PEPPOL Conference, Malmö Stakeholder Roundtable for VANs, Middleware, ERP Software, Banks and Other Service Providers 9th February 2010 The CBI Consortium and its value in the national and international landscape Giacomo Paci CBI Consortium

2 CBI Consortium and CBI Service CBI main assets CBI Community Network Infrastructure Standardisation activities Agenda The CBI Consortium and its value in the national and international landscape The CBI competence center supporting new challenges E-invoicing Integration in the financial value chain The CBI Entry Point for Public Administration

3  CBI Consortium (Customer to Business Interaction) was established on May 2008 to continue the activity developed by the ACBI (Association for the Interbank Corporate Banking), that was started up in 2001  The Consortium defines the technical rules and standards of the CBI Service (Interbank Corporate Banking) and manages a network infrastructure in order to support the relations among the different parties of the CBI community  CBI Service allows “multibank” users (i.e. users holding accounts on 2 or more different banks) to exchange financial messaging with all their banks  CBI Service enables end-to-end communication among users (i.e. e-invoice exchange, see next slides) CBI Consortium and CBI Service Entry Point Overview

4 What is CBI? Standardisation body Definition of CBI Service rules, technical standards for C2B and regulatory framework Network infrastructure Electronic connection via a unique front-end solution End-to-end communication among CBI users Access to more than 35 advanced functions, related to: - Payments and collections - Document management (e.g. e- Invoicing) - Reporting 2 3 CBI Stakeholders’ Forum to share business needs of CBI Service end-users as companies, public entities, … The CBI (Customer to Business Interaction) Consortium has developed three value added assets Community Public Administration Companies Financial Institutions Technical Processors Participants 1 CBI Users

, , , ,000 CAGR 12% 85.1% 85.6% 79.6% 72.5% 70.3% CAGR 2,8% 622 Financial Institutions Banks adhering to CBI cover more than 85% of the Italian Banking System There are ~ 800,000 corporates that are already connected to CBI 800,000 Source: CBI reports The CBI Community Users P.A. Trade associations (e.g. software vendors) Financial Institutions

6 Clearing & Settlement CBI User FinancialInstitution  User User  FinancialInstitutionUser  User (E2E) Area 1: Customer-Access Bank Area 2: Interbank area under CBI governance Area 3: Interbank area for C&S Access Financial Institution Executing Financial Institution Receiving Financial Institution CBI network and End-to-End communication Highly flexible network, able to evolve and adapt to new market evolutionary trends (e.g. SEPA) and new client needs Supports interoperability and acts as gateway among national business communities CBI Network Infrastructure: service model

7 CBI Network Infrastructure: details Main components  Physical Network (connections)  Logical Network (application interface, transport services)  Directory: stores every information about Users, Banks, Technical Subjects operating on CBI network. It is used to address all messages exchanged in the CBI network infrastructure CBI Directory Network Access Point Financial Institution User

8 Standardisation: CBI functions CBI defines rules for more than 35 functions, based on international standards Innovative features enabled by the CBI Service New CBI features XML based Digital signature STP transmission Zero latency Process workflow International interoperability Document ManagementPayments and collections Reporting E2E sending/ receiving non- structured documents E2E sending/receiving structured documents (e- invoice) Invoice Financing Request XML SEPA credit transfer XML cross-border credit transfer Credit transfer confirmation to debtor and creditor SEPA Direct Debit Collection Creditor Payment Activation Request Structured statement “Intraday” balance and operations … and more

9 CBI Standard Definition  Message structure and message types  Message Workflow: how messages have to be exchanged in order to provide the function  Validation and Addressing rules  Service Level Agreements (SLAs)  Governance For each function CBI defines Invoice Financing Request workflow example 1 Invoice financing request 1 Financing Requestor 3 Invoice financing request confirmation/rejection 2 2 Executing Financial Institution Access Financial Institution 3 Invoice financing request technical validation Messages 1 2 3

10 The value of compliance Banks/ Payment Institutions Public Entities Corporates Italian Business Communities E-Invoicing Expert Group TBG1 (Supply Chain) TBG5 (Finance) Participation to RMG & SEG SEPA Schemes in C2B Area European e-Invoicing Framework Compliance to international best practices Active support to international WG The CBI participation in the most relevant international initiatives

11 CBI standards in ISO20022 ISO20022 is the reference for international financial messaging Italian best practice in service registration into the ISO Repository Active participation in the ISO20022 Working Groups (RMG and SEG) Repository ISO : successfully completed the process for the Invoice Financing Request registration into the ISO The CBI Consortium is currently engaged in the registration of Creditor Payment Activation Request into ISO20022 Repository Support in the evaluation of the message registration requests into the ISO Repository Full compliance of the CBI services with the ISO registered messages CBI service enabling banks to offer an innovative service which allows Creditor to send to Debtor a Payment Request (SEPA compliant), completed with the remittance information to which the credit refers

12 The CBI commitment to support the e- invoicing adoption in Italy Source: Politecnico di Milano, 2008 Politecnico study on e-Invoicing The analysis reveals as the process cost reduction could vary from 25 € to 75 € per invoice, depending on the integration and dematerialization level €/ cycle Pharma- ceutics Home appliances Consumer goods Ordering Delivering InvoicingPayment Electronic Invoicing in “a strict sense ” Electronic Invoicing in “a broad sense ”: integration and dematerialisation of the entire trade process Vertical integration Horizontal integration Seller Buyer The e-invoicing value is confirmed by the relevant benefits resulting from its adoption by the different kind of stakeholders, especially related to the full integration between the commercial and financial chains

13 CBI supporting e-invoicing  Definition of an e-invoicing standard compliant with the financial value chain messages  Definition of the CBI function aimed at enabling e-invoice exchange among CBI users trading parties Gap Analysis CBI e-invoice service model and standards Business needs National CBI Stakeholders’ Forum Main International bodies Interoperability among standards Definition of shared guidelines Harmonization of regulations OBJECTIVES Technical Standards …and others Main International initiatives E-Invoicing Expert Group (EC) Cross Industry Invoice (CII)

14 The CBI channel to send e-invoices to Public Administrations In line with other EU Countries (i.e. Denmark and Spain), in 2008 the Italian Law introduces the e-invoice obligation in the B2G domain Objectives: - Innovation and optimisation of Public Administrations - Promotion of e-invoicing adoption also in B2B domain - Overcoming barriers to e-invoicing adoption The CBI network infrastructure represents a value-added channel for the e-Invoicing transmission in the B2G domain In fact nowadays almost users are connected to CBI network Public interchange system Public Administrations Supplier Internet Other channels

15 E2E e-invoice exchange Invoice Financing Request Creditor Payment Activation Request XML SEPA Payments Payment Status and Account Reporting Coherent message structure. Use of a common data dictionary assures that the same information (e.g. account) is structured in the same way in all the messages CBI Service value proposition Buyer OrderDeliver Invoicing Financing Seller Data alignment Payment Reconciliation 1 Integration CPAR The value of process integration CBI functions

16 CBI functions integration The service enables the activation of payment orders and supports automatic reconciliation between commercial and financial data E-Invoice Statement Status report Creditor Access Bank Buyer/Debtor Seller/ Creditor Clearing & Settlement Invoice and payment reconciliation Payments Service model Debtor Executing Bank Debtor Access Bank Creditor Executing Bank

17 Gateway enabling the direct access to the CBI network by institutional players (i.e. Central Public Administration ) to receive information from the entire banking system and to instruct payments to executing banks Increase of the standardization level Cost savings and efficiency due to the dematerialization process CBI Entry Point domain Bank Corporate/ Public entities (Local Public Administrations) The CBI Entry Point as a gateway between Public Administration and Banking system Value of the CBI Entry Point Central Public Administration CBI Entry Point

18 Potential value added synergies between the CBI Consortium and PEPPOL Best practice in the standardisation (i.e. registration of 2 services into the ISO Repository) Development of different value added services addressed to support the electronic integration between Financial and Commercial chains Creation of the CBI Entry Point to support the communication between the Public Administration and the banking system Value added initiative to set up a pan-European pilot solution that, jointly with existing national solutions, facilitates EU-wide interoperable public eProcurement Any company in the EU can communicate electronically with any European governmental institution for the entire procurement process Opportunity to share experience and best practices in order to support the interoperability

Thank you CBI Consortium Giacomo Paci