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Introducing SWIFT


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Introducing SWIFT

  1. 1. Introducing SWIFT<br />Global Forum on Remittances 2009<br />Laico Hotel, Tunis<br />Michael Whyte<br />23 October 2009<br />
  2. 2. Introducing SWIFT – January 2009 – Confidentiality: Public<br />2<br />SWIFT’s three dimensions – Community<br />Community<br />Standards<br />Platform<br />
  3. 3. Introducing SWIFT – January 2009 – Confidentiality: Public<br />3<br />3,8 billion messages per year (2008)<br />9,000 customers<br />209 countries and territories<br />Over 2,000 employees<br />Average daily traffic 14.8 million messages September 2009 YTD<br />Last peak day -17.8 million messages – 15 October 2008<br />SWIFT figures<br />
  4. 4. Introducing SWIFT – January 2009 – Confidentiality: Public<br />4<br />SWIFT in figuresFIN messages by market Sept. 2009 YTD<br />Trade<br />31 million msg<br />Treasury<br />160 million msg<br />Payments<br />1,357 million msg<br />1.1%<br />5.8%<br />48.8%<br />Securities<br />1,221 million msg<br />43.9%<br />
  5. 5. Introducing SWIFT – January 2009 – Confidentiality: Public<br />5<br />Payments - 5.0 %<br />Treasury -19.5 %<br />Trade -12.0 %<br />Total - 2.9 %<br />SWIFT in figuresFIN traffic evolution by market Sept. 2009 YTD<br />Securities 2.5 %<br />
  6. 6. African Countries on SWIFT 1993<br />Countries – Not connected<br />Countries connected<br />
  7. 7. Countries now on SWIFT<br />Countries connected<br />
  8. 8. Africa: RTGS Systems 2009<br />Live on SWIFT<br />Planning an RTGS <br />Live (not SWIFT)<br />No RTGS plans<br />
  9. 9. 2009 Regional RTGS Systems<br />Either COMESA or MENA <br />East African Region<br />SADC<br />West African Integration<br />
  10. 10. ACH position in Africa using SWIFT- 2009<br /><ul><li>Implementation not on SWIFT
  11. 11. Live and use SWIFT
  12. 12. Planning
  13. 13. No e-ACH
  14. 14. Not known</li></li></ul><li>Workers’ Remittances 1.0<br />A high-value service for low-value payments<br />
  15. 15. 12<br />Market overview<br />A remittance is a cross-border, person-to-person payment of relatively low value.<br />Market:<br />International migrants  200 million<br />Financial flows  USD 400 billion<br />Industry revenue  USD 15 billion<br />Annual transactions  1 to 1.5 billion<br />Average transaction value  +/- USD 300<br />
  16. 16. 13<br />Strategic importance for banks<br />The remittance transaction is:<br />a turnkey product<br />to build relationships<br />with migrant communities<br />in order to cross-sell other products<br />Positive externalities of greater involvement of the financial community:<br />leveraging economic development potential of remittances<br />Promoting financial inclusion<br />
  17. 17. 14<br />Bank options for service delivery<br />Outside of becoming a franchisee of a money transfer operator, banks have the following alternatives:<br />Option:<br />Issue:<br />Build a proprietary network<br />Cost<br />Scalability<br />Build a bilateral service with a correspondent<br />Service<br />Use open correspondent banking arrangements<br />
  18. 18. 15<br />Workers’ Remittances Objectives<br />Deliver a robust end-customer value proposition<br />time transparency<br />price transparency<br />ease of use<br />Bring scalability to bilateral bank services<br />Support any type of retail payment product<br />Remain commercially and brand neutral<br />
  19. 19. Service framework fit in the person-to-person payments ecosystem<br />16<br />Settlement Agent<br />Debtor<br />Creditor<br />Agent<br />Agent<br />Participant<br />Participant<br />Bilateral Contract<br />Bilateral Service Level Template<br />Market Practices<br />Service Levels, Product Groups, Charges & FX Practices<br />Reference Data<br />Participant and Agent Capabilities and Points of Service<br />Messaging Standards<br />Instruction, Reject, Return & Status<br />Messaging Services<br />FileActStrore & Forward 6.1<br />
  20. 20. 17<br />Market Practice Rulebook<br /><ul><li> Participants
  21. 21. Participants’ Agents</li></ul>Participation<br /><ul><li> Service levels (instant, urgent, non-urgent)
  22. 22. Two product groups (account & cash disbursement)
  23. 23. Transaction ID specification (sender defined)</li></ul>Products<br /><ul><li> OUR (DEBT) charging default
  24. 24. FX guidelines
  25. 25. Reject/returns charging practices</li></ul>Charging practice<br /><ul><li> Definition of sorting, transmission etc.
  26. 26. Transmission timing relative to service level</li></ul>Clearing<br /><ul><li> Gross bilateral settlement
  27. 27. Serial method recommended, but guidelines for Cover incl.
  28. 28. No restrictions on provider or currency choice</li></ul>Settlement<br />
  29. 29. 18<br />High-level overview<br />Rules + Guidelines<br />Architecture<br />Ref. data<br />beneficiary<br />sender<br />FileAct S&F<br />ISO UNIFI 20022<br />Distribution network<br />sending country<br />Distribution network<br />Receiving country<br />MT cover payment<br />CB<br />CB<br />Settlement <br />End-to-end service level<br />
  30. 30. 19<br />Competitive pricing: EUR 0.03 to 0.08 txn<br />Plus annual recurring fee of EUR 1,000 per participant 1<br />1 not included in business case<br />
  31. 31. 20<br />What you need to get started? <br />Business:<br />Business Agreement with counterparties<br />Application:<br />Capability to process ISO 20022 (XML)<br />SWIFT:<br />FileAct processing capabilities<br />Alliance Gateway release 6.1 or higher<br />SWIFTNet Link release 6.1 or higher<br />
  32. 32. 21<br />Benefits<br />Robust end-customer value proposition<br />time transparency<br />price transparency<br />ease of use<br />Scalable bilateral bank services<br />Any type of retail payment product supported<br />Commercial and brand neutrality<br />Bring your services and your brands to your customers, efficiently!<br />
  33. 33. 33 service participants, 13 certified live<br />ABSA Bank Limited ZA<br />Banco Africano de Investimentos AO<br />Banco BHD S.A. DO<br />Banco BISA BO<br />Banco Bolivariano S.A. EC<br />BancoDavivienda ( Bancafé ) CO<br />Banco de Guayaquil EC<br />Banco del Austro S.A. EC<br />Banco do Brasil BR<br />BancoNacional de Fomento EC<br />BancoSolidario EC<br />Banque Centrale Populaire-Maroc MA<br />BBVA Bancomer SA MX<br />China Construction Bank CN<br />Citigroup US<br />Citigroup UK<br />Codesarrollo EC<br />FinancieraCambiamos CO<br />FirstRand Bank Limited ZA<br />Giro y Finanzas CO<br />Habib Bank PK<br />ICBC CN<br />ICCREA IT<br />ICICI Bank Ltd IN<br />Ivobank UK<br />La Caixa ES<br />Macrofinanciera CO<br />Millennium BCP PT<br />Nedbank ZA<br />Russlavbank RU<br />Standard Bank of South Africa ZA<br />Standard Chartered HK<br />Wall Street Exchange Centre LLC AE<br />22<br />
  34. 34. 23<br />23<br />Questions?<br />?<br />
  35. 35. Thank you<br />24<br />