Moscow Business Forum Traffic trend and cost

Andre Boico

16 April 2015

Russia FIN traffic since connection in 1989

2 SWIFT – Moscow Business Forum – April 2015

?

0

10

20

30

40

50

60

70

80

90

100

1990 1995 2000 2005 2010 2014

430% growth

in 10 years

mn sent messages

2015

10%

14%

22%

10%

-2%

7% 10%

4%

10% 11%

-5%

0%

5%

10%

15%

20%

25%

-

1,000

2,000

3,000

4,000

5,000

6,00020

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

Millio

ns

SWIFT Growth

SWIFT FIN traffic growing 11% in 2014, adding another

500 Million FIN messages. Due to continuous stronger growth in Russia, the Russian share in the total SWIFT

traffic goes up to 1.7% (versus 0.7% 10 years ago).

16% 15% 19% 18%

-5%

15%

34%

21%

43%

28%

-10%

0%

10%

20%

30%

40%

50%

-

10

20

30

40

50

60

70

80

90

100

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

Millio

ns

Russia Growth Russia

3 SWIFT – Moscow Business Forum – April 2015 Figures are based on total yearly traffic

FIN yearly traffic evolution With an average yearly growth rate of 21% over the last 15 years, Russia

outperforms SWIFT total (growing 11% on average), EMEA region (11%) and

BRICS (16%).

0%

200%

400%

600%

800%

1000%

1200%

1400%

1600%

SWIFT total

EMEA

BRICS

Russia

4 SWIFT – Moscow Business Forum – April 2015 Figures are based on average daily traffic

2014 FIN Growth Russia outperforms BRICS and total SWIFT

-10%..0% < -10% > 0% Color coding:

Total Americas Asia-

Pacific EMEA Russia BRICS

Payments 8.6% 12.3% 11.8% 6.7% 31.4% 25.0%

Securities 15.0% 10.6% 15.2% 16.3% 17.0% 16.4%

Treasury 2.4% 4.8% 4.5% 1.3% -7.3% -0.2%

Trade -2.5% -5.5% 0.2% -4.2% 3.8% 0.3%

Total 11.0% 11.1% 12.2% 10.7% 27.7% 20.7%

FIN Average Daily volumes

Actual growth Full Year 2014 vs 2013

(*) Central and Eastern Europe: Albania, Armenia, Austria, Azerbaijan, Bosnia-Herzegovina, Bulgaria, Belarus, Switzerland, Czech Republic,

Germany, Estonia, Georgia, Croatia, Hungary, Kyrgyzstan, Kazakhstan, Liechtenstein, Lithuania, Latvia, Moldova, Montenegro, Macedonia,

Mongolia, Poland, Romania, Republic of Serbia, Russia, Slovenia, Slovakia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan, Kosovo, Republic of

5 SWIFT – Moscow Business Forum – April 2015

2015 March YTD FIN Growth Off to a good start – March YTD best month ever with an average of 24.63 million

messages per day. 31 March was the first peak day of 2015 with 26,835,427

messages.

6 SWIFT – Moscow Business Forum – April 2015

PEAK DAY - 31 March 2015 26.84

18

19

20

21

22

23

24

25

26

27

Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec

2013 Actuals 2014 Actuals 2015 Actuals Best month ever

Figures are based on average daily traffic

Tra

ffic

in m

illio

ns o

f m

essages –

all

mark

ets

2015 March YTD FIN Growth - Russia

7 SWIFT – Moscow Business Forum – April 2015

230

280

330

380

430

480

Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec

2013 Actuals 2014 Actuals 2015 Actuals

Tra

ffic

in m

illio

ns o

f m

essages –

all

mark

ets

0

2

4

6

8

10

12

14

16

201

20

1

201

20

2

201

20

3

201

20

4

201

20

5

201

20

6

201

20

7

201

20

8

201

20

9

201

21

0

201

21

1

201

21

2

201

30

1

201

30

2

201

30

3

201

30

4

201

30

5

201

30

6

201

30

7

201

30

8

201

30

9

201

31

0

201

31

1

201

31

2

201

40

1

201

40

2

201

40

3

201

40

4

201

40

5

201

40

6

201

40

7

201

40

8

201

40

9

201

41

0

201

41

1

201

41

2

201

50

1

201

50

2

Millio

ns

Banking MI Securities MI SWIFT for Corporates Other

FileAct traffic – Monthly evolution Average daily number of Kchar

0

1,000

2,000

3,000

4,000

5,000

6,000

201

20

1

201

20

2

201

20

3

201

20

4

201

20

5

201

20

6

201

20

7

201

20

8

201

20

9

201

21

0

201

21

1

201

21

2

201

30

1

201

30

2

201

30

3

201

30

4

201

30

5

201

30

6

201

30

7

201

30

8

201

30

9

201

31

0

201

31

1

201

31

2

201

40

1

201

40

2

201

40

3

201

40

4

201

40

5

201

40

6

201

40

7

201

40

8

201

40

9

201

41

0

201

41

1

201

41

2

201

50

1

201

50

2

8

SWIFT – Moscow Business Forum – April 2015

0

500

1,000

1,500

2,000

2,500

3,000

201

20

1

201

20

2

201

20

3

201

20

4

201

20

5

201

20

6

201

20

7

201

20

8

201

20

9

201

21

0

201

21

1

201

21

2

201

30

1

201

30

2

201

30

3

201

30

4

201

30

5

201

30

6

201

30

7

201

30

8

201

30

9

201

31

0

201

31

1

201

31

2

201

40

1

201

40

2

201

40

3

201

40

4

201

40

5

201

40

6

201

40

7

201

40

8

201

40

9

201

41

0

201

41

1

201

41

2

201

50

1

201

50

2

Th

ou

sa

nd

s

Banking MI Securities MI CLS RMA Other

InterAct traffic – Monthly evolution Average daily number of messages

0

500

1,000

1,500

2,000

2,500

201

20

1

201

20

2

201

20

3

201

20

4

201

20

5

201

20

6

201

20

7

201

20

8

201

20

9

201

21

0

201

21

1

201

21

2

201

30

1

201

30

2

201

30

3

201

30

4

201

30

5

201

30

6

201

30

7

201

30

8

201

30

9

201

31

0

201

31

1

201

31

2

201

40

1

201

40

2

201

40

3

201

40

4

201

40

5

201

40

6

201

40

7

201

40

8

201

40

9

201

41

0

201

41

1

201

41

2

201

50

1

201

50

2

9

SWIFT – Moscow Business Forum – April 2015

0

10

20

30

40

50

60

70

80

90

100

Millio

ns

Over 95 million Payments per day FileAct Payments growth exceeds FIN Payment growth

(*) Estimated number based on assumptions (about file compression,

average nr of characters per transaction) validated with the MI’s

LVP (ACH)

FIN Payments (Cat 1, 2, 9 and copies)

10

SWIFT – Moscow Business Forum – April 2015

11

SWIFT – Moscow Business Forum – April 2015

Building the SWIFT network – Number of users

0

2,000

4,000

6,000

8,000

10,000

12,000

12

SWIFT – Moscow Business Forum – April 2015

Building the SWIFT network – Russia

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

0

100

200

300

400

500

600

700

Live Users # messages per user (secondary axis)

Nu

mb

er

of R

ussia

n L

ive

use

rs

# o

f m

essa

ge

s s

en

t p

er

use

r in

Ru

ssia

3933

4296

4576

3,600

3,800

4,000

4,200

4,400

4,600

4,800

2012 2013 2014

Number of Russian users and messages sent per user.

Number of

counterparties involved

in traffic sent from

Russia

13

SWIFT – Moscow Business Forum – April 2015

Building the SWIFT network – Corporate adoption # of connected corporate BIC8’s (Cumulative)

14

SWIFT – Moscow Business Forum – April 2015

Building the SWIFT network – LITE2 users

0

100

200

300

400

500

600

700

SWIFT Pricing Principles

SWIFT – Moscow Business Forum – April 2015

15

SWIFT Pricing Principles

SWIFT – Moscow Business Forum – April 2015

16

1. Designed to maximize usage

– Fixed Fee programme

– Point-to-point discount

– Intra-traffic Discount

2. Recognizes the contribution of large users

3. Be fair and transparent to all users

(eg. HSM migration, Lite2 at low cost, sanctions screening)

4. Reduce barriers to entry for smaller users

FIN Price before rebate

(EURcent / msg)

FIN Traffic

(Millions of msgs)

SWIFT committed to 30-50% price cut over 2010-2015

… and has reached the challenge one year ahead

17

FIN Price before rebate

(EURcent / msg)

FIN Traffic

(Millions of msgs)

0.20

0.13

0.11

0.06

-

0.05

0.10

0.15

0.20

0.25

2005 2010 2011 2014

18

Average price (Russia)

Euro/FIN message

-37 %

Russia benefitted from the price reductions over the years

-52 %

SWIFT Romania Business Forum * Figures are after Fixed Fee, point-to-point discount and before rebate

Traffic evolution vs Messaging cost evolution 2005 is used as base year

19

0

100

200

300

400

500

600

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

0

10

20

30

40

50

60

70

80

90

100

31%

528%

161%

100%

100%

traffic evolution (# FIN messages) unit cost evolution (2nd axis) messaging cost evolution

%

%

%

%

Traffic and Cost