_solution/implementing_your_project_fileact_implementation_guide.pdf

61

Bank Readiness https://corporates.swift.com/en/certification/


www.swift.com

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