SWIFT and BizTalkdownload.microsoft.com/...event/SWIFT_jamesbibby.pdf · Microsoft BizTalk R2 Launch v1.0 Slide 19 The Australian Funds Industry Australia has the largest Funds base

Slide 1Microsoft BizTalk R2 Launch v1.0

James Bibby

Business Manager, Sales Services

SWIFT

SWIFT and BizTalk


Agenda

About SWIFT

Overview of SWIFTSolutions

Focus on SWIFTNet Funds

Funds technical considerations

BizTalk for SWIFT case studies

– BNP Paribas

– Cuscal


About SWIFT


What is SWIFT?

Platform

Industry

owned

cooperative

Standards setting

body for electronic

financial messaging

Mandated by the

United Nations

SWIFTNet

Highly secure

Highly resilient


SWIFT figures

8,195 live clients

208 countries

2.8 billion messages per year

Average daily traffic 13.1 million messages

Peak day of 15.9 million messages 31 July 2006


SWIFT history and evolution

fund administrators

MA-CUGs

banks found SWIFT

money brokers

trading institutions

- registrars & transfer agents- custody providers- trust or fiduciary services companies

investment managers

- broker/dealers- central depositories & clearing institutions- exchanges

- payments MIs- proxy voting agencies- non-shareholding financial institutions

- treasury counterparties- treasury ETC service providers

travellers cheque issuers

securities MIs

1973

2000

securities market

data providers

1996

treasury securities ETC

service providers


Payments

Trade services

Securities

Treasury

SWIFT messages by market – 2007 YTD

53%

2%39%6%


SWIFT traffic growth – 2007 YTD

Globally Australia

Payments 13.8% 14.9%

Treasury 12.3% 3.7%

Trade 1.5% -2.0%

Securities 23.3% 53.3%

Total 17% 24.6%


Pricing and traffic Harnessing economies of scale

5

10

15

20

25

30

35

40

45

50

0

500

1000

1500

2000

2500

Price

(EURcent/msg)

Traffic

(Millions of messages)

(Return)


SWIFT Partners

Solution Partners: Application providers and

business / integration consultants

Service Partners: Installation and integration

services related to connectivity

Business Partners: Marketing and selling

SWIFT interface products

Network Partners: AT&T, Colt, Orange, Infonet


Working with SWIFT Partners

4

Network

Partners

40

Service

Partners

20

Business

Partners

250

Solution

Partners


Standards SWIFTNetMarket

practice

SWIFT

A business centric approach to standards

Business process modelling

Applications Integration

Partners


SWIFTNet messaging services

– Messages with MT standards and rules

– Store-and-forward

– Feature-rich

– 8,400 clients

SWIFTNet

FIN

SWIFTNet

InterAct

SWIFTNet

FileAct

– File transfer for data intensive applications

– Standards and rules

– Store-and-forward and real-time

– Messages and query-and-response

– MX standards (XML-based) and rules

– Store-and-forward and real-time

SWIFTNet

Browse

– Secure browsing

– Complements InterAct, FileAct, and FIN


Overview ofSWIFTSolutions


SWIFTSolutions

RulesIndustry agreed market practice and R&L, with SLAs

StandardsStructured standards– SWIFT or others

SWIFTNetSWIFTNet in a SWIFT managed CUG

Mandatory

Application Provided by FIs or vendors

Partners To enable FI integration

For most

solutions


Banking Markets


Securities Markets


Focus onSWIFTNet Funds


The Australian Funds Industry

Australia has the largest Funds base in Asia Pacific with over AUD1 trillion FUM.

– This is growing at 17-25% p.a.

Significant manual processes exist including paper and faxes.

– Over 4 million faxes p.a.

A growing global investment focus

– means a truly global standard is necessary

Over 70% of Australian Fund participants representing more than 75% of total FUM already have access to the SWIFT network


Managed Funds Industry Model (Australia)

Reports:

4.5 Current Position

Custodian

Regulators

Reports:2.6 Confirmations

2.7 Holding Statements

2.8 Transaction History

2.9 Commission Accounting

2.10 Fund Valuation

2.11 Tax Statements

2.12 Agent Registration & Modification

Payment Systems

Transactions:

2.1 Initial Application (Account Opening)

2.2 Account Modification

2.3 Financial Transactions

2.4 Cancellations

2.5 Distributions

Transactions:


5.2 Account Modification Request

5.3 Depost/Redemption

5.4 Distribution

5.5Cancellations

Transactions:

7.1 Wholesale Deposit/

Redemption

7.2 Confirmations

7.3 Distribution

7.4 Transfers

7.5 Cash Accounting

7.6 Tax Reporting

7.7 Settlement

Reports:

7.8 Reconciliation

7.9 Current Position

7.10 Unit Price Information

Reports:

8.1 Investor Tax Statement

8.2 Prudential Report

Transactions:


3.2 Account Modification Request

3.3 Financial Transactions

3.4 Distributions

3.5 Cancellations

3.6 Agent Regisration & Modification

Reports:

3.7 Unit Price Information

3.8 Confirmations




3.12 Fund Valuation

3.13 Tax Statements

3.14 Sales/Market reports

Client Market

Investors

Distributors

Transactions:

1.1 Application

1.2 Deposit/Redemption

Contracts:

4.1 Prospectus

IDPS

(Master Trust / WRAP)

Managed Fund Provider

Margin Lender

Registries Asset

Manager

Transactions:

4.3 Wholesale

Deposit/

Redemption

4.4 Distribution

4.5 Unit Price

Information

Transactions:

6.1 Deposit Redemption

6.2 Distribution

Reports:

6.3 Current Positions

6.4 Unit Price

Information

Reports:

* Fund performance

* Rates of return

* Unit prices

4.2 Admin

Agreement

Reports:

5.6 Confirmations




5.10 Fund Valuation

5.11 Tax Statements

5.12 Sales/Market reports

Dealer Distribution

Dealer Group

Financial

Planner

Agencies

Life Agencies

Referral

Organisations

MarketingMarketing Financial

Planning

Product

Admin.

Product

Admin.

Investment

Management

Investment

Custody

Source: swimEC

Current focus is

on the largest

triangle of

“pain”

ISO20022

messages are

applicable

throughout the

value chain


SWIFT Net Funds - Benefits of Automation

Risk reduction : No manual errors

Operational Efficiency : Straight through processing

Volume in-sensitivity : More business, less headcount

Market Standards : Global reach, reuse, lower IT costs

Audit Trail : Neutral evidence

Regulatory Compliance : eg MiFID & Giovannini


Pilot and Market Practice Time Lines

Register

Resource allocation-technical-market practice

-Business

Order Software

Training on

software

Self test with

network

Pilot phaseAugust 27th –

Sept 7th

Post pilot

review

Provide counter-

party details to SWIFT

Determine piloting partners

Determine piloting

messages

Pilot case scenarios

-write scripts-correct

outcomes

Install and

configure software

Agree pilot

complete

SMPG Funds

working group

formulation

Decide on structure

and logistics

Review overseas

MP-UK-HK-LU

Determine AU message

flows and MP

Document AU MP

Circulate AU MP

Send to global SMPG

Pilot

Market Practice (MP)

27th August ’07

Now

Individual firm activity Group activity

Group activity

If not complete, rework

back into pilot cases

Feed pilot results

back into MP

Aug/Sept ’07


Australian Market Practice Group of 14


ImplementingSWIFTNet Funds


Project considerations

Remember that the market practice rules are as important as the technical considerations follow the Market Practice Guide

Ensure end-to-end testing is taken with your counterparties, not just internal testing

Do you have SWIFT specific knowledge? Engage Service or Solution Partner


Technical Considerations

Do you have the SWIFT infrastructure to support the solution?

Will it be automated or manual?

Integrate by developing your own application or through an off the shelf application?


SWIFTReady label programme

run by SWIFT

Label criteria are SWIFT

specific and re-evaluated

annually Two levels of

certification

Qualifies third party financial

applications as SWIFT

compliant


What does the label program cover

Designed to reflect the capability of a product to provide automation in a SWIFT environment

Core focus on evaluating support of:

– SWIFTStandards

– SWIFT messaging/connectivity

– SWIFT functionality as per the Service Definition for the SWIFTSolution


Microsoft BizTalk

Microsoft BizTalk SWIFT Accelerator

First certified in 2005

Certified SWIFTReady Financial EAI Gold for 2007


Case study 1:BNP Paribas


Business Drivers

Primary driver:

ENHANCE CUSTOMER SERVICE

Recognition of SWIFT being the common delivery platform for BNP’s clients

Standardisation and STP Capabilities

Increase security, accountability and reliability

Reduce manual processes, associated errors and associated costs


SWIFTSolution

SWIFTSolution = SWIFTNet FIN

– Significant majority of clients were already SWIFT enabled

– Clients could easily automate processing of MT messages

MT950 Statement

– to report cash movements

MT535 Statement of Holding

– to report current position of the financial instruments held for client


SWIFT Enabling

Existing portfolio management system was not SWIFT enabled.

Selected Microsoft BizTalk with the SWIFT Accelerator because:

– Automation platform for all standards

– Full support for both MT and MX SWIFT messages

– Enabled decoupling of SWIFT messaging from business application


Business Benefits

Increased service level to clients

– EOD reports based on industry standards

– STP is now easily achieved by clients

Reduced risk

– Industry leading SWIFT security

– Non-repudiation of message delivery

Reduced operational cost

– Process now fully automated

– Fewer errors, less manual intervention


Case study 2:Cuscal


Business Drivers

Risk mitigation – technology refresh

Enable clients to enter and manage RTGS payments via secure internet portal

Create a flexible payments platform to enable introduction of new SWIFT based services (e.g. international remittances)

Enable end-to-end STP, including payment cancellations and queries


SWIFTSolution

SWIFTSolution = SWIFTNet FIN

– Main feeder to Australian RTGS system is SWIFT

MT103 Single Customer Credit Transfer

– Used to make the payment

MT192/195/196 – Cancellation/Query

– Used to cancel payments, make queries and receive answers


SWIFT Enabling

Microsoft BizTalk with the Accelerator for SWIFT selected because:

– Support for all SWIFT FIN messages

– Provides workflow management

– Integrates with other systems (General Ledger and Billing)


Business Benefits

Increased customer service– Clients can now send and receive SWIFT query

messages on status of payments

Increased agility and flexibility– Will re-use services to introduce International

Remittance product to clients

Reduced risk– Integrated with internal security controls

Reduced Operational cost– Less manual handling of queries from clients


Summary


Summary

Keys to success:

Ensure your technology is SWIFTReady Certified

Ensure your people understand the standards and market rules not just the technology

Engage a SWIFT Certified Partner if you do not have the knowledge in house


&uestions

Answers

Documents

SWIFT and BizTalkdownload.microsoft.com/...event/SWIFT_jamesbibby.pdf · Microsoft BizTalk R2 Launch v1.0 Slide 19 The Australian Funds Industry Australia has the largest Funds base