SWIFT for Corporates Corporate Treasury Management :

Shifting from an Operational to a Strategic Focus

Andre Casterman

Global Head

Corporate & Supply Chain Markets

SWIFT Business Forum London

The Brewery : 23rd April 2015

Neil Gray

Senior Sales Manager

Corporates Business – EMEA

Agenda

• Introduction

• Corporate take-up of SWIFT

• Extended portfolio of offerings

– Cloud Application Providers connected to SWIFT

– Beyond Payments and Cash Management

– Reference Data

– Easier On-boarding and adoption of Standards

– 3SKey for signing and authentication

– BPO for risk mitigation and financing

• Future roadmap

• Summary

• Introduction

• Corporate take-up of SWIFT

• Extended portfolio of offerings

– Cloud Application Providers connected to SWIFT

– Beyond Payments and Cash Management

– Reference Data

– Easier On-boarding and adoption of Standards

– 3SKey for signing and authentication

– BPO for risk mitigation and financing

• Future roadmap

• Summary

Agenda

4

SWIFT A diverse community

Corporates Insurance companies

Banks

Broker-dealers

Investment managers

Stock Exchanges

Depositories

Trustees

Clearing systems

Payment

systems

Settlement systems

Government institutions

5

SWIFT for Corporates

• Treasury Management

– Receive end-of-day statements ( .. plus intra-day reports) in a standard format

• better visibility of cash balances enables more efficient management of liquidity

– Initiate single, high-value, urgent ‘treasury’ payments

– Exchange deal confirmations (for subsequent matching)

• Payments & Cash Management

– Submit files of bulk payments / direct debits

• pay suppliers, debit customers, pay salaries & expenses…

– Receive payment status reports

– Receive account reporting information

• Additional Services – Trade Finance…

An alternative channel to access bank services

6

Managing multiple proprietary channels

can pose challenges

7

SWIFT A single standardised channel to multiple banks

• One gateway

• One network

• One security

standard

• Lower costs

• Reduced risk

• Improved control

• Better compliance

Greater efficiency & reduced costs across all

financial transactions

Improved control and visibility Improved straight-through processing end-to-end

Digitisation and automatation Dematerialised & standardised financial flows in a

multi-bank environment

Technology/Platform independence Corporates and banks can make decisions

independently of platform and technology

Accelerated decision making Timely access to information allows for faster and

better decision making

8

SWIFT for Corporates Secure Financial Communications

Channel rationalisation Streamlining the number of systems and security

mechanisms required for bank communications

Clear counterparty identification

ISO standards for counterparty identification bringing transparency to all financial transactions

• Introduction

• Corporate take-up of SWIFT

• Extended portfolio of offerings

– Cloud Application Providers connected to SWIFT

– Beyond Payments and Cash Management

– Reference Data

– Easier On-boarding and adoption of Standards

– 3SKey for signing and authentication

– BPO for risk mitigation and financing

• Future roadmap

• Summary

Agenda

Corporates on SWIFT Where do we stand today ?

Evolution of corporate registrations

EMEA

Americas

69%

21%

Asia Pacific

10%

More than 12% of the SWIFT membership is now made up of corporates

Representing more than

28,000 corporate entities

incl. from the Global 500 :

• 18 of the Top 25

• 43 % of the Global 500

2008 2009 2010 2011 2012 2013

579

726

902

1035 1208

1405

2009 2010 2011 2012 2013 2014

In 2014 some 200 corporates joined in 81 countries with businesses across 194 countries

11

Corporates by

Annual Turnover (USD)

Corporates by

Number of Relationships

with Banking Groups

Corporates on SWIFT Profile of corporates registered

11–20 Banks

24% 6–10 Banks

24%

1–5 Banks

27% $1-10Bn

30%

>$10Bn

28%

<$1Bn

42%

> 21 Banks

25%

12

800,000

900,000

1,000,000

1,100,000

1,200,000

1,300,000

1,400,000

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12

2013 2014

FIN Traffic Sent by Corporates

SWIFT for Corporates FIN traffic growth +22% (2014 vs. 2013)

2014 : 14 million FIN messages sent | 17% of total C2B+B2C FIN traffic

3,500,000

4,000,000

4,500,000

5,000,000

5,500,000

6,000,000

6,500,000

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12

2013 2014

FIN Traffic Received by Corporates

2014 : 68 million FIN messages received | 83% of total C2B+B2C FIN traffic

13

Top3 of MTs

sent

% of FIN traffic

sent

Cumulative % of

FIN traffic sent

Growth

(2014 vs 2013)

MT 101 43% 43% 26%

MT 103 34% 77% 9%

MT 300 10% 87% 14%

Top3 of MTs

received

% of FIN traffic

received

Cumulative % of

FIN traffic received

Growth

(2014 vs 2013)

MT 940 50% 50% 26%

MT 942 27% 77% 22%

MT 900 8.5% 86% 29%

SWIFT for Corporates Top FIN message types sent & received

14

250,000

350,000

450,000

550,000

650,000

750,000

850,000

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12

2013 2014

FileAct Volume Sent by Corporates

SWIFT for Corporates FileAct traffic growth +42% (2014 vs. 2013)

2014 : 5.8 million files | 28% of total C2B+B2C FileAct traffic

550,000

750,000

950,000

1,150,000

1,350,000

1,550,000

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12

2013 2014

FileAct Volume Received by Corporates

2014 : 14.7 million files | 72% of total C2B+B2C FileAct traffic

Agenda

• Introduction

• Corporate take-up of SWIFT

• Extended portfolio of offerings

– Connecting cloud-based Business Applications to SWIFT

– Beyond Payments and Cash Management

– Reference Data

– Easier On-boarding and adoption of Standards

– 3SKey for signing and authentication

– BPO for risk mitigation and financing

• Future roadmap

• Summary

Payments

Cash Management

Foreign Exchange

Trade Finance

Supply Chain Finance

Securities

Regulatory Requirements

eStatements

eBAM

Personal PKI Certificates

User Entitlements

Traceability

Single Sign-on

Payment Assurance

Faster Payments

Pre-shipment Finance

Post-shipment Finance

A/R Reconciliation

Reference Data

Global Industry Standards

Implementation Guidelines

Onboarding Tools

Dodd-Frank / EMIR / SEPA

Sanctions Screening

and Testing

Automation and compliance

Identity and mandate

management

Certainty and efficiency in the

supply chain

Secure financial communications

SWIFT for Corporates The extended portfolio of offerings

SWIFT’s Training, Consulting and Business Intelligence Services

Options for connecting to SWIFTNet

Service Bureau SWIFTNet connectivity

infrastructure owned and

operated by a third-party Apps

SWIFTNet

Users Service Bureau

VPN

In-house SWIFTNet connectivity

infrastructure owned and

operated by the customer Apps

Users

VPN SWIFTNet

17

Alliance Lite2 Simple, secure, cloud-based

connectivity owned and

operated by SWIFT Apps

SWIFTNet

Users

Internet / VPN

HSM

HSM

VPN

Lite2 AutoClient

18

Connecting cloud applications to SWIFT e.g. Payments & Cash Management Application

FIN (individual messages in MT format) Send individual payment instructions

Receive statements & other reports

Exchange FX/MM deal confirmations

FileAct (files in any format) Send bulk payment files in any format

e.g. domestic ACH formats, ISO 20022 XML…

Receive payment status reports

Receive statements in any format, e.g. BAI

Treasury

AP/AR

Cloud-based

Payments /

Cash Mgt.

Application

CORPGB2L

19

FIN (individual messages in MT format) Send individual payment instructions

Receive statements & other reports

Exchange FX/MM deal confirmations

FileAct (files in any format) Send payment files in any format

e.g. domestic ACH formats, ISO 20022 XML…

Receive payment status reports

Receive statements in any format, e.g. BAI

Treasury

Cloud-based

TMS

Application

CORPGB2L

Connecting cloud applications to SWIFT e.g. Treasury Management System

Cloud-based Business Application providers Integrating with Alliance Lite2

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Business area Description SWIFT solution

Payments High-value & bulk payments MT101

ISO 20022 pain

Cash

Management Intraday and end-of-day statements

MT9xx, MT210

ISO 20022 camt

Foreign

Exchange Deal confirmations MT3xx

Trade Finance Letters of Credit, Demand Guarantees MT798

ISO 20022 tsrv

Supply Chain

Finance

BPO based services (risk mitigation, pre- and post-

shipment financing, faster payment)

Approved payables financing (proprietary)

ISO 20022 tsmt on Trade Services Utility

All file formats

Regulatory

Requirements

Trade reporting, clearing and collateral management

(EMIR/Dodd-Frank)

MT300

All file formats

eStatements Electronic end-of-period statements All file formats, e.g. PDF

EBAM Account (opening, closing) & mandate management

(signatories, user entitlements)

ISO 20022 acmt

All file formats e.g. PDF, …

21

Secure Financial Communications Supporting a broad range of business flows

Reference Data: the challenge for Corporates

Is my supplier’s

bank SEPA-ready?

Which IBAN and

BIC correspond to

my supplier’s local

account?

Where can I find

up-to-date bank

identifiers to build my

Bank master file?

MT101 / File of Payments

Where can I find the

CHIPS UID of this

beneficiary bank?

Which is the BIC

that belongs to

this IBAN?

What is the

national clearing

code of Bank of

Taiwan?

What is the

preferred SEPA

routing path to

Banque Nationale?

What is the BIC

of this bank?

SWIFTRef : global reference data

Beneficiary’s BIC

Beneficiary’s acc.nb

Intermediary BIC

Intermed. acc. nb

Intermed. bank code

Payment system X

FIN service Y .......

ISO

SSI sort

codes

SWIFT

BA

EPC EBA

SSI

Beneficiary’s BIC

Beneficiary’s acc.nb

Intermediary BIC

Intermed. acc. nb

Intermed. bank code

Payment system X

FIN service Y .......

ISO

SSI sort

codes

EBA

SSI

SSI

SWIFT

EPC

BA

Maintaining data from

multiple sources

The

SWIFTRef Utility

vs

Traditionally

correspondents

have had to maintain

payments reference

data obtained from

different sources.

With SWIFTRef

correspondents can

now get consolidated,

accurate data through a

channel of their choice,

updated monthly/daily

in an automated way.

SSI

Flexible distribution channels To suit a variety of needs

24

XML

data feeds

(daily updates)

web services

(daily updates)

internet

internet

File download

(monthly updates)

internet

SWIFTNet

FileAct

File delivery

(monthly updates)

SWIFTNet

web services

via Alliance Access

(daily updates)

SWIFTRef products

internet

manual query tools

(daily updates)

SWIFTRef corporate adoption Continued strong demand

Corporates using SWIFT connectivity 166

Corporates not connected to SWIFT 292

Total number of corporates using SWIFTRef 458

25

SWIFT Connectivity

Systems Integration

Standards & Automation

Bank On-boarding

Contract with SWIFT

SWIFT On-boarding Solutions

Products Services Tools

SWIFT’s On-boarding Solutions help new and existing clients

go live faster with SWIFT messaging services

timeline Decision Go live

+

Future On-boarding Portal

SWIFT for Corporates On-boarding Solutions

27

SWIFT for Corporates On-boarding Solutions

Bank Readiness Certification (on web site)

Bank Onboarding Services

SWIFT Connectivity

Systems Integration

Standards & Automation

Bank Onboarding

Contract with SWIFT

SWIFT Joining Process

Handholding Services

Alliance Lite2

Alliance Access

Integration Services

Project Management

Services

SWIFTRef Standards and

Market Practices MyStandards

Publication Portal

MyStandards Readiness portal

SWIFT Integration Layer (SIL)

Installation / Training Services

Remote Monitoring

Services

Format Mapping Services

SIL add-ons for manual and automated ops

28

Products

Services

Tools

Key :

29

MyStandards Strong adoption among the top 20 SCORE banks

Digital signature and authentication Typical landscape at corporates

No uniform mechanism

Different system per bank

Costly and difficult to maintain

A problem ? The solution

Multi-Bank

Multi-Country

Multi-Application

Multi-Network

Web e-Banking

Cloud applications

Cash &Treasury portals

Data sensitive applications

Internal applications

Corporate user

32

Identity and Mandate Management 3SKey for user (login) authentication

Mandate management (EBAM)

Document signing

EBAM messages

Individual authorisation of payments

corp1234567

Treasury payments

Signatory A

Threshold 100 K max

Rose Smith

Bank signatory profile

corp1234567

Treasury payments

Signatory A

Threshold 100 K max

Rose Smith

Corporate signatory profile

FileAct

Internet

Proprietary / domestic

Corporate signatory

33

Identity and Mandate Management 3SKey for user entitlements & personal approvals

113 countries

40 banking groups

~ 5,000 corporates

24,000 active users

56,000 tokens

56 application vendors

35

3SKey roll-out status

Buyer Seller

UR BPO Rules govern an

irrevocable and conditional

electronic inter-bank

payment obligation

Purchase Orders

Transport docs

Certificates

Invoices

Provision of risk &

financing services

Industry-wide BPO transaction matching

Legally binding rulebook owned by the ICC TSU

BPO

36

The Bank Payment Obligation (BPO) A strong alternative instrument for trade settlement

Provision of risk &

financing services

37

“We were able to share shipping documents with BNP-Paribas electronically

and in a matter of hours we received confirmation that they were fine.”

“In terms of ease of working, it’s very positive, and we plan to use BPOs

with full cargoes in the future.” Michael Van Steenwinkel

Global Credit Manager

BP Petrochemicals

Source: Global Trade Review

The Bank Payment Obligation (BPO) More than 50 corporate relationships already live

• Introduction

• Corporate take-up of SWIFT

• Extended portfolio of offerings

– Cloud Application Providers connected to SWIFT

– Beyond Payments and Cash Management

– Reference Data

– Easier On-boarding and adoption of Standards

– 3SKey for signing and authentication

– BPO for risk mitigation and financing

• Future roadmap

• Summary

Agenda

1. Enrich Portfolio 2. Expand Reach

Objective Deliver new value propositions for the

Corporate market

Connect more Corporates to SWIFT

across all geographies

Key business

propositions

New value propositions in Payments,

Trade, Securities, Regulatory Reporting,

Compliance.

Faster onboarding, easier adoption

through plug-and-play solutions, more

certified apps

Market position Most secure multi-bank host-to-host

channel for automated treasury

organisations

Standardised solution for multi-banked

payment initiation and account balance

reporting

Addressable market

(est. multi-bank)

6,000 corporate groups with turnover

above 1 billion USD

35,000 corporate groups with turnover

between 0.1 - 1 billion USD

Today’s footprint Concentration in EU/US/CA Limited in other geographies

39

SWIFT for Corporates Future roadmap

Key Initiatives Increase bank readiness

Increase promotional activities

Increase competitiveness

Deliver SWIFT on-boarding portal

Develop functionality for entry-level usage

Attract more local banks

An increase in Global Reach of 16%

• Americas: highest regional growth (40% vs. 2013)

• Europe: highest impact (121 vs. 107 in 2013)

Very strong FIN and FileAct growth: 22% and 42% respectively

• Traffic received by Corporates represents more than 70%

• MT940/MT942 represent 77% of all traffic received on FIN

• Half of all new corporates are mid-tier (i.e. below 1 USD Billion)

• Leading cloud treasury solution providers have adopted Lite2 to

provide the bank communications for their Business Applications

• Half of the top20 SCORE banks are adopting MyStandards

• 3SKey shows a significant adoption in the top 20 segment for

securing their e-banking portals

• The adoption of the BPO trade settlement instrument expands

from Asia to other countries incl. Germany, Belgium & Turkey

40

2014 Summary & Highlights Another year of continued strong growth

Reach

Traffic

Segments

Innovations

41

www.swift.com/corporates

Thank you…