1. Corporate Access to SWIFT
Stephan Kraft,
Senior Account Director, SWIFT

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. 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?

4. What is SWIFT? A co-operative organisation serving the financial
industry A
provider of
highly secure
financial
messaging
services
The
financial
standardisation
body

5. Country Coverage 4 billion messages/year 9.761 customers 209 countries
19 Mio messages peak day
(Feb2011)
Country Coverage

6. 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?

7. What corporates say on SWIFT value
“… run a central platform with a single standard for every country and every bank”
VP Finance & Treasury, T-Mobile International
“… achieve all objectives of our treasury centralization project”
Head of Treasury and Risk Management, Iberia
“We took SWIFT to …
“… build one central ‘source of truth’ for banking data”
Group Manager, Treasury, Microsoft
“… have a standard and reliable process with all our banks” Group Treasury, Petronas
“… reach all our banks directly, with the highest security”
Head of Treasury Control and Reporting, Novartis

8. Corporate Treasury Drivers
COMPLIANCE
Regulators (SOX, SEPA)
Internal controls
Sub heading if required
COSTS
FTE
Infrastructure
RISK
Operational
Security
Automation
Standardisation
Centralisation
LIQUIDITY
MANAGEMENT
Where is my cash?

9. Typical corporate-to-bank messaging landscape Today’s situation
VAN
Accounts
payable
host to host X
leased line
Accounts
receivable
e-banking Y
Treasury
Internet
Other
e-banking Z
PSTN
“fax-banking”

10. SWIFT: A secure, standardised global single window to the financial industry
CORPHUHB
Accounts
payable
Middleware
Accounts
receivable
SWIFTNet
Treasury
Other

11. 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

12. Banking services Cash Management
High value/urgent payments and reporting
Low value/non 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 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)

13. 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)

14. Banking services Trade Finance
Import Letter of Credit
Export 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
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)

15. Electronic bank account management (eBAM)
Paper
Yesterday
Today
XML messages
Supporting documents
Fax
Slow
Low integration
Expensive
Low satisfaction
Automated
Dematerialised
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 since end 2009
TODAY
Managing bank accounts involve physical transfer of documents and person to person communication. It therefore results in manual processing (which is costly, slow and subject to human error) within Banks and Corporates who have to rekey exchanged information into their back office systems and/or ERP’s.
Moreover, corporates working with different banks have to adapt to each bank process/set of documents. Very little harmonisation exists between banks. This statement remains also partially valid between banks from a same Banking Group.
Process steps cover
Opening accounts: supporting doc’s are numerous and process can take up to 3 weeks to completion as mainly paper based today. Frustration is high on the corporate side, what banks are willing to fix
Account maintenance: in terms of volumes, the most important and mainly refers to maintenance of mandates and signatories. On average, volume of activities is 4 times more than account opening. Today can take up to 2 weeks to complete.
Account closing: not to be under estimated as closing an account may impact existing bank accounts structure such as pooling. Volume wise, about the same as account opening. Can take up to 1.5 weeks to complete. Main issue here is lack of confirmation by the banks the account is properly closed

16. Exceptions and investigations
Beneficiary claims non receipt
Missing information on Beneficiary
Cannot apply payment
Payment initiation
Payment Processing
Settlement
Reconciliation
Exceptions & Investigations
Scope: modification/cancellation, claim non receipt, unable to apply
Key components: ISO standards on InterAct
Key benefits: reduced enquiry cost, improved STP, faster reconciliation, improved treasury management
1st presentation - date

17. Homogenous authentication beyond SWIFT channel – 3SKey solution
ALL BANKS
Multi-Bank
Multi-Application
Multi-Network
Multi-Country
In practice, banks and their corporate clients must often manage and use multiple and different types of personal signing mechanisms (for example, multiple tokens or smartcards with different passwords). Using and maintaining different authentication methods in parallel adds to the complexity and leads to higher operational risk and cost.
No uniform mechanism
Different system per bank
Costly & difficult to maintain

18. The 3SKey solution in detail
(1a+b) 1a
Corporate user obtains an inactive token from a bank 2
User activates the token on 3SKey portal
(2)
John = 45678 3 4
Token associated (registered) with several banks
(3) (4) 5
CRL check
Token used to sign messages – bank verifies signature and revocation status
(5)(6) 6
Operates PKI and portal, issues certificates
Activates token, associates with bank, signs
Distributes token, associates user, verifies signatures
John

19. 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?

20. SWIFT Connecting the financial community
Banks (Founding )
Payment systems (1987)
SCORE (2007)
MA-CUG (2001)
Clearing &Settlement systems (1987)
Insurance IMI's (2001)
Broker-dealers (1987)
Government
institutions (2001)
Stock Exchanges (1987)
Securities MI's (2000)
Depositories (1987)
Treasury Counterparties (1998)
Trustees(1990)
Payments MI's (1998)
IMI's (1992)

21. How to connect to SWIFTNet? Overview of Options
Users
Private infrastructure
SWIFTNet connectivity infrastructure owned and operated by the customer
SWIFTNet
VPN
Apps
Shared infrastructure
SWIFTNet connectivity infrastructure owned and operated by third party
Apps
SWIFTNet
Users
Service Bureau
VPN
Users
SWIFTNet
Internet
Alliance Lite
SWIFTNet connectivity infrastructure owned and operated by SWIFT
Apps

22. How to connect to SWIFTNet? 1) Private Infrastructure
SWIFTNet connectivity infrastructure owned and operated by the customer
Apps
SWIFTNet
Users
VPN
Infrastructure:
SWIFT Entry Kit (One-time EUR, recurring EUR/year)
Registration Fees:
1,250 EUR for BIC
2.000 EUR for SWIFT Closed User Groups
MA-
Traffic:
FIN: between (reporting) and EUR (international, non-reporting) per chargeable unit
File Transfer: max EUR per payment
minimum traffic fee = 166 EUR / month

23. How to connect to SWIFTNet
How to connect to SWIFTNet? 2) Shared Infrastructure (via Service Bureau)
Shared infrastructure
SWIFTNet connectivity infrastructure owned and operated by third party
Apps
SWIFTNet
Users
Service Bureau
VPN
VPN
Infrastructure:
SWIFT Essential Kit (One-time EUR, recurring 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 (reporting) and EUR (international, non-reporting) per chargeable unit
File Transfer: max EUR per payment
minimum traffic fee = 166 EUR / month

24. How to connect to SWIFTNet?
3) Alliance Lite
Users
SWIFTNet
Internet
Alliance Lite
SWIFTNet connectivity infrastructure owned and operated by SWIFT
VPN
Apps
Infrastructure, Registration and Traffic combined
2 available Pricing models:
Flat fee: 850 EUR/month (including 4000 msg.*/month sent & received) EUR/additional message
Pay as you go: 200 EUR/month EUR/message
* 1 message = 1 FIN MT or 1 FileAct chunk of 100 Kb

25. 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?

26. Bank Readiness - Internal
Bank Operational Readiness Guide:

27. Bank Readiness Certification Programme

28. 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?

29. Making your business case
Additional benefits
Project typically paid back 2 x by operational benefits
Financial benefits ?
Business case
Operational benefits
Better security, more control, … difficult to quantify but can be key driver
Costs

30. Business Case:
SWIFT can support
SAMPLE!!!

31. Corporates on SWIFT Where do we stand today ?
# registered corporate entities
Geographical split
779
726
Asia Pacific
579
10%
Americas
402
18%
72%
EMEA

32. 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%
16,905
+ 9%
15,304
+ 10%

33. Breakdown by region and annual revenues
<500M
500M-1B
CAGmeeting_v4.pptx

34. Corporates on SWIFT Breakdown by industry sector*
Connected subsidiaries are counted individually
160 51 40 39 29 28 27 24 22
306
37 industry sectors
CAGmeeting_v4.pptx
(*) Using the Industry Classification Benchmark (ICB)

35. German corporates connected to SWIFT

36. Austrian corporates on SWIFT

38. Your Contacts Judit Baracs Stephan Kraft Country Manager Hungary
SWIFT Fischhof 3/6 A-1010 Vienna Austria
swift.com T F M W E
Stephan Kraft
Corporate Access Specialist
SWIFT Fischhof 3/6 A-1010 Vienna Austria
swift.com T F M W E