SWIFT for Payment Market Infrastructures Short version 7 Stephane Ernst, Market Manager for HVPMIs Sep 2010

SWIFT for Payment Market Infrastructures Short version 7

Stephane Ernst, Market Manager for HVPMIs

Sep 2010

2

Basic concept of RTGS

• the continuous (real-time) settlement of funds individually on an order-by-order basis (without netting).

Real Time Gross Settlement

Settlement processing

Settlement finality

• an act that discharges obligations in respect of funds or securities transfers between two or more parties. A settlement may be final or provisional.

• settlement which is irrevocable and unconditional.

SWIFT for HVPMI Offering Presentation – Confidentiality: Public

SWIFT for HVPMI Offering Presentation – Confidentiality: Public 3

Payment transaction processing

LiquidityManagement

Participant administration

Reporting Management

Business and operational functions of RTGS

Transaction input Validation Clearing & Settlement Notification

Liquidity management Reserve management

Payment investigation

Profile management Reference data

Operational Statistical Regulatory

4

SWIFT’s 5-pillars offering for Payment Market Infrastructures

Connect

PKI,HSM

InterfacesMessagingServices

Consulting

Training

Customer Support

FIN, InterAct,FileAct,

BrowseCopy

Alliance InterfacesIntegration tools

Security

Alliance Connect

Bronze/Silver/Gold

A comprehensive solution

Your Payment Market Infrastructure system


5

Low-value payment MI

High-value payment MI

Direct Participants

Central bank

Participants

ACH

SWIFT offering for high value payments MIs

Indirect Participants

SWIFT offers

Standards (MT, MX)

Messaging (FIN, FINCopy, FileAct, FileAct Copy, InterAct, Browse, Mail)

Connectivity (SAA,SAG,SSA,SAL)

SWIFT Support

Payments processing

Cash management

Reference data

Reporting

Generic secure communication

Govt Entities

CSD


6

MT 1xx, 2xx

MT 9xx

Ordering customer

Ordering customer’s

financial institution

Beneficiary customer’s

financial institution

Payments market standards

Beneficiarycustomer

Credit Transfers (Bulk and Single)

Cash Management

Direct Debits (Bulk and Single)

Exceptions and InvestigationsC

ash

Mgm

t (A

dv &

Sta

t)

Dire

ct D

ebit

Initi

atio

n

Exc

ept

& I

nves

tigat

ions

Cre

dit T

rans

fer

Initi

atio

n

UNIFI MX

MT

9xx

MT

101

MT-based

MT

9xx

Cas

h M

gmt

(Adv

& S

tat)

Exc

ept

& I

nves

tigat

ions

MT

MX/ISO 20022

COEXISTENCE

Payments market standardsSWIFT committed to support today and tomorrow standards


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• The store-and-forward messaging service, FIN

• InterAct using MX UNIFI messages

• FINCopy is the most relevant solution for high-value payment systems wolrdwide

SWIFTNetFIN/InterActV-topology

InternalPayment system

Participant A

SWIFT interface

Participant B

SWIFT interface

Payment processing Central web server

Central institution

Payment instruction Notifica

tion m

essage

Bank A Bank B

FIN/InterAct transaction flow

Payment transaction processing:Payment per payment

SWIFTNetFIN Copy


Participant A

SWIFT interface

Participant B

SWIFT interface

Payment processing Central web serverBank A Bank B

FIN Copy transaction flow

Payment message

Payment message(settled)

Settlementrequest

Central institution

Authorisation/refusal


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• InterAct, provides interactive exchange of instructions between counterparties – Transfer funds between accounts – Change priorities of queued

payments – Modify intra-day credit limits to better

manage liquidity and collateral throughout the day in real time

• Browse, provides secure browsing to access the market infrastructures to monitor – Current positions of the settlement

account – Foreign exchange and credit risk

exposures– Transaction flow and status

Cash management and participant administration

SWIFTNet


Participant A

SWIFT interface

Participant B

SWIFT interface


Central institution

InterAct real-time information exchange

and control

Bank A Bank B

Browse onlineInfo query


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• Report management, where volume and flexible structure are essential

• FileAct is ideal for exchanges of – Large reports: business,

statistical or regulatory reports

– Raw data– Directories

• FIN Inform can supplement FIN to report transaction

Report & directory management

SWIFTNet


Participant A

SWIFT interface

Participant B

SWIFT interface


Central institution

FileAct forreporting

Bank A Bank B

FileAct forreporting

FileAct for bulk reporting



SWIFT can support a converged system using Y-topology

SWIFTNetInternalPayment system

Participant A

SWIFT interface

Participant B

SWIFT interface


Central institution

Bank A Bank B

Settlement request

Authorization/rejection

Payment file message settled

Payment file message

Settlement request

Authorization/rejection

Payment message settled

Payment message

FIN Y-topology for transaction-per-transaction payment flow

FileAct Header copyY-topology for Bulk or Batch payments flow


SWIFT can support converged system using V-topology

FIN/InterAct V-topology for transaction-per-transaction payment flow


Participant A

SWIFT interface

Participant B

SWIFT interface


Central institution

Notification message

Bank A Bank B

Payment instructions

by File

Payment instruction by transaction

FileAct V-topology for Bulk or Batch payments flow


PROJECT MANAGEMENT

End-to-end project management

SERVICE DESIGN

Requirement & Technical Design Specification

TRAINING

MI & Participant trained

SERVICE IMPLEMENTATION

Messaging Services implemented

PARTICIPANT DEPLOYMENT

Member Messaging Services implemented

SERVICE OPERATIONAL READINESS

Messaging services Go-Live

SERVICE OPERATION

Easy live

SWIFT services for payment market infrastructuresWhat

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• Ordering and provisioning (*)• Alliance portfolio installation of the MI• SWIFTNet Messaging prototyping • Integration SWIFT Alliance/application

• Member registration follow-up• Supporting documentation • Deployment of the MI

participants

• Products• MI implementation

• Testing support• Operational

procedures

Project Management

Business consulting

Technical Consulting

Implementation delivery

Training

Customer Support

• Customer support packs

• Project Management plan• Monitoring• Problem management• Reporting

• Messaging landscape analysis• Payments STP review • Technical design • Integration design• Business Continuity planning• Disaster recover process

design• Design Security Best

Practices


Delivering value and peace of mind

PROJECT MANAGEMENT

SERVICE DESIGN

PARTICIPANT DEPLOYMENT

TRAINING

SERVICE OPERATIONAL

READINESS

SERVICE OPERATION

SWIFT services for payments

Reduce Cost

Reduce Risk

Business Growth

SWIFT for PMIs - 28 October 2009 14

SWIFT support successful PMI transformationsAdopting SWIFT provides….

High-value payment MI

Central bank

Participants

Direct Participants

Low-value payment MI

ACH

Indirect Participants

CSD

Govt Entities

Participants Direct Participants

Participants/members with

State-of-the-art Reliability, Resiliency, Security and Customer Support

Right trusted third party services

Global reach and the interoperability

Business flexibility

HVPMIs with

High resilience and securityBusiness &operational cost efficiency

Comprehensive solutionRisk reduction

Focus on core serviceGlobal and community reach


SWIFT for High value payment market infrastructures Live system market Status…

AfricaAngola Algeria BotswanaCentral African States (BEAC) EgyptGhana Kenya LesothoMauritius Morocco NamibiaSierra Leone South Africa Swaziland Tanzania Tunisia Uganda Zambia ZimbabweWest African States (BCEAO)

Asia PacificAustraliaFijiHong KongNew ZealandPhilippinesSingaporeSri LankaThailand

Central & Eastern EuropeAlbaniaAzerbaijanBosnia & HerzegovinaBulgariaCroatiaHungaryRomaniaLatvia

North AmericaCanadaUS (TCH)

Central & Latin AmericaBahamasBarbadosChileDominican Rep.ECCBEl SalvadorGuatemalaTrinidad & Tobago Venezuela

Western EuropeDenmarkEurozone (EBA-EURO1/STEP1 &TARGET2)NorwaySwedenSwitzerlandUK

Middle EastBahrainIsraelJordanKuwaitOmanUAE (DIFC)

Systems on Y Copy topology

62 systems90+ countries

62 systems90+ countries

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Thank you!


Q&A

Documents

SWIFT for Payment Market Infrastructures Short version 7 Stephane Ernst, Market Manager for HVPMIs Sep 2010