Corporate Access to SWIFT
Stephan Kraft,
Senior Account Director, SWIFT
Agenda
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•
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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?
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
What is SWIFT?
A
co-operative
organisation
serving the
financial
industry
A
provider of
highly secure
financial
messaging
services
The
financial
standardisation
body
4
Country Coverage
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•
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4 billion messages/year
9.761 customers
209 countries
19 Mio messages peak day
(Feb2011)
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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?
6
What corporates say on SWIFT value
“… run a central platform with a
single standard for every country
and every bank”
“… achieve all objectives of
our treasury centralization
project”
Head of Treasury and Risk
Management, Iberia
“… have a standard
and reliable process
with all our banks”
VP Finance & Treasury, T-Mobile
International
“We took
SWIFT
to …
“… build one central
‘source of truth’
for banking data”
Group Manager,
Treasury, Microsoft
Group Treasury,
Petronas
“… reach all our banks directly,
with the highest security”
Head of Treasury Control and
Reporting, Novartis
Corporate Treasury Drivers
COMPLIANCE
Sub heading if required
• Regulators (SOX, SEPA)
• Internal controls
COSTS
• FTE
• Infrastructure
Automation
Standardisation
Centralisation
RISK
• Operational
• Security
LIQUIDITY
MANAGEMENT
•Where is my cash?
8
Typical corporate-to-bank messaging landscape
Today’s situation
Corporate
Accounts
payable
Accounts
receivable
VAN
host to host X
leased line
e-banking Y
Treasury
Internet
Other
e-banking Z
PSTN
“fax-banking”
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SWIFT: A secure, standardised global single
window to the financial industry
CORPHUHB
Accounts
receivable
Treasury
Middleware
Accounts
payable
SWIFTNet
Other
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SWIFTNet messaging services offering
FIN:
Store & Forward messaging
(e.g. MT101, MT940)
FileAct:
Real-time or S&F file transfer for
structured or free format files
InterAct:
Real-time or S&F messaging for
query / response and transaction input
Browse:
Online information visualisation
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Banking services
Cash Management
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/non urgent
payments and reporting
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)
Banking services
Treasury Management
Liquidity Management
Financial Risk Management
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)
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)
Banking services
Trade Finance
Import Letter of Credit
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
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)
Electronic bank account management (eBAM)
Yesterday
Today
Paper
XML messages
Supporting documents
Fax
• Slow
• Low integration
• Automated
• Dematerialised
• Expensive
• Low satisfaction
• Standardised
• Faster/cheaper
• 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
Exceptions and investigations
Beneficiary
claims non receipt
Payment
initiation
Missing information
on Beneficiary
Payment
Processing
Settlement
Cannot apply
payment
Reconciliation
Exceptions & Investigations
• 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
1st presentation - date
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Homogenous authentication beyond SWIFT
channel – 3SKey solution
• No uniform mechanism
• Different system per bank
• Costly & difficult to maintain
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•
•
•
Multi-Bank
Multi-Application
Multi-Network
Multi-Country
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The 3SKey solution in detail
(1a+b)
Corporate user obtains an inactive token
from a bank
(2)
User activates the token on 3SKey portal
(3) (4)
(5)(6)
Token associated (registered) with
several banks
1a
CRL
check
Token used to sign messages – bank
verifies signature and revocation status
2
Operates PKI and portal,
issues certificates
John = 45678
John = 45678
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1a
3
4
6
Distributes token, associates
user, verifies signatures
Activates token, associates
with bank, signs
John
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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?
19
SWIFT
Connecting the financial community
SCORE (2007)
Banks
(Founding - 1973)
MA-CUG (2001)
Clearing &Settlement
systems (1987)
Insurance IMI's
(2001)
Government
institutions
(2001)
Securities MI's
(2000)
Treasury
Counterparties
(1998)
Payments MI's
(1998)
Payment
systems (1987)
Broker-dealers
(1987)
Stock Exchanges
(1987)
Depositories (1987)
Trustees(1990)
IMI's
(1992)
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How to connect to SWIFTNet?
Overview of Options
Private
infrastructure
SWIFTNet connectivity
infrastructure owned and
operated by the customer
Shared
infrastructure
SWIFTNet connectivity
infrastructure owned and
operated by third party
Users
SWIFTNet
VPN
Apps
Users
Service Bureau
VPN
SWIFTNet
Apps
Users
Alliance Lite
SWIFTNet connectivity
infrastructure owned and
operated by SWIFT
Internet
SWIFTNet
Apps
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How to connect to SWIFTNet?
1) Private Infrastructure
Private
infrastructure
SWIFTNet connectivity
infrastructure owned and
operated by the customer
Users
VPN
SWIFTNet
Apps
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
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 minimum traffic fee = 166 EUR / month
How to connect to SWIFTNet?
2) Shared Infrastructure (via Service Bureau)
Shared
infrastructure
SWIFTNet connectivity
infrastructure owned and
operated by third party
Users
Service Bureau
VPN
Apps
SWIFTNet
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
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 minimum traffic fee = 166 EUR / month
How to connect to SWIFTNet?
3) Alliance Lite
Users
Alliance Lite
SWIFTNet connectivity
infrastructure owned and
operated by SWIFT
Internet
VPN
SWIFTNet
Apps
• 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
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* 1 message = 1 FIN MT or 1 FileAct chunk of 100 Kb
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?
25
Bank Readiness - Internal
• Bank Operational Readiness Guide:
http://www.swift.com/corporates/resources/Getting_Started/SW4C
ORP_Bank_Operational_Readiness_Guide_20090701_v2.3.pdf
26
Bank Readiness Certification Programme
27
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?
28
Making your business case
Project typically
paid back 2 x
by operational benefits
Operational
benefits
Costs
Additional
benefits
Financial
benefits
?
Better security,
more control,
…
difficult to
quantify but can
be key driver
Busine
ss
case
Business Case:
SWIFT can support
SAMPLE!!!
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Corporates on SWIFT
Where do we stand today ?
Geographical split
# registered corporate entities
726
779
Asia Pacific
579
10%
Americas
18%
402
72%
EMEA
2008
31
2009
2010
Q1 2011
Annual growth 75%
# Mbytes exchanged over FileAct (live and pilot)
Received by corporates
26,763
Sent by corporates
+ 26%
21,166
18,484 + 14,5%
15,304
+ 10%
16,905
12,717
+ 9%
10,557
6,530
8,225
9,548
14,046
32
8,774
8,580
8,936
Q2 '09
Q3 '09
Q4 '09
10,609
Q1 '10
Q2 '10
Breakdown by region and annual revenues
140
120
100
80
60
40
20
0
EMEA
AME
unknown <500M
<500K
500K-1B
500M-1B
1-10B
Revenue (in EUR)
20101005CAGmeeting_v4.pptx
A/P
>10B
Corporates on SWIFT
Breakdown by industry sector*
Connected subsidiaries are counted individually
160
General financial services
51
Automobile and parts
Support Services
40
Software and Computer Services
39
Oil & Gas Producers
29
Food Producers
28
General Industrials
27
Pharmaceuticals & Biotech
24
Industrial Transportation
22
306
Others
37 industry sectors
20101005CAGmeeting_v4.pptx
(*) Using the Industry Classification Benchmark (ICB)
German corporates connected to SWIFT
35
Austrian corporates on SWIFT
36
http://www.swift.com/corporates
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Your Contacts
T
F
M
E
W
Judit Baracs
Stephan Kraft
Country Manager Hungary
Corporate Access Specialist
SWIFT
SWIFT
Fischhof 3/6
A-1010 Vienna
Austria
Fischhof 3/6
A-1010 Vienna
Austria
+43 1 740 40 2373
+43 1 740 40 2379
+43 664 636 2073
judit.baracs@swift.com
swift.com
T
F
M
E
W
+43 1 740 40 2374
+43 1 740 40 2379
+43 664 636 2090
stephan.kraft@swift.com
swift.com
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