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Innovation in Global Payments: Pathways To Sustainable Growth
John Hunter
Global Product Executive for US Dollar Clearing Treasury Services J.P. Morgan
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A tipping point for payments: threat and opportunity
regulatory compliance
technology costs
cybersecurity threats
fintech disruption margin
pressure
fast
secure with minimal friction
easy
flexible
transparent
value for cost
efficient
Factors affecting the bottom line End-to-end Experience
Harnessing the network for smarter payment services
Brain Power Immediately access, aggregate and process vast data for actionable insights
Vital Signs Get a pulse on payments end-to-end and across their entire lifecycle
Consciousness Integrate payments, FX and liquidity
Connective Tissue Connect easily and in flexible ways
From payment networks to neural networks
Getting into the grey matter: how we are transforming our infrastructure
Building the foundation for a neural network
Building the foundation: one platform to serve many markets
Unique service
Unique service
Unique service
Shared services for scale efficiency
Core Engine
Building the foundation: a distributed ledger for super-charging network payments
Step One
Step three
Step Two
Book transfers Interbank flows Corporate flows
The multiplier effect across an expanding payments ecosystem
Building the foundation: partnering around the world to strengthen the network
Expanding the network into a global payments ecosystem
Harnessing the network for smarter payment services
Brain Power Immediately access, aggregate and process vast data for actionable insights
Vital Signs Get a pulse on payments end-to-end and across their entire lifecycle
Consciousness Integrate payments, FX and liquidity
Connective Tissue Connect easily and in flexible ways
From payment networks to neural networks
Processing Power Big Data Artificial Intelligence
Track & Trace SWIFT GPI
Automatic FX conversions
Just-in Time Funding Regional Priority
APIs Regional connectivity
Applying intelligence to the network for value-added services
Consciousness: solutions available today to integrate payments, FX and liquidity
Convert FX automatically • Combine payments and FX to pay beneficiaries in
their local currencies.
Fund your accounts just in time • Manage liquidity efficiently across currencies • Apply automatic FX conversion and sweep
Prioritize payments by region • Discern between future-dated payments • Stage payments by time and region • More tightly manage liquidity and payments
• Earn FX income on select cross-border payments
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2 3
4
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USD
USD Account Foreign Currency Account
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USD Account Foreign Currency Account
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FX Conversion FX Conversion
Connective tissue: Communicate simply, flexibly, and agilely Vital signs: Get a pulse on payments
Brain power: Quickly identify and thwart threats
• Requires a unified API infrastructure and strategy • Enhances client experience and serves needs
• Tracks and traces end-to-end • Automatically updates on message status
• Provides dual-channel authentication for wires via SWIFT
• Synthesizes vast data and applies business rules
8:00 AM 9:00 AM 10:00 AM 11:00 AM 12:00 PM 1:00 PM 2:00 PM 3:00 PM 4:00 PM 5:00 PM
01001001 10010010 01100101 10010011
Pay or Reject?
Payment Instructions
Balance Reporting
Applying intelligence to the network for value-added services
Industry initiatives to modernize the payments system
Real-time Payments System • Provides payment immediacy and finality with instant
confirmation and integrated information flows. • Improves control over payments and cash position. • Enables straight-through processing automation to
payments reconciliation • Gives payment visibility to reduce risk and effort for you
and your payees
Irrevocable Payment in 10
Seconds
Instant Confirmation
Same-day ACH • Speeds up settlement for a class of transactions • Provides impetus for migrating business-to-business
check payments to ACH
Last minute bill pay Emergency payroll AP payments at theend of discount
availability
Most payments Trading partnerpayments
Others
Top Use Cases for Same-Day ACH
Source: 2016 AFP Electronic Payments Study BI Intelligence November 17, 2016
ISO20022 • Migrating U.S. payments infrastructure to ISO20022
messaging standards • Enables integration of payment and information flows • Provides a basis for value-added services to clients
“…the adoption of ISO globally is no longer a matter of ‘if’ but a matter of ‘when.’”
Richard Dzina, EVP, Federal Reserve Bank of New York Source: Fedfocus, March 2016
NACHA ISO 20022 Enhanced Mapping Guide (Nov 2016) Fedwire/CHIPS rollout planned for 2020
Migration continues: are you preparing?
57%
38%
24% 19% 17%
10%
The Tipping Point for Transforming the Power of the Network
Think differently about the payments ecosystem. What actions are you taking?
The payments landscape is changing across technology, regulations, and client expectations.
Brain Power
Vital Signs
Consciousness
Connective Tissue
fast secure with minimal friction
easy flexible transparent value for cost
efficient
This presentation was prepared exclusively for the internal use of the J.P. Morgan client to whom it is addressed (including the client’s affiliates, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, certain products or services that may be provided by J.P. Morgan. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by J.P. Morgan. It may not be copied, published, disclosed or used, in whole or in part, for any purpose other than as expressly authorized by J.P. Morgan.
This presentation is confidential and proprietary to J.P. Morgan and is not intended to be legally binding. In preparing this presentation, J.P. Morgan has relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources. Neither J.P. Morgan nor any of its directors, officers, employees or agents shall incur any responsibility or liability whatsoever to the Company or any other party in respect of the contents of this presentation or any matters referred to in, or discussed as a result of, this presentation. J.P. Morgan makes no representations as to the legal, regulatory, tax or accounting implications of the matters referred to in this presentation.
The products and services described in this presentation are offered by JPMorgan Chase Bank, N.A., member FDIC, or its affiliates subject to applicable laws and regulations and service terms. Not all products and services are available in all locations. Eligibility for particular products and services will be determined by JPMorgan Chase Bank, N.A. or its affiliates.
JPMorgan Chase Bank, N.A. and J.P. Morgan Europe Limited are authorized by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
J.P. Morgan is a marketing name for the Treasury Services businesses of JPMorgan Chase Bank, N.A. and its affiliates worldwide.
J.P. Morgan is licensed under U.S. Patent Numbers 5,910,988 and 6,032,137.
© 2017 JPMorgan Chase & Co. All rights reserved.
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