Alliance Lite Sibos 2010 Amsterdam Dirk Van Achter, SWIFT Alex Ozanne, Kleinworth-Benson 25 October 2010

SWIFT hasn’t solved all your problems yet? Broker / Dealer Market infrastructure Banks / Distributors FTP Your institution Corporates Investment manager Problem: dealing with multiple institutions means dealing with multiple systems and multiple formats. No matter what you do, there is one underlying problem: too many bubbles, each with a different size and colour. Each bubble represents a different format, a different channel, a different system that you need to deal with. And this is not easy. It is time consuming, it is complex, it is fragmented In other words you have to implement manage and maintain different communications channels and different formats, which eats into your revenues and your profitability. In addition to this, as an investment manager you are dealing with an increasing number of asset types, a growing number of counterparties and escalating volumes; This in turn means you are exposed to higher risk and you have a bigger compliance burden. Custodian Funds’ administrator/ Transfer agent Regulators

Multiple counterparties Where it hurts Multiple counterparties Multiple connections Lack of standards Manual processing Problem: lack of standards, manual processing, paper based, Increasing volumes have exposed and created numerous areas of operational inefficiencies and raised the cost of back-office support. It is very hard to monitor the status of your instruction, manual processing is error-prone and is costly, in terms of financial and human resources not to mention the risk that you are faced with. This is where it hurts.. FAX/Paper-based Increasing volumes Regulations

Multiple Counterparties – One Connection Broker/ Dealer Custodian Regulators Funds’ Administrator/ Transfer Agent Investment Manager Market Infrastructure Corporates Banks/ Distributors Multiple Counterparties – One Connection Broker / Dealer Market infrastructure Banks / Distributors FTP Corporates Investment manager Problem: dealing with multiple institutions means dealing with multiple systems and multiple formats. No matter what you do, there is one underlying problem: too many bubbles, each with a different size and colour. Each bubble represents a different format, a different channel, a different system that you need to deal with. And this is not easy. It is time consuming, it is complex, it is fragmented In other words you have to implement manage and maintain different communications channels and different formats, which eats into your revenues and your profitability. In addition to this, as an investment manager you are dealing with an increasing number of asset types, a growing number of counterparties and escalating volumes; This in turn means you are exposed to higher risk and you have a bigger compliance burden. Custodian Funds’ administrator/ Transfer agent Regulators

Getting your low volume counterparties on SWIFT Easy Secure Low cost Worldwide Great but how can you get all your counterparties onto SWIFT ? Standardised ...many issues, one global solution! Easy SWIFT access using Alliance Lite

Product AutoClient Business Integration Manual Browser Interface SWIFT Web server SSL Work flow SWIFTNet Interface security token AutoClient Business Integration Manual Browser Interface SWIFT Security SWIFT Managed SWIFT Messaging SWIFT Community Alliance Lite Customer Internet Alliance Lite Central Infrastructure SWIFT Network Counterparties

Who is it for? New low volume SWIFT customers Average < 200 items sent & received per day (< 4000 items/month) 1 item = 1 SWIFT message or 1 chunk (< 100 KB) of a FileAct file Current release: All types of institutions Banks & Financial Institutions Corporates Funds Distributors & Funds Transfer Agents Investment Managers, Broker / Dealers Next release Browse services Members of market infrastructures (e.g. TARGET2) Q1 2011 SWIFT message = 1 MT or 1 MX message FileAct files can be max. 20 MB size FileAct files are counted in chunks of max. 100 KB. Example : a FileAct files of 250 KB would be counted as 3 chunks (3 items).

Distribution One box with 10 tokens and 1 CD Quickstart instructions Install in 5 minutes Includes Own BIC on SWIFTNet BICplusIBAN directory built-in Free training and documentation

Easy to Order Easy Alliance Lite Easy to Install Easy to Use

Join SWIFT and Order Alliance Lite Click to fill in the single order form No need for username/password to access it

Easy to Order Easy Alliance Lite Easy to Install Easy to Use

The only thing you need to connect to SWIFT

Easy to Install

Easy to Order Easy Alliance Lite Easy to Install Easy to Use

Alliance Lite – Browser Interface PowerPoint Toolkit – 23 October 2008 – Confidentiality: restricted

www.swiftalliancelite.com

Plug your SWIFT USB Token in the USB slot of your PC You will be requested to enter password of USB Token

Support for different SWIFT Message Types

IBAN to BIC look-up

Search, filter, drill-down Multi-page Print Easy to use reports

Save in file format of your choice

Alliance Lite - AutoClient PowerPoint Toolkit – 23 October 2008 – Confidentiality: restricted

Alliance Lite AutoClient Your counterparties FIN MX FileAct RT SWIFTNet Alliance Lite Central Infrastructure Internet File containing any MT Messages CSV file File with any content Alliance Lite customer

Alliance Lite: Attractive Price Model

Price As of €200 / month Pay-as-you-go €200/month plus €1 per item All-inclusive Flat Fee €850/month includes 4000 items/month Wholesale & Resale Volume Discounts As of €200 / month

Attractive Pricing 1 EUR/item 850 200 Monthly billing 650 4,000 EUR/month 1 item = 1 MT or MX, or 1 FileAct chunk of 100 KB, sent or received 1 EUR/item 850 Flat Fee Pay as you go 200 Monthly billing Items/month 650 4,000 Subscription for 1 year, tacitly renewed, cancellation with 3 months notice A pay-as-you-go customer surpassing flat fee for 3 months in a row will be offered to switch

A Channel Island Initiative: A Bank’s Perspective

The Channel Islands, including Guernsey and Jersey are major offshore finance centres Consisting of nearly 100 Banks providing a diverse range of Banking Services including retail banking, total wealth management, foreign exchange, also supporting other financial services businesses operating in the Islands including: Fiduciary Services providing trust and corporate services to private client, corporate and institutional businesses Investment Business providing a range of services including stock broking, investment advice and management, promotion, fund management and administration, and custody of assets to an international clientele Insurance Business providing a range of insurance products and services, ranging from captive insurance company structures to intermediary services

Connecting the Financial Community Corporates Stock Exchanges Kleinwort Benson Broker-dealers Investment managers Banks Fiduciary Services Settlement systems Government institutions Clearing systems

How we use SWIFT for payments Paying Bank Kleinwort Benson Sender’s Correspondent MT103 Customer Transfer Receiving Bank Bank of Jersey Typical MT103 USD Payment ( non cover) Receiver’s Correspondent

Corporate Payment / Customer Transfer Sender’s Correspondent Trust Company Paying Bank Telephone Fax Letter Multi Online Systems Receiver’s Correspondent Receiving Bank Beneficiary Online Statement Paper Statement

Online Banking Bank 1 Trust Company Bank 2 Bank 3

SIBOS 2008 Vienna SWIFT announced: Launch of Alliance Lite: Targeted at financial institutions and corporates with low-volume payment requirements Change of joining criteria to allow smaller regulated institutions to join the SWIFT network

SWIFT payment / Customer transfer Sender’s Correspondent Trust Company Paying Bank Alliance Lite Receiver’s Correspondent Beneficiary Receiving Bank SWIFTNet caters for third party non repudiation. In case of dispute on content or time SWIFT can arbitrate in quality of third and neutral party.

Integrating to SWIFT SWIFTNet OUT Payments FIN IN Statements FileAct SWIFT Connectivity Business Application Outgoing payments in MT format files to FIN service Incoming statements in either MT940 format or downloaded from browser in Excel, Word, PDF etc Bulk messaging using to/from FileAct

Summary... from multiple proprietary bank channels… Corporate Accounts payable receivable Treasury Other Trust Company Payments “fax-banking” PSTN leased line e-banking Y Internet e-banking Z host to host X VPN

…to a single channel to multiple banks Trust Company Accounts payable receivable Treasury Other Corporate Payments SWIFTNet SWIFT Connectivity One message standard One security standard One gateway One network Lower costs Reduced risk Improved control Better compliance

Benefits for the Client Single payment interface to all your bankers and therefore... 1 user id, 1 password and 1 security token 1 standard message format for all payment types Validation at the time of input Guaranteed delivery – non repudiation Go Green – electronic statements Integration with back-office software Scalability – standard payment infrastructure for all your banks

What are the benefits for us? All payments through a single channel Standardised message format No re-keying of data – reduction of time and error Validation at the time of input – minimise call back to client STP will allow for higher volumes with no staff increase Reduction in paper statements Being “SWIFT ready” makes us competitive in the market

What delighted customers say “Much better than what we have at the moment.” “This is the first time I can ever hope to become and afford to be a SWIFT member.” “You are on the verge of creating an essential communication platform.” “Alliance Lite is light.” “This makes me think of Intel Inside. You have the backbone of the financial industry which you now seem to have found a way to better exploit for the benefit of more users.” “It gives me the possibility to be part of the SWIFT network, to have that element of professionalism and security as part of my company image and reputation.” “SWIFT is a language, and Alliance Lite allows me to speak that language.”

More information? On SWIFT’s website www.swift.com/alliancelite

Questions & answers ?

Thank you 44

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