1. The Power of Business Analytics
Sibos 2010 Amsterdam
Bart Claeys, SWIFT
Neal Livingston, Standard Chartered Bank
26 October 2010

2. Agenda Your challenge Your solution
Business analytics at Standard Chartered
The power of business analytics
Q&A

3. Your challenge … which continues in 2010
2009 Market volatility and events…
Today’s financial industry is diverse and unpredictable. Staying on top of volatile market events and compliance policies requires greater accuracy, consistency and transparency in the decision-making process.
Market volatility & events
CLS
Jan: CLS aggregation goes live to address the capacity challenges faced by banks resulting from growth in FX market
May: peak volumes (1.7 million settlements in one day. Average is 1 million)
Peak volumes on Stock exchanges
Macro-economic data:
Increase of jobless claims
Rumours about extension of German prohibit on shortselling
EURO
Measurements
Interest from regulators
Basel III
Industry initiatives
trade warehouse – EU for derivatives
self-regulation
Consolidation of institutions (liquidity perspective to get group level perspective)
Revenue controlled by regulations (e.g. intra-europe correspondent banking revenue is fixed)
Control cost or attract volume
Regulations: AML / KYC (mandate to know what you send to whom + prohibiting to whom to send)
Report to regulations
… which continues in 2010

4. ? Your Challenge Get insights to respond to mission critical questions
To know where to get the insights and to trust these
And even if you know
It’s often
Incomplete
Outdated
Time consuming
Expensive
Questionable quality-wise
When each business decision is crucial, Business Analytics can arm you with objective and detailed data to help you make the best decisions for your business.

5. Our Solution
SWIFT has a solution for analysing and reporting your SWIFT messaging activity, with fast and direct access to business analytics about your company and the global financial industry
SWIFT has a UNIQUE solution for analysing and reporting your SWIFT messaging activity, with fast and direct access to business analytics about your company and the global financial industry
Reliable
Actionable
Secure
Global
Cross-market
Up-to-date
Business analytics (BA) refers to the skills, technologies, applications and practices for continuous iterative exploration and investigation of past business performance to gain insight and drive business planning.[1] Business analytics focuses on developing new insights and understanding of business performance based on data and statistical methods. In contrast, business intelligence traditionally focuses on using a consistent set of metrics to both measure past performance and guide business planning, which is also based on data and statistical methods.
Business analytics makes extensive use of data, statistical and quantitative analysis, explanatory and predictive modeling [2], and fact-based management to drive decision making. Analytics may be used as input for human decisions or may drive fully automated decisions. Business intelligence is querying, reporting, OLAP, and "alerts". In other words, querying, reporting, OLAP, and "alert" tools can answer the questions: what happened; how many, how often, where; where exactly is the problem; what actions are needed. Business analytics can answer the questions: why is this happening; what if these trends continue; what will happen next (that is, predict); what is the best that can happen (that is, optimize).[3]

6. The Power of Business Analytics: Getting Insights into the Financial Market
PowerPoint Toolkit – 23 October 2008 – Confidentiality: restricted

7. Importance of Business Analytics for Standard Chartered
Risk Mgt &
Compliance
Performance
Management
Balance Sheet &
Capital Management

8. SWIFT's Role in the Information Supply Chain
Consistent and reliable reporting
Value creator across the information supply chain
Indicator of economic and financial activity
Facilitate usage and adoption of standards
Central source of data

9. How Standard Chartered Uses Watch?
Group-wide
Management
Client &
Competition
Insights
Product & Network Management

10. Benefits in More Granular Information
Business Flow Management
Pricing & Value-Added Services
Currency
&
Value
Credit Facility Management
Continuous Improvement

11. The Bigger Picture 57A (Bene Bank) 56 (Intermediary Bank) Charge Type
(Ben/SH/Our)
Source of image: mentalfloss.com

12. Watch – Online Insights into Your Business
Watch helps you to:
Monitor global trends and see how you evolve
Optimise your relationship network and reciprocity
Perform customer risk analysis
Identify business opportunities
Benchmark your operational performance
Target cost savings

13. Watch Portfolio - Analysers Online insights into your business
On-demand analysis of data via SWIFT.com
Monthly data updates including customer data and SWIFT totals
Traffic Analyser – including your market share and all correspondents
Message Cost Analyser – helping you with cost allocation, savings & forecasting
Billing Analyser – defining your total cost of ownership in SWIFT
Market Analyser – providing your rankings and performance benchmarks
Value Analyser – providing insights into amount & currency information

14. Watch Portfolio - Reports Online insights into your business
Pre-defined reports downloaded from SWIFT.com
Monthly data updates
Today on SWIFT.com
FIN traffic distibution by market / region
FIN country market share
FIN traffic costs
FIN counterparties BIC11
More to come…
Benchmarking reports
Peer comparison
Customised reporting

15. Watch Value Analyser Online insights into amount & currency
Ordering possible NOW!
First data publication planned for December 2010
Allowing you to:
Monitor your institution’s liquidity per market, per corridor and currency
Cross-charge more effectively
Perform customer risk analysis and respond to compliance requirements
Size the opportunity to develop multi-currency products
Identify your market share per currency and its related growth vs the market
Controlling cost , STP level, correspondent banking
Basel III short and long term funding
Payment above credit line, provocing intra-day liquidity needs – adapting pricing accordingly
Peaks during the day
Visit the Watch demo stand and see a glimp of your institution’s total value

16. Watch Value Analyser Creating new insights
What is your focus?
YOU
YOUR NETWORK
THE INDUSTRY
Provide example of dummy service bureau report

17. Value Analyser Monitor your business
What is the total European import/export vs China financed through LCs?
What is the total value? For which currencies?
Source: Watch Market Analyser
European import/export vs China through LCs
MT400 collections
approx 19 billion EUR / month (estimate for September)
approx 80% is USD
USD, EUR, GBP, HKD, JPY
MT700 L/Cs
approx 145 billion EUR / month (estimate for September)
USD, EUR, JPY, AED, GBP
Did you know?
Perform a similar analysis for each business line, country, entity…

18. Value Analyser Evaluate customer reciprocity
Who are my top counterparties? Is reciprocity respected?
Transaction Amounts
Transaction Volumes
Source: Watch Traffic Analyser
“Reciprocity analysis can show different results when looking at currency or amount”

19. Value Analyser Track performance of correspondent network
How can we optimise our correspondent network?
Can we consolidate our EUR clearing activity ?
Is our correspondent compliant with bilateral currency agreements?
Can we improve our messaging efficiency?
“We are now receiving GBP payments from our counterpart. Why?”
e.g. Setup local presence or chose access to local market (counterpart) or priviliged with a bank?
e.g. exposure to Greece? Total exposure of banks (French vis-à-vis Greece)
Sensitivity of corrodor? Big volumes? Value per flow…
Payments
approx 180 trillion EUR / month (estimate for September)
Avg. value per payment (MT103) € (estimate for September)
Avg. value per payment (MT202) € (estimate for September)
Did you know?
Source: Watch Value Analyser

20. Value Analyser Perform customer/liquidity risk analysis
What is our top10 counterparty exposure? In which direction?
Is our exposure increasing/decreasing from a value perspective?
Top 10 exposure
56%
31%
of 2010 Total
Country profile analysis – political instab, best partner, more costly…
Exposure vis-à-vis legal entities, not just institution, operational level
Transaction Volumes
Transaction Amounts
Source: Watch Traffic Analyser
Perform a similar analysis for each business line, country, currency…

21. Value Analyser Benchmark against the industry
What is the market exposure towards a specific country?
How is it evolving? Do we have a similar exposure?
Should we take any measures to manage the risk?
Transaction flow evolution vs Greece
Source: Watch Market Analyser

22. Value Analyser Benchmark against the industry
What are the most common currency flows in specific corridors?
Can we leverage this information for business development purposes?
“Should we envisage developing multi-currency products in Europe?” …
“Should we adapt our pricing policy for USD payments?”
Source: Watch Value Analyser

23. Watch – Business Intelligence only from SWIFT
Key features:
SaaS model – Software as a Service
Unique source
From a neutral and trusted party
Monthly updates of high-quality data
Historical data (prior two years + current year-to-date)
Under evaluation: daily, intra-day traffic analysis
- We are the only source of data in the world
- A neutral and trusted party
- Quality is very high
- We are THE reference for FI to FI cross border flows
- We are the preferred channel for high  value and critical transaction

24. More Information Want to know more of Watch @ Sibos?
Ask your SWIFT relationship manager
Visit the Watch demo stand
Receive a sample of your institution’s currency & value data
Want to follow-up after Sibos?
Other Q&A?

25. Questions & answers ?

26. Thank you 26

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Presentation title – dd month yyyy – Confidentiality: xxx