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Market adoption of MT798
SWIFT's Trade and Supply Chain team
La Hulpe, June 21th 2012
Facilitating multi-banking in trade finance using SWIFT's industry standards for letters of credit and demand guarantees
Agenda
• Corporates, Banks and Solution Partners adopting the MT798 standards
• Definition of Industry Standards • Industry standards enable competitive vendor solutions to interoperate • Best practices for multi-banking in trade and supply chain finance
• Issues with proprietary formats and rulebooks • Issues for banks of non-standardised multi-bank options • Issues for corporates of non-standardised multi-bank options
• Conclusion • Contact details
Market adoption of the MT798 standards 2
Corporates adopting the MT798 standards Most are already using SWIFT for payments but this is not a pre-requisite
Corporates Use of MT798 for …
Use of MT798 as …
Live Usage
Multi-bank Solution
Alcatel-Lucent Guarantees Exporter Live Surecomp
Saudi Aramco Export LCs Exporter Live In-house
ArcelorMittal International
Export LCs Exporter Live Misys
Metro Group Buying
Import LCs Importer Live In-house
Metsä Finance Export LCs Exporter Q4 2012 GlobalTrade Corporation
Safran Guarantees, LCs
Exporter and importer
Q4 2012 GlobalTrade Corporation
Voith Guarantees, LCs
Exporter and importer
Q4 2012 Surecomp
3 Market adoption of the MT798 standards
More corporates will confirm their adoption of MT798 in H2 2012
24 banks adopting the MT798 standards 12 from the top20 Trade banks
4 Market adoption of the MT798 standards
All leading Trade Finance vendors are accredited by SWIFT
SWIFTReady Trade Finance
• Bank-to-bank standards • Corporate-to-bank
standards
SWIFTReady for Corporates – Trade
Finance
• Corporate-to-bank standards
Vendor Trade Finance Solution
China Systems Eximbills
CSI BankTrade
Misys Trade Innovation Plus
MIT CREDOC
Sopra Evolan IB
Surecomp DOKA 5, IMEX
Bank Corporates
Vendor Trade Finance Solution
GTC GlobalTrade Corporate
Misys Misys Trade Portal
Pinnacle Solutions Incorporated (PSI)
Synergy Trade Services (TS) Multi-bank Corporate Site
5 Market adoption of the MT798 standards
Note: Surecomp is ready but not certified in 2011
Industry standards Developed by international standardisation bodies
Industry standards are industry-owned and technology-neutral. They offer a coherent legal and operational framework.
• Trade Finance instruments (UCP600, URDG758, ISP98, URC 522, URBPO, …)
• MT standards (for L/Cs, Demand Guarantees, Collections)
• ISO 20022 standards (for BPO) • ISO 9362 Business Identifier Code (BIC) • ISO Country codes, Currency codes, …
6 Market adoption of the MT798 standards
Industry standards support end-to-end flows
Streamline the L/C, Guarantees and open account trade transactions Automate workflow of the trade life cycle to reduce cost
Accelerate handling of discrepancies and settlement Move to paperless transaction processing
Enhance visibility on credit lines
Application, amendment, …
Advising / confirming banks Sellers
MT798 ISO 20022
Advice, confirmation, amendment, …
MT798 ISO 20022
MT7XX ISO 20022
7
Internet
Issuing banks Buyers
Internet
Inter-bank flows
Market adoption of the MT798 standards
Industry standards enable competitive vendor solutions to interoperate
Message-level interoperability between various software solutions No vendor lock-in and vendor-specific process fees for banks
Increased choice of vendor solutions (competitive space) Reduced technical, operational and legal costs
Application, amendment, …
Advising / confirming banks Sellers
MT798 ISO 20022
Advice, confirmation, amendment, …
MT798 ISO 20022
MT7XX ISO 20022
8
Internet
Issuing banks Buyers
Internet
Inter-bank flows
Market adoption of the MT798 standards
Best practices for multi-banking in trade finance
Market adoption of the MT798 standards 9
Industry standards enable banks and corporates to increase efficiency and minimise costs when respecting all of the above best practices
• ICC Banking Commission's rules Rules • MT Cat4/7 standards • ISO 20022 TSMT standards Messages • Business Identifier Code (BIC or ISO
9362) for banks and corporates Identity • SWIFT for bank-to-bank (FIN and TSU) • SWIFT or Internet for corporate-to-bank Channel • SWIFTReady vendors • In-house development Solutions
Issues with proprietary formats and rulebooks
Avoid proprietary solutions and vendor lock-in
• Some Trade Finance vendors have been trying to impose their technology-specific formats and proprietary rulebooks in the C2B trade finance space – Their goal is to intermediate the corporate-to-bank contractual relationship,
which is actually not necessary as their role is at technology level – They also wish to force banks into their systems using corporate pressure – Corporates and banks adopting such platforms are locked into the vendor-
specific rules, formats and technologies – Software solutions should be independent of each other and interoperate
using Industry Standards (as it is the case for payments) • Global Trade banks have resisted adopting those proprietary solutions as each
implementation generates huge implementation and running costs (software, legal, operational, technical); usually most fees are charged to the banks whereas those solutions target the corporates
• Using Industry Standards, any change of software solution performed by one party is not impacting the other party (technology independence).
Market adoption of the MT798 standards 10
Issues for banks with non standardised multi-bank options
Market adoption of the MT798 standards 11
Scenarios:
Major issues for banks:
Corporate using a vendor platform forcing banks to adopt proprietary formats, security
and rules
Corporate re-using its FI BIC and the MT7xx
messages on the bank-to-bank FIN
service
Corporate using a vendor BIC and the MT798 standards on the bank-to-
bank FIN service
Corporate using MT798 standards with its own
BIC in SCORE
Increased vendor and
technical costs
Additional fees for banks to pay to the
vendor; additional IT integration
No fee for banks to re-use SWIFT and SCORE for
trade finance
Increased operational
costs
Additional vendor-specific operational
processes for limited number of
clients
Additional customer-specific
operational practices for banks
to develop
Single trade-specific process for all multi-bank
corporates
Increased legal
complexity and costs
Parties need to develop vendor-
specific contractual arrangements
Parties need to develop corporate-specific contractual
arrangements
Parties need to develop vendor-
specific contractual arrangements
Standardised SCORE agreement for cash and
trade
Increased KYC risks
Depends on vendor-owned legal frameworks
Lack of visibility on corporate identity, resulting with likely
KYC issues
Lack of full visibility to end-corporate identity, resulting with likely KYC
issues
Standardised SWIFT registration for corporates
and re-use of BIC by corporate
Issues for corporates with non standardised multi-bank options
12
Scenarios:
Major issues for
corporates:
Corporate using a vendor platform forcing banks to adopt proprietary formats, security
and rules
Corporate re-using its FI BIC and the MT7xx messages on the bank-to-
bank FIN service
Corporate using a vendor BIC and
the MT798 standards on the bank-to-bank FIN
service
Corporate using MT798 standards with its own
BIC in SCORE
Increased vendor and
technical costs
Need for multiple solutions when any
of the banks required do not
support the vendor platform
Proprietary development: so
packaged solutions and costs cannot be
shared
Re-use SWIFT connectivity in use for
treasury and cash management
Not following industry
standards and best practices
Dependency on single vendor solution: less
competition and technical lock-in
Not able to benefit from full MT798
functionality
Corporate does not benefit from SWIFT's FIN
Responsibility and Liability (R&L)
Single process with all banking partners
Increased legal
complexity and costs
Parties need to develop vendor-
specific contractual arrangements
Parties need to develop corporate-specific contractual
arrangements
Corporate cannot benefit from
standardised legal documentation
Standardised SCORE agreement for cash and
trade
Increased KYC risks
Depends on vendor-owned legal frameworks
Lack of visibility on corporate identity, resulting with likely
KYC issues
Lack of full visibility to corporate
identity, resulting with likely KYC
issues
Standardised SWIFT registration for corporates
and re-use of BIC by corporate
Conclusion Multi-banking in trade finance is now a reality
• All trade banks in the world use SWIFT's MT7xx standards with their correspondent banks
• The leading trade finance banks are now extending the use of those standards to the corporate world through the MT798; all leading vendors have adopted the MT798
• The MT798 can be used on any channel (Internet, SWIFT) and with any software solution; the SWIFTReady certification ensures inter-operability between competitive vendor solutions
• The growing adoption by all leading players confirms the immediate relevance of the MT798 industry standards to the trade finance market
Market adoption of the MT798 standards 13
Avoid vendor lock-in by pushing back on proprietary portals/formats
Contact our SWIFTReady Trade Finance 2011 partners
14
Partner Solution Contact
!
Joel Schrevens, Digby Bennett [email protected] [email protected] +32 475 904413
Selene Chan, James Tindall [email protected] [email protected] + 44 7941 325716
Olivier Berthier, Stephan Nouy [email protected] [email protected] +33 (0)1 53 00 70 13
Jean-Luc Spinardi [email protected] + 41 213 188 181
Marina Singlard [email protected] +33 5 6573 4651
Murray Freeman [email protected] +1 201 716 1236
Misys TI Plus
Evolan IB
DOKA 5, IMEX
Contact our SWIFTReady for Corporates - Trade Finance 2011 partners
Partner Solution Contact
!
Jacob Katsman, Nick Pachnev [email protected] [email protected] +1 416 627 8520 / +1 416 661 8520
Olivier Berthier, Stéphane Nouy [email protected] [email protected] +33 (0)1 53 00 70 13
John Nash Pinnacle Solutions Incorporated +44 7587 088 049 [email protected]
Misys Trade Portal
GlobalTrade Corporate
Pinnacle Solutions
Incorporated (PSI)
Synergy Trade Services (TS) Multi-bank
Corporate Site
Note: Surecomp is ready but not certified in 2011
Market adoption of the MT798 standards 15
Contact our MT798 bankers
Market adoption of the MT798 standards 16
Bank% CC! MT798%contact%person% Email%
Bank!of!America! US! Paul!Johnson! [email protected] Banque!Saudi!Fransi! SA! Shafeek!H.!Al<Manameen! [email protected] Bayerische!Landesbank! DE! Florian!Seitz! [email protected] BNP!Paribas! FR! Eric!Henry! [email protected] CiGbank! US! Fran!Martell! [email protected] CM!CIC! FR! Tony!Croizer! [email protected] Commerzbank! DE! Sven!Mueller! [email protected] Crédit!Agricole!CIB! FR! Patrick!Boiteau! [email protected] Danske!Bank! DK! John!Enemark! [email protected] Deutsche!Bank! DE! Frank!Bothe! [email protected] Gulf!InternaGonal!Bank! SA! Mathew!Silva! [email protected] HSBC! HK! Kate!Han! [email protected] J.P.!Morgan! US! Merlin!Dowse! [email protected]; KBC! BE! Karen!Sterckx! [email protected] LBBW!Landesbank!Baden!WürSemberg! DE! Rolf!Seidel! [email protected] Nordea! FI! Soren!Andresen! [email protected] RBS! US! Deborah!Seliski! [email protected] Riyad!Bank! SA! Medhat!Sanuri! [email protected] Samba! SA! Abdulkader!A.!Bazara! [email protected] Société!Générale! FR! Corinne!Bakok! [email protected] Standard!Chartered! SG! Ashutosh!Kumar! [email protected] The!NaGonal!Commercial!Bank! SA! Omar!Yassine! [email protected] UBS!AG! CH! Erwin!Freiburghaus! [email protected] Unicredit! AT! Markus!Wohlgeschaffen! [email protected]
Contact us now!
André%Casterman% Head!of!Trade!and!Supply!Chain!Patrick%Krekels% Legal!Counsel!Nadine%Louis% Supply!Chain!Finance!and!Business!Intelligence!Marie?ChrisAne%Diaz%Supply!Chain!Finance!David%Hennah% Supply!Chain!Finance!Aline%Henrard% Supply!Chain!Finance!Raimo%Naatsaari% Documentary!Trade!Finance!and!e<invoicing!Robert%Marchal% Standards!David%Dobbing% Standards!Angéline%Tan% Standards!Kineth%Yuen% Standards!–!Asia!Pacific!Anyal%Hozee% Partner!Management!Chris%Conn% Business!Development!–!Americas!James%Wills% Business!Development!–!Americas!Connie%Leung% Business!Development!–!Asia!Pacific!Robert%Schneider% Business!Development!–!EMEA!Urs%Kern% Business!Development!–!EMEA!MaO%Monaco% Corporate!Sales!–!Americas!Paula%Goldsmith% Corporate!Sales!–!Americas!Zelda%Anthony% Corporate!Sales!–!Asia/Pacific!Thomas%Peeters% Corporate!Sales!–!Benelux!SebasAan%Niemeyer% Corporate!Sales!–!AT/DE/CH!Arnaud%Dupuy% Corporate!Sales!–!France!
Neil%Gray% Corporate!Sales!–!UK/Ireland/Nordics!Jan%Heinsbroek% Corporate!Sales!–!Nordics!Roger%Inderbitzin% Corporate!Sales!–!Switzerland!Ashley%Schmidt% Media!RelaGons!–!Americas!Sandra%Gavard% Media!RelaGons!–!Asia!Pacific!Thea%George% Media!RelaGons!–!EMEA!
17 Email is [email protected]
18
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Market adoption of the MT798 standards