The Evolution of Corporate Banking

Madhwaprasanna Gummanur, Commerical Manager, AP Corporate Sales, SWIFT

The Evolution of Corporate Banking

1

Bank Readiness

Benefits of SWIFT for Corporates

About SWIFT

Challenges for Corporate Treasurers

SWIFT for Corporates - Overview

Agenda

SWIFT is….

A co-operative

servingthe financial industry since

1973

A provider ofhighly secure

Financial Messaging

services

AFinancial

Standardisationorganization

1 0 , 0 0 0 + C U S T O M E R S S P R E A D O V E R 2 1 2 C O U N T R I E S

O V E R 2 0 M I L L I O N M E S S A G E S / D AY 9 9 . 9 9 9 % AVA I L A B I L I T Y

1,000+Corporates

+25 billionfinancial

messages per year

24 millionpeak day messages

99.999%Availability

+ 100 million

peak day batched

transaction

9,000+Financial

Institutions

Bank Readiness


About SWIFT



Agenda

What are Corporate’s Priorities?

How do I leverage technology to improve process efficiencies, lower costs, and deliver added value to my shareholders?

How do I improve my access to banking information, to support cash flow forecasting and working capital decisions?

We need help from our banks to understand if we are managing our liquidity optimally. Can we be smarter in how we utilize our internal capital to lower external borrowing?

CorporatesIf we could automate our A/P and A/R processes

I need to work with banks to understands emerging markets and regional trends (i.e. SSCs, bank-neutral SWIFT connectivity).

After we have identified an optimal solution, it is critical we work with banks for simple implementation.

How can we improve control and security especially in view of the increasingly stringent compliance requirements?

7

Corporate Challenges

• Forecasting

• Daily Cash Balance

Reporting

• Working Capital

• Currency Fluctuations

• Manual Spreadsheets

Clear Cash Visibility

8


• Avoid Manual intervention

• Automated Reconciliation

and Payment mechanism

• More Value creation

• Resource Constraints

Process Improvement & Automation

9


• Audit Control

• Compliance

• Secure Connectivity

• Token Management

Security & Risk

10


• Reduction in Infrastructure

Cost

• Increase STP

• Agnostic Connectivity

• Centralization

Reduce Cost on Infrastructure

Bank Readiness


About SWIFT



Agenda

Correspondent banks

Cash management

Treasury management

Trade Finance

Correspondent banks

Cash management

Treasury management

Trade Finance12

What is SWIFT for corporate

Standards Rules

Directories&

InformationServices

Secure IP Network (SIPN)

Interfaces

Messaging services

TestingServices

Security, Reliability, Resiliency

Treasury TradeSecuritiesPayments

13

Products and Services Overview

14

Business area Description Solution

Payments High-value & bulk payments FIN MT101FileAct for all formats e.g. ISO 20022, DTA

Cash Management Intraday and end-of-day statements FIN MT9xx, MT210

FileAct for all formats e.g. ISO 20022

Foreign exchange Deal Confirmations and matching FIN MT3xx

Multi-asset class matching FX/MM, Derivatives, Commodities, Securities

Matching (Accord)FIN MT3xx, MT5xx, MT6xx

Trade Finance LCs, Demand Guarantees FIN MT798FileAct for documents

Supply Chain Finance

BPO based services (Payment on time, risk mitigation, financing)

Approved payables financingFileAct for all formats e.g. ISO 20022

Regulatory requirements Trade reporting, clearing and collateral management FIN

FileAct

eStatements Statement dematerialisation FileAct e.g. PDF, …

EBAM Account management (opening, closing) and Mandate management (signatories, user entitlements)

ISO 20022Documents e.g. PDF, …

Secure financial connectivityPortfolio of Industry Standards supporting your various business flows*

Solutions

*Non-exhaustive list of business flows

15

2004 2005 2006 2007 2008 2009 2010 2011 2012 20130

200

400

600

800

1000

1200

1400

Num

ber

of c

orpo

rate

gro

ups

How many corporate are connected to SWIFT?

Bank Readiness


About SWIFT



Agenda

17

Benefits of Swift for Corporates

Single Connectivity Global Cash Visibility Automation & STP

18

Corporate

e-banking Y

host to host X

e-banking Z

VAN

Internet

Leased line

Accountspayable

Accountsreceivable

Treasury

Other

Multiple bank channels

– High cost– No global visibility on cash– Impossible to centralise– Challenge of multiple

connectivity channels and formats

– Lower cost– Transparency and view on cash– Increased control and security– Reduced risk

Corporate

Accountspayable

Accountsreceivable

Treasury

Other

Standardised

gateway

Single, standardised gateway

Single Connectivity

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Treasury Management• Forecasting• Know your positions• Improve profitability• Reporting to monitor

day-to-day and even hour-to-hour

• Free up precious time and resources

Cash Management • Global Cash visibility• Flexibility to move cash

quickly in different currencies and geographies

• Optimise liquidity • Improve working capital

Risk Management• Know where are your risk• Agility to address

regulatory requirements

Operational Efficiency• Automate procedures and

processes• Right tools and processes in-

place• Increase productivity• Cost reduction

Secure single financial connectivity Flexibility to set-up domestic & international flows with multiple banks.

• Multi-channel integration

• Single connectivity

• Global cash visibility

• Cash and treasury management

• Working capital• Addressing

regulatory requirements

• Forecasting

• Business transformation and process management

• Drive operational excellence

• Drive greater business agility in a complex and disruptive market environment

• Innovates on products and services

• Improve on resources to focus on customer centric strategic activities

• Several industry reports have recommended for Corporates to focus via Customer Centricity with Operational Excellence is the way forward

Observation – Technology as a key enabler

Single Connectivity

Centralization & Automation

Compliance & Risk Management

Technology transformation as key enabler

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SWIFTNet

SWIFTNet interface

Treasury ManagementSystem

MT942

MT942

MT942

MT942

MT942

MT942

MT942

MT942

MT940

MT940

MT940

MT940

• All banks send statements in the same format over SWIFT• No need to download statements from web sites manually• No need to update Excel spreadsheets,

End of day cash visibility directly in the TMS/ERP or SWIFT software

Liquidity Management

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SWIFTNet

SWIFTNet interface

Treasury ManagementSystem

Back Office• One standardized channel• One security scheme• Tight integration with applications

An essential building block ofyour payment factory

MT940

MT940

MT940

MT940

Payment & Reporting

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Debtor Agent(Corporate’s

Bank)

Creditor Agent(Beneficiary s

Bank)

Debtor(Corporate)

Creditor(Beneficiary)

Customer Credit Transfer MT101

Customer Payment Status ReportMT900/Debit Advice

Account ReportingMT940/42

Account ReportingMT940/42

RTGS Settlement

Customer Credit AdviceMT910

Payment Flows - RTGS

TMS /ERP

SWIFT GUI

or

MT300

• Send FX confirmations directly from the TMS• Automatically upload inbound FX confirms• No need to email or fax• Increased security and guaranteed delivery

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SWIFT connection

MT300

Treasury Risk Management

e-banking Issuing banks

Importer

Paper

Internet

host to host

VAN

Advising banks

Exporter

Printed out on Paper

LC/Guarantee Application/Amendment

Import

LC/Guarantees advice/

Amendment

Export• Manual, mostly paper• High risk, high costs• No central visibility of trade finance

Trade Finance

• Streamline the L/C and Guarantees business• Enhance total visibility of trade finance outstanding• Workflow management of the trade life cycle, reduce

discrepancies and reduce costs

LC/Guarantee Application/Amendment

Import

Advising banks

Exporter

MT 798

LC/Guarantees advice/

Amendment

Export

Issuing banks

Importer

MT 798

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Trade Finance – On Swift

Bank Readiness


About SWIFT



Agenda

28

Reasons for bank readiness and certification

Reduce Risk Reduce Cost

Retain Existing & Attract New

Business

Offer Best in ClassStandardized

Platform & Service

Value Proposition

• Leverage Existing SWIFT Platform

• Market Your Best Practice in the Industry

• Provide Direct Contact information to Corporates on swift.com

• Quick and simple set up with industry experts supporting your end to end project

Market opportunities for banks

20%

10%

70%

Americas

Asia Pacific

EMEA

Global 500 Benchmark

on SWIFT32%

158 of Global 500

SWIFT connected corporates are doing business in more than 190 countries

Is your bank ready for SWIFT for Corporates?

It is a standardised corporate environment on SWIFTNet

It is based on a closed user group

It is administered by SWIFT

Corporates can interact with all banks registered in SCORE

Banks can interact with all corporates registered in SCORE

CORPBIC1

CORPBIC2

CORPBIC3 Your institution

SCORE

Steps to Get Ready

31SWIFT for Corporates

• Identify and give contact persons details and bank logo for “Corporate Access Providers List on swift.comCAPL

• Signup for SCORE on swift.comSCORE

• Implement FIN• Implement FileAct

Message Service

• Select MTs and MXs you want to offer, or• Select as per Corporates requestMessages

• Integrate Back office with SWIFT for selected MT and MXIntegration

• Train Internal Staff. .e.g Sales, Operations team etc..• Disseminate Knowledge within the bank. e.g RMs, Branch

etc.. Training

• Test with Corporate BIC• Go Live

Test and Go Live

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Get Ready

Commonly asked questions

Question Answer

Is SWIFT only for Banks? No, SWIFT is a secure networking connecting the global financial community including corporations, banks, securities firms and market infrastructures

What are the costs? SWIFT offers web-based solutions for low costs

What flows can be supported? Domestic and international transaction flows supported

What standards can be supported? Carries SWIFT and non-SWIFT formats securely

Is SWIFT only for public companies? SWIFT is for publicly listed and privately held companies sponsored by members

SWIFT

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Automation and Standardisation helps faster communication and shortening

processing time

The Evolution of Corporate Banking

Presentations & Public Speaking

Transcript of The Evolution of Corporate Banking