Bank Readiness & Certification Joan Lee

Director, Corporates Markets, SWIFT Asia Pacific

Americas, 21.1%

Asia Pacific, 9.5%

EMEA, 69.4%

Corporate connectivity

Connected in 81 countries

With business in 194 countries

2

73% of SWIFT-connected

corporates has more than

5 banks relationships

> 20 banks 25%

b/w 10 and 20 banks

24%

b/w 5 and 9 banks 24%

less than 5 banks 27%

1330+ Corporates on SWIFT

(+15% per annum)

Evolution of Corporate groups on SWIFT

52 119

232

407

594

819

962

1135

1336

0

200

400

600

800

1000

1200

1400

1600

2006 2007 2008 2009 2010 2011 2012 2013 2014

YoY Corporates Adoption

Corporates on SWIFT in Asia Pacific

China

• China export and credit insurance

• China Petroleum Finance

Company

• HI-P International Co ltd

• LG Electronics (China) Co.ltd.

• Cofortune Information Technology

• Sinopec Finance Co.,ltd

• Huawei Technologies Co., Ltd

• GD Midea Holding Co.,Ltd.

• Southern Petro Chemical

• China Railway

• MCC Corporation

• Minsheng Leasing

Hong Kong

• AB International Finance

• Ocean Link International

• Tradelink Electronic Commerce

• Belden Asia (Hong Kong) ltd

• Noble Group ltd

• RZB Austria Finance (Hong Kong)

• MGB Metro Group Buying HK Ltd

• Citic Pacific Hong Kong

India

• Bunge India Private Limited

• Dr. Reddy’s Laboratoreis Ltd

• Reliance Industries

Singapore

• Cargill Global Funding plc SG

• Bunge Agribusiness Singapore

• Grains and Industrial products

• Custom House Currency Exchange

• Fraser and Neave Limited

• DKSH Management Pte Ltd

• Hewlett-Packard Asia Pacific

• Keppel Corporation Ltd

• BP Singapore Pte Ltd

• Mercedes Benz – Daimler

• Wilmar International

• International SOS

• Verizon Business

• Keysight Technologies

• Swiss Overseas Enterprise

Malaysia

• Petronas Holding

• Petronas Trading Corporation

• Petronas Carigali Sdn Bhd

• Malaysian International Trading

• Malaysia LNG Sdn Bhd

• Malaysian Airlines System Berhad

• Daimler Trucks

• Mercedes Benz Services

Thailand

• Mitsubishi Fuso Truck (Thailand) Co

• Mercedes Benz - Daimler

Philippines

• Coastal Renewable Energy

• Nestle

• Mercedes Benz

• Daimler

Japan

• Matsushita Electric Industrial Co

• DIC Corporation

• Sumisho Computer Systems

• NTT Data Getronics Corporation

• Sony Global Solutions INC.

• Nikon Corporation

• Toshiba Corporation

• Nomura Financial Products

• Rakuten

• Mercedes Benz – Daimler

• Fast Retail – Uniqlo

• Recruit Holdings

Korea

• LG Electronics Inc.

• LG CNS Co.,Ltd

• LG Display

• E-Land World Limited

• Samsung SDS

• Samsung CNT

• Samsung SDI

• Mercedes Benz – Daimler

Australia

• Wesfarmers Limited

• Gold Corporation

• Mercedes Benz – Daimler

• Kimberley Clark

• Citic Pacific Australia

• Incitec Pivot

• Fortescue Metals

• One Steel

• SKM

New Zealand

• New Zealand Railways

• Fonterra

4

5

2014 (full year) FIN sent:

• 14 million messages

• 17% of FIN traffic

2014 (full year) FIN

received:

• 68 million messages

• 83% of FIN traffic

Corporates FIN traffic 22% Growth FIN traffic: +22% 2013 vs 2014 (full year)

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

Received by Corporates - Q4 2014 vs Q4 2013: +19%

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

Sent by Corporates - Q4 2014 vs Q4 2013: +17%

6

Corporates ISO 20022 FileAct traffic 42% Growth

2014 (full year) FileAct

sent:

• 5.8 million files

• 28 % of FileAct traffic

2014 (full year) FileAct

received:

• 14.7 million files

• 72% of FileAct traffic

FileAct traffic: +42% 2014 vs 2013 (full year)

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

Sent by Corporates - Q4 2014 vs Q4 2013: +42%

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

Received by Corporates - Q4 2014 vs Q4 2013: +35%

Why are corporates connecting to SWIFT?

Drivers for Corporate Banking Connectivity

• Aggregation of accounts worldwide

• Intra-day / end of day balance

• Cash forecasting for borrowing and investment activities

• Payment factories (A/P consolidation)

• Treasury centralization

• Consolidation of Bank relationships

• ERP / TMS consolidation

• Secure and resilient connectivity to banks

• ISO 20022 standards

Centralization and consolidation

Multibank cash reporting

Compliance and risk management

• Straight-through-processing

• Low TCO

Automation

7

8

Corporate

Accounts

payable

Accounts

receivable

Treasury

Other

SWIFT

server

SWIFT: a single, standardised gateway

Corporate

e-banking Y

host to host X

e-banking Z

VAN

Internet

Leased

line

Accounts

payable

Accounts

receivable

Treasury

Other

Multiple bank channels Single, standardised gateway

• Lower cost

• Transparency and view on cash

• Increased control and security

• Reduced risk

• High cost

• No global visibility on cash

• Impossible to centralise

• Challenge of multiple connectivity channels and formats

ERP

SWIFT

Server in house

Typical implementation – Cash & Treasury

FIN (individual messages)

Payments (MT101), statements

(MT940/2) and FX confirmations (MT3xx)

FileAct (File transfer)

Transport any format; payments files,

iDOC, ISO 20022, ACHs, BAI formats, …

SWIFTNet

ERP(s) ERP(s)

Treasury

Workstation

9

Bank

Bank

Bank

Bank

Bank

SWIFT 2013

Corporate in house setup

Bank adoption overview

10

Bank adoption

1,720 banks (BIC8) offering

SCORE corporate connectivity

652 Banks (BIC 8) certified

53 Groups

120 countries

11

Regional take up

Asia Pacific

500+ banks

300+ corporate groups

12

Certified banks in Asia

13

Certified Banks in Indonesia

Asia Pacific

300+ corporate groups

108 Banks certified

Indonesia

9 banks certified • Bank of America Merrill lynch

• The Bank of Tokyo-Mitsubishi

UFJ

• JP Morgan Chase

• Citibank

• Deutsche Bank

• HSBC

• The Royal Bank of Scotland N.V.

• Standard Chartered Bank

• PT Bank Sumitomo Mitsui

“SWIFT connectivity has grown in popularity amongst corporates

worldwide, and since CMB introduced corporate connectivity through

SWIFT in 2008, China is no exception. There are two groups of customers

that we find are most attracted to SWIFT: Chinese companies with an

international growth trajectory, and foreign multinational corporations

investing in China. By implementing this, these companies enjoy a

consistent experience when communicating with their banks worldwide.”

14

Wang WeiXing, Product Manager &

Zhou MuYang, Product Manager, Cash Management,

China Merchants Bank

Companies need to work with a bank that has the experience,

expertise and value-added functionality that will help enable

them to achieve their goals. These criteria should be

paramount when corporates fine tune their banking

relationship selection process”.

15

“

Tom Durkin

Global Head of Integrated Channel Solutions

Bank of America Merrill Lynch

Why are banks getting ready to offer SWIFT for

corporate connectivity?

16

Drivers of

Change Perceived as

Innovator

with new

efficient channel

for multi-bank

corporates

New

Opportunities of

Business

Growth

Technology

Transformation as

Key Enabler

Focus resources

on

internal strategic

valued-add

client solutions

Getting ready for corporate messaging Bank Readiness Certification

SWIFT for Corporates

17

Is your bank ready for SWIFT for Corporates?

It is a standardised corporate environment on SWIFTNet

It is based on a closed user group

It is administered by SWIFT

Corporates can interact with all banks registered in SCORE

Banks can interact with all corporates registered in SCORE

CORPBIC1

CORPBIC2

CORPBIC3 Your institution

SCORE

Standardised

Corporate

Environment

Business solutions in SCORE

Business area Description SWIFT solution

Payments High-value & bulk payments MT 101

ISO 20022 pain

Cash

Management Intraday and end-of-day statements

MT 9xx, MT 210

ISO 20022 camt

Foreign

exchange Deal confirmations MT 3xx

Multi Asset

Class Matching FX/MM, Derivatives, Commodities, Securities MT 3xx, MT 5xx, MT 6xx

Trade Finance Letters of Credit, Demand Guarantees MT 798

ISO 20022 tsrv

Supply Chain

Finance

BPO based services (risk mitigation, pre/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)

MT 300

All file formats

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

eBAM Account (opening, closing) and mandate management

(signatories, user entitlements)

ISO 20022 acmt

All file formats e.g. PDF, …

Portfolio of Industry Standards supporting your various business flows*

*Non-exhaustive list of business flows 19

SCORE registration Financial institutions (shareholders and sub-members*) can register to SCORE free of charge

Subscribe to SCORE on swift.com

Test services Live services

FIN FIN

FileAct (real-time) FileAct (real-time)

FileAct (store-and-forward) FileAct (store-and-forward)

*Sub-members register by their SWIFT shareholder

Most commonly used messages

FIN

MT940 - Customer Statement (3 million statements

sent by AP banks in 2014)

MT942 - Interim Transaction Report (4 million

reports sent by AP banks in 2014)

MT101 - Request for Transfer

MT300 - FX Confirmation

MT320 - Fixed Loan/Deposit Confirmation

MT910 - Confirmation of Credit

MT900 - Confirmation of Debit

FileAct (0.5 million files transferred in 2014 between

AP banks and global corporates)

Payment instruction - MT101, MX pain

Reporting - MX camt, MT940

21

Bank readiness certification Programme objectives

• Publish bank business capabilities over SWIFT

• Facilitate corporate reach for banks over SWIFT

• Enable corporates to increase their bank reach globally using SWIFT

• Promote the operational and commercial capabilities across banks

• Endorse bank’s best practices for corporates over SWIFT

Payments

Cash management

Treasury

22

Bank readiness certification Entry & Advanced comparison

Criteria Advanced certification Entry certification

Participate in SCORE Yes Yes

Receive FIN MT 101 and send MT 940 Yes Yes

Send MT 942 Yes No

Send/Receive files over FileAct* Yes* Yes*

Testing facilities & scripts Yes Yes

Operational documentation Yes Yes

Have SWIFT-knowledge and trained sales staff Yes Yes

Offer Basic commercial documentation Yes Yes

Provide a dedicated SWIFT-page on website Yes Yes

*Bank should comply with FA implementation guide

24

Bank Readiness https://corporates.swift.com/en/certification/

Bank Readiness to support Swift for Corporates

Standards

gap analysis

SWIFT Project Management

Functional

analysis

Integration design and

implementation

Technical

infrastructur

e review

Identify

Resources

Business

Study

Technical

requirements Testing Go-Live

Integration

project

Technical services

Standards Services

Products & services

ISO 20022

Training

2 weeks ~4 weeks 2 weeks ~8 weeks ~8 weeks 1 week

On-boarding Services

SWIFT Consulting Services provides

• Project Definition and Planning

• Workshop on technical setup, messaging standards and SCORE

• Business Intelligence on corporate messaging and benchmarking

• Training and certifying your teams as SWIFT for Corporates Specialist

24 weeks/6 months

26

Business support SWIFT readiness

Support Foreign Exchange Confirmation MT300

Support Fixed Loan/Deposit Confirmation MT 320

Support Notice to receive MT 210

Support Confirmation of Debit/Credit MT 900 / MT 910

Trade Finance MT 798

Bank Payment Obligation (BPO) TSU/BPO

ISO 20022 Payment Instructions over FileAct pain 001, 002

support ISO 20022 XML Cash Reporting messages over FileAct camt052,053,054

Standards - Implementation reference & testing capabilities MyStandards

SWIFT Certified staff “SWIFT for Corporates specialist”

certification

ISO 20022 XML Bank Account Management messages over

FileAct acmt 007 – 0021

Multi-bank single sign-on on web portals 3SKey

Accept personal digital signatures 3SKey

Comply with CGI guidelines pain, camt, acmt

Bank additional capabilities Additional SWIFT capabilities published on swift.com

26

Thank you ! SWIFT for Corporates

Website: www.swift.com/corporates

Email: swiftforcorporates@swift.com,

supplychain@swift.com

Twitter: @swiftcorporates

LinkedIn

Groups:

SWIFT for Corporates

Supply Chain on SWIFT

27 SWIFT for Corporates