STP in Financial Supply Chain:
Emerging Standards, Technologies &
Practices
IBA & FINSIGHT
Payments Summit 2009
Ravishankar
Group EVP & Country Head
Cash Management & Direct Banking
Financial Supply Chain Management
RTGS Transfers
Export Finance
Demand Drafts
Finished Goods
Letters of Credit
FX Trading and
Risk solution
MIS
Raw Materials
FX Remittances
Faster, Accurate,
Standard
Sales
E- Collect
Import Financing
Debit/Credit/Cards /
Electronic/Mobile
Payments
Liquidity
Services
Physical
Collections
Strictly Confidential
Cash & Bank
Balances
Investment
Management
Account Receivables
2
Supply Chain Management Challenges
Information
Multiple Countries
Payables
Receivables
Geographical
Quicker
Realization
Speed
Multiple Offices
Funds Flow Status
Confirmation
Multiple Banks
Strictly Confidential
Price
MIS
3
Supply Chain Management Solutions
Information
Centralize
Treasury
Management
Payables
Receivables
Centralize
Payments
E-invoicing &
Customized
collection solutions
Internetize
Forecasting
Enhanced security
Transition to Real
Time Standard
Data
Strictly Confidential
Cost Control
through electronic
payments
tools
Enriched MIS
4
Banks may use different formats
Bank 1
Proprietary Format
Bank 2
Customer A
Bank 3
5
…And so will Customers
Customer A
Bank 1
Proprietary Format
Customer B
Customer C
6
ISO20022 – A unified global standard
UNIFI - ISO20022
 Global Industry standard
 Inter-operability
between
Intermediaries etc.
FI’s,
Governments,
Corporates,
Being adopted and supported by banks and financial application providers all
over the world – SEPA, SWIFT, JP Morgan, SAP, Oracle, ISTH, Euro clear, etc.
Will enable clients to integrate core treasury, payable and receivable applications
with buyers, suppliers and banking partners
Advantages in Payments for clients:
Improved STP
Standardized access to the Global Payments Landscape.
Enhanced Information Capture= Better Reconciliation
Better Intra-day payment information management = enabling improved cash positioning
and reconciliation
7
ISO 20022 – What does it cover?
PAYMENTS – Credit Transfers, Cheques, Direct Debits
Services: Payment Initiation, Clearing and Settlement,
between parties
Cash management
CARDS – Debit cards, prepaid cards, charge cards and Credit cards
Services: ATM processing, transactions and messages between acquirers,
merchants & customers
TRADE SERVICES – Collections, LC, Guarantees, Documentary Credit
Services Covered – Open Account Trading, Reconciliation, Remittances, eInvoicing, pre/post shipment financing
SECURITIES – Equities, Fixed income, Funds, Derivatives
Services: Issuance, Pre-trade, Initiation, Post-trade, Clearing and Settlement,
Custody, Collateral management, account management
FOREX – Spots, Swaps, Forwards, Currency Options
Services: Pre-trade, trade, post-trade instructions and notifications, trigger
events, third party notifications, clearing and settlement
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Convergence tables for single format
TWIST
Proprietary
OAGi
ISO 20022 Core
Payment Kernel
SWIFT MT
IFX
9
ISO 20022 – Integrates Communication
Core
Payment
Kernel
IFX
IFX
Core
Payment
Kernel
10
Economic Downturn- An Opportunity to Learn
Corporates
Banks
International partnerships
Shared Service Models
Consolidation of Cash Management
Systems / Banks
SEPA
Cash Pooling
Consolidation of Bank accounts
across countries and banks
Host to Host Integration
Multiple systems
companies
Federal Reserve Bank – Equens
tie-up for US -Eur
within
group
Accounting systems to Bank systems
Standardized Formats
SWIFT, MULTICASH, EDI, BAI-2
ERP Integrations
Zero authorization
STP capability
Cross Border/Intra country Retail
Payment Platforms
Faster settlement systems
RTGS, NEFT, NECS, CTS
11
Adoption Trends
Web-enabled,
Universal
payment
channel
India Leapfrog
North
America
RTGS
NEFT
Stock Exchange Settlements
Multi-bank
access through
single, standard
open channel
West Europe,
Japan, HK,
SGP, Aus
India Laggard
B2B exchanges
B2C/P2P Payments
Direct EDI enabled
channel/Proprietary
Networks
APAC,
East/central
Europe,
Africa
Low Integration/Automation
Capability
Electronic/
Card based Payments
INDIA FUTURE :
High Integration/Automation
Capability
 ISO 20022
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Large
Business
Multi Factor
and Biometrics
Single Sign-On
Multi Security
Multi Factor
P2P, P2B,G2P,B2P
Two Factor
Small
Business
Individuals &
RTGS Online
B2B,B2C,B2G,B2E
Mid size
Business
Govt &
B2B,B2C,B2G,B2E
Cards
E-commerce
E-commerce
E-commerce
M-commerce
Supply Chain
M-commerce
Supply Chain
Online Exchanges
13
THANK YOU