STP in Financial Supply Chain: Emerging Standards, Technologies & Practices IBA & FINSIGHT Payments Summit 2009 Ravishankar Group EVP & Country Head Cash Management & Direct Banking

2 Strictly Confidential Raw Materials Sales Account Receivables Cash & Bank Balances Finished Goods Demand Drafts Letters of Credit Import Financing Physical Collections E- Collect FX Remittances Export Finance Liquidity Services Investment Management Financial Supply Chain Management RTGS Transfers MIS Faster, Accurate, Standard MIS Faster, Accurate, Standard FX Trading and Risk solution Debit/Credit/Cards / Electronic/Mobile Payments

3 Strictly Confidential Supply Chain Management Challenges Information Multiple Offices Multiple Countries Multiple Banks Payables GeographicalSpeedConfirmation Price Receivables Quicker Realization Funds Flow StatusMIS

4 Strictly Confidential Supply Chain Management Solutions Information Centralize Treasury Management Transition to Real Time Standard Data Payables Centralize Payments InternetizeEnhanced security Cost Control through electronic payments Receivables E-invoicing & Customized collection solutions Forecasting tools Enriched MIS

5 Banks may use different formats Customer A Bank 1 Bank 2 Bank 3 IFX Format Proprietary Format SWIFT MT 101

6 …And so will Customers IFX Format Proprietary Format SWIFT MT 101 Bank 1 Customer A Customer B Customer C

7 ISO20022 – A unified global standard UNIFI - ISO20022  Global Industry standard  Inter-operability between FI’s, Governments, Corporates, Intermediaries etc. 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

8 ISO – What does it cover? PAYMENTS – Credit Transfers, Cheques, Direct Debits Services: Payment Initiation, Clearing and Settlement, Cash management between parties 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, e- Invoicing, 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

9 Convergence tables for single format ISO Core Payment Kernel TWIST Proprietary SWIFT MT IFX OAGi

10 ISO – Integrates Communication Core Payment Kernel Core Payment Kernel Core Payment Kernel ISO IFX MT 101

11 Shared Service Models Consolidation of Cash Management Systems / Banks Cash Pooling Consolidation of Bank accounts across countries and banks Host to Host Integration Multiple systems within group companies Accounting systems to Bank systems Economic Downturn- An Opportunity to Learn International partnerships Federal Reserve Bank – Equens tie-up for US -Eur SEPA 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 Corporates Banks

12 Adoption Trends Web-enabled, Universal payment channel Multi-bank access through single, standard open channel Direct EDI enabled channel/Proprietary Networks North America West Europe, Japan, HK, SGP, Aus APAC, East/central Europe, Africa Low Integration/Automation Capability High Integration/Automation Capability India Leapfrog RTGS NEFT Stock Exchange Settlements India Laggard B2B exchanges B2C/P2P - Electronic/ Payments Card based Payments INDIA FUTURE :  ISO 20022

13 P2P, P2B,G2P,B2P Cards E-commerce M-commerce B2B,B2C,B2G,B2E E-commerce M-commerce Supply Chain E-commerce Supply Chain Online Exchanges Two Factor Multi Factor Multi Factor and Biometrics Individuals & Small Business Mid size Business Govt & Large Business RTGS Online Single Sign-On Multi Security

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