SWIFT GPI: one year along the road, status update for Romanian community

Janssen Marianna, SWIFT Payments specialist EMEA

7th of November 2018, Bucharest

SWIFT gpi_Romanian BF_November 2018_Confidentiality restricted 1 Current gpi adoption: status update

SWIFT gpi_Romanian BF_November 2018_Confidentiality restricted 2 Unparalleled growth in adoption, traffic and corridors

Very large community 300~ 200+ 80+% including the 1st bank in Romania: countries covered SWIFT cross-border payments Banca Transilvania represented

Millions live payments 85 700+ 100+Mio 30+% banks live country corridors payments sent as gpi since go live - cross-border MT103 35 top 50 banks 500K payments/day sent as gpi

. Over 50% of SWIFT gpi payments are credited to end beneficiaries Delivering within 30 minutes real value . More than 100 billion USD are being sent daily via gpi . Banks are saving costs thanks to quicker investigations handling and a significantly reduced number of payment enquiries

SWIFT gpi_Romanian BF_November. 2018_ConfidentialityPositive restricted reactions from corporates 3 85 banks are live, with more than 180 banks in the implementation phase 85 gpi banks live

Nordea Bank

Toronto–Dominion Bank Alfa-Bank State Savings Bank of Ukraine Vietinbank DNB Bank Royal Bank of Canada SEB E.SUN Commercial Bank ICICI Bank Bank of Nanjing Scotiabank Ebury Kapital Bank Shanghai Rural Commercial Bank ING BIDV Canadian Imperial Bank of Commerce Shanghai Pudong ABN AMRO Bank Turkiye Garanti Development Bank Associated Foreign Exchange HSBC BNP Paribas Bankasi INTL. FCStone National Bank of Wells BNY Mellon KBC Bank Raiffeisen Bank Bank of Jiangsu Shinan Bank Citi UBS Kuwait Fargo International Bank Pekao Al Baraka Bank JPMorgan Chase ICBC Bank of Hangzhou Société Générale Crédit Mutuel-CIC Bank al Ethiad China Citic Bank Sumitomo Mitsui Merrill Lynch Commercial Bank CTBC Bank BBVA Banking Corporation of Kuwait Siam Commercial Bank National Blom Bank Kookmin Bank Vietcombank Commercial Bank OCBC YinzhouBank MUFG Bank Bangkok Bank DBS Bank Bank

FirstRand ABSA Bank NAB Nedbank Standard Bank Westpac ANZ Commonwealth Bank of Australia

SWIFT gpi_Romanian BF_November 2018_Confidentiality restricted 4 300 plus global transaction banks signed up

AME-UK EMEA

Asociación Popular de Ahorros y Crown Agents ABN AMRO Bank Bank Uralsib Raiffeisen Bank International Préstamos Danske Bank ABSA Bank Banque BEMO Fidelity Bank Rawbank Associated Foreign Exchange DNB Bank Access Bank Banque Centrale Populaire FirstRand Riyad Bank BAC International Bank Ebury Afrasia Bank Banque du Liban Fransabank RosEvroBank Banco BISA Global Reach Partners Afriland First Bank Banque Libano-Française Gazprombank Saradar Bank Banco Bradesco GPS Capital Markets Akbank BayernLB GCB Bank Sberbank Banco Davivienda HiFX Al Baraka Bank Bidvest Bank Guaranty Trust Bank Sierra Leone Commercial Bank Banco de Chile HSBC Alawwal Bank Blom Bank iBanFirst Skye Bank Banco de Credito del Peru IFX Alfa-Bank BNP Paribas ICCREA Banca Société Générale Banco del Estado de Chile Interactive Brokers Ameriabank Bosna Bank International ING Standard Bank Banco del Pacífico INTL FCStone Arab National Bank Bank Intesa Sanpaolo State Savings Bank of Ukraine Banco de Reservas de la República J.P. Morgan BBVA Byblos Bank Kapital Bank Sterling Bank Dominicana Lek Securities Corp. BANCA TRANSILVANIA CaixaBank KBC Bank Tadhamon International Islamic Banco Galicia S.A Central Africa Building KCB Bank Bank Banco Económico MMG Bank Corporation Banco BIC Portugues Society Khan Bank TBC Bank Banco Inbursa Bank Banco de Crédito Central Cooperative Bank Landesbank Hessen-Thüringen TEB Banco Industrial Produbanco Cooperativo Citco Bank Mashreq Bank The International Bank of Banco Monex Royal Bank of Canada Banco Privado Atlantico- Commercial Bank of Mauritius Commercial Bank Azerbaijan Bank of America Merrill Lynch Scotiabank Europa Kuwait National Bank of Kuwait Türkiye Garanti Bankasi Bank of Montreal SEB Commerzbank National Commercial Bank Türkiye Halk Bankasi Bank of New York Mellon Svenska Banco Santander CRDB Bank National Microfinance Bank Türkiye İş Bankasi Barclays Toronto–Dominion Bank Bank al Bilad Crédit Agricole Natixis UBS Banorte United Nations Bank al Etihad Crédit Libanais Nedbank UniCredit Banrural Vitesse PSP Limited Bank Audi Crédit Mutuel-CIC NIC Bank Union National Bank Cambridge Mercantile Corp. Bank Hapoalim Credit Suisse Nova Ljubljanska Banka Yapi Kredi Bankasi Canadian Imperial Bank of Commerce World First Banka Per Biznes DenizBank Onpex Bank Zenith Bank Citi Deutsche Bank Ziraat Bankasi Clear Bank Bank of Beirut & the Arab Diamond Trust Bank PKO Bank Polski Countries Ecobank Privat Bank Emirates NBD Qatar National Bank Bank of Georgia Bank Rabobank Bank Pekao

* Live banks in bold

SWIFT gpi_Romanian BF_November 2018_Confidentiality restricted 5 300 plus global transaction banks signed up

APAC

Agricultural Bank of China Bank of Rizhao E.SUN Commercial Bank Punjab National Bank AB Bank Federal Bank Shanghai Pudong Development Bank ANZ Bank of Taizhou Foshan Rural Commercial Bank Shanghai Rural Commercial Bank Axis Bank Fudian Bank Shengjing Bank Bangkok Bank Bank of Xi’an Fujian Haixia Bank Shinhan Bank BIDV Bank of Zhengzhou Guangdong Huaxing Bank Siam Commercial Bank Bank Islam Malaysia Berhad Bank Rakyat Indonesia Guangdong Nanyue Bank Standard Chartered Bank Bank Negara Indonesia Bank Rakyat Malaysia Hankou Bank Sumitomo Mitsui Banking Corporation Bank Sinarmas Taian Bank Bank of Changsha Chang’An Bank HDFC Bank The Bank of East Asia Bank of Ceylon Hong Leong Bank Berhad TMB Bank Bank of China China CITIC Bank Huarong Xiangjiang Bank Union Bank of India Bank of Communications China Construction Bank Huishang Bank Corporation United Overseas Bank Bank of Dongguan Hunan Liuyang Rural Commercial Bank Vietcombank Bank of Fuxin China Guangfa Bank ICICI Bank Vietinbank 200+ countries Bank of Ganzhou China Merchants Bank ICBC Weifang Rural Commercial Bank Bank of Guangzhou China Minsheng Bank Weihai City Commercial Bank 80+% SWIFT cross-border payments Bank of Guiyang China Zheshang Bank Industrial Bank of Korea Westpac Bank of Guizhou Chong Hing Bank Jiangmen Xinhui Rural Commercial Bank Woori Bank 100+ Mio gpi payments since go live Bank of Hangzhou Chongqing Rural Commercial Bank Jiangxi Bank Yantai Bank 500K+ gpi payments/day Bank of India CIMB Bank Berhad Kasikorn Yes Bank Bank of Inner Mongolia City Union Bank KEB Hana Bank Yinzhou Bank 700+ country corridors Bank of Jiangsu Commonwealth Bank of Australia KB Kookmin Bank Zhejiang Mintai Commercial Bank Bank of Jining CTBC Bank Liaoyang Commercial Bank Zhejiang Rural Credit Cooperative Union Bank of Jinzhou Dah Sing Bank Maybank Zhejiang Tailong Commercial Bank Bank of Jiujiang DBS Bank MB Bank Zhuhai Rural Commercial Bank Bank of Langfang Dezhou Bank Mizuho Bank Zhongshan Rural Commercial Bank Bank of Nanjing Dongguan Rural Commercial Bank MUFG Bank Zhongyuan Bank Dongying Bank Zhuhai Rural Commercial Bank Bank of Qindao OCBC Bank of Quanzhou Ping An Bank Postal Savings of China

SWIFT gpi_Romanian BF_November 2018_Confidentiality restricted 6 SWIFT gpi is dramatically speeding up cross-border payments!

+90% < 1 day end-end

SWIFT gpi_Romanian BF_November 2018_Confidentiality restricted 7 Vision & ambition

SWIFT gpi_Romanian BF_November 2018_Confidentiality restricted 8 Ambition 2020: gpi is the new norm for cross-border payments

2020 Approved by the Community and All payments confirmed Board

SR2018 and extended tracking 2018 All payments tracked approved in December 2017

2017 gpi service approved in Rapid initial adoption September 2016

SWIFT gpi_Romanian BF_November 2018_Confidentiality restricted 9 2018

SWIFT gpi_Romanian BF_November 2018_Confidentiality restricted 10 Agile innovation in 2018

PROOF OF DESIGN, PILOT, EXPLORE LIVE VALUE PROOF OF CONCEPT BUILD, TEST

3 new services ISO 20022 DLT PoC (2017)  Extended tracking Pre-  Cover payments validation  Stop and recall Real-time Institutional cross-border payments Make it easy!

. Visibility incoming Bank to Customer . Request for Payment corporate pilot payments

SWIFT gpi_Romanian BF_November 2018_Confidentiality restricted 11 gCCT gpi gCCT service – flows

MT 103 MT 103 with UETR1234 with UETR1234 & Service Type Identifier 001 & Service Type Identifier 001 1 3

gCCT gCCT gCCT Instructing Intermediary gpi Agent Instructed gpi Agent gpi confirmation Credit confirmation gpi Agent MT199/API gpi confirmation MT199/API 1 2 3 4 MT199/API 2 4 SWIFT gpi Tracker

SWIFT gpi_Romanian BF_November 2018_Confidentiality restricted 12 MT 202 COVER gpi gCOV service – Value proposition

Credit transfer (MT 103, UETR1) – as per gCCT

gCOV gCOV MT 202COV uses UETR1 Instructing Instructed 1 1 Credit gpi Agent gpi Agent 2 3 Confirmation gCOV gCOV MT 910 (optional) Instructing Instructed MT299/ API Reimbursement Reimbursement Agent Agent 2 3 4 MT299/API 4 MT299/API 4 MT299/API 3 4 SWIFT gpi Tracker

SWIFT gpi_Romanian BF_November 2018_Confidentiality restricted 13 Stop & Recall Payment SWIFT gpi - Stop & Recall Payment Value Proposition

SWIFT gpi Tracker Initiate gSRP MT 192, MT 199 / API STOP Payment 1 Requested Cancelled 1’ 4 gSRP responses and status notifications gSRP response: MT 199, MT 196 / API Tracker adds UETR to network cancellation list MT 199 / API 4 and delivers gSRP to processing bank (MT 192) 3 2 FIN Debtor Debtor’s Bank Intermediary Bank Intermediary Bank Creditor’s Bank Creditor 5 Return of Funds (not in service scope)

SWIFT gpi_Romanian BF_November 2018_Confidentiality restricted 14 Key participants: The market infrastructures

Market infrastructures play key role in: 1. SWIFT gpi clearing:       To pass on unique gpi identifier and data between gpi banks 2. SWIFT gpi tracking: Cross-border Local market To pass on unique gpi identifier to local non-gpi member banks MI

Ordering Market infrastructures support gpi: Beneficiary customer 1. When based on SWIFT: fully supporting gpi

2. When not based on SWIFT: MI Local market practice for gpi mapping (to be) agreed Ordering Beneficiary customer 3. When using ISO 20022: gpi recommendations available

SWIFT gpi_Romanian BF_November 2018_Confidentiality restricted 15 How can an MI clear gpi payments?

MI uses FINCopy MI uses FIN in V-Shape MI does not use FIN

EUR, GBP, CAD … (50+) THB, MAD, MYR … (20+) USD, CNY, CHF, JPY …

A FIN msg SWIFTNet FIN B A B A B AA BB AA BB A B Y- Copy A B Sending Receiving Sending Receiving Sending Receiving Participant Participant Participant Participant Participant Participant

MI MI MI

SR2017 SR2017 w/ MP Tracking & SLA SR2018 Tracking & SLA SR2018 Tracking – SLA? w/o MP

It . just . works Pass UETR? gpi market practice required  SR 2018 MPs available for Fed, CHIPS, Pass Service Type? CIPS, SIC, FXYCS (Japan).  Join gpi CUG for MIs

SWIFT gpi_Romanian BF_November 2018_Confidentiality restricted 16 2019

SWIFT gpi_Romanian BF_November 2018_Confidentiality restricted 17 2019 priorities

PROOF OF DESIGN, PILOT, EXPLORE LIVE VALUE PROOF OF CONCEPT BUILD, TEST

6 new to pilot & go live ISO 20022 API portlet . Corporate initiation & tracking . Faster, Real-time payments Request for . Pre-validation Open APIs Frictionless . Notification/visibility incoming payment . Case resolution sanctions (XML, digital) screening . Financial institution transfers 2 “make it easy” - Manual confirm GUI - Integration back-office

All gpi banks are requested to include in their 2019 budgets a 4 services live . Customer credit transfer provision for the service(s) your institution wants to pilot / go live . Cover payments . Extended tracking . Stop and recall SWIFT gpi_Romanian BF_November 2018_Confidentiality restricted 18 Corporate payment initiation & tracking pilot: end-to-end C2B/B2C gpi flows

gpi payments tracker

3

TMS/ERP MT 101/pain.001 + UETR(s) 1 2

4 MT 103 + UETR MT 103 UETR Beneficiary MT 199 /pain.002 + UETR(s) Ordering corp Instructing gpi Agent

. Banks receive FIN MT 101 or pain.001 with UETR (#1) and include same UETR in resulting gpi MT 103 (#2) . Tracker provides specific MT 199 or API confirmations with UETR and Service Type Identifier “003” (#3) that are ready for the bank to route to its corporate customers (turn- key solution) as FIN MT 199 or pain.002 (#4) . Service confirmations follow a specific data model, different from gCCT’s, focused on management by exception and also providing transaction routing audit trail

SWIFT gpi_Romanian BF_November 2018_Confidentiality restricted 19 gpi Case Resolution service (gCASE)

Value proposition High Level requirements overview  Seamless conversation between gpi banks’ case . E&I requests exchanged between gpi bank processing management tools gCCT and previous/first gpi bank  Market practice for E&I . Using MT n99, MT n95 and MT n96 and API to  Reduction of operational costs, increase exchange information with the Tracker; exchange of processing efficiency and customer satisfaction rich data (documents) and ISO 20022-based E&I messages to be explored. . Target availability: with SR 2019.

SWIFT gpi Tracker

gCASE request 2 3 gCASE response 1 Initiate E&I . MT n96 / MT n99 with specific SLA . MT n95 / MT n99 . API . API (using ISO 20022 model) gCASE responses & status notifications 4

Legend Payment flow

E&I flow Debtor Debtor’s Bank Intermediary Bank Intermediary Bank Creditor’s Bank Creditor

SWIFT gpi_Romanian BF_November 2018_Confidentiality restricted 20 Pre-validation: bringing payments intelligence at origination Specific example – online validation within bank’s web portal (using APIs, featured validations not restricted to version 1)

YOUR CREATE INTERNATIONAL BANK PAYMENT 1 STP validations

Value date 2018-01-15 ! i Holiday detected in intermediary country Estimated path Added-value predictions “ZA” – the processing will take longer 3 Amount 10.000,00 (optional, for considerations) 1 Currency ZAR Sender Bank UK 2 Intermediary Bank ZA Ordering account 122267890 3 Beneficiary Bank ZA High Level requirements Receiving institution BENEZA33 i BIC is valid Estimated processing time Beneficiary account 50266959 i Account structure is not correct based on overview country of receiving BIC Beneficiary name & H.F. TRELAWNEY in 1 day 5 hours . Capability for Real-Time address 68 MARK LANE JOHANNESBURG Over 1 day due to “Value Date” (API-based) query on SOUTH AFRICA beneficiary account Charge bearer SHA i OUR charges is not supported by Expected confirmation on 2018-01-16 OUR beneficiary banks number and holder. BEN Estimated fees “This is a international ! i Potential reconciliation issue at bene side: Remittance Market Infrastructure at bene country does information payment that is not support >67 characters validated by the gIPA 40 to 60 USD Advice on missing i Purpose code and phone number should be 2 service” included in Remittance information to avoid documentation non STP at bene bank Attachments  DOCUMENT 1 i Needed by UK regulation Please attach the following Validate Authorize documents  DOCUMENT 2 i Needed by ZA regulation Validate with pre-validation

SWIFT gpi_Romanian BF_November 2018_Confidentiality restricted 21 Pre-validation: where to focus first

SWIFT gpi_Romanian BF_November 2018_Confidentiality restricted 22 PoV 1 - Visibility on incoming payments

SWIFT gpi Tracker Mobile 1 2 H2H Tsy Ops 3 SWIFT ERP 4 Intermediary Buyer Buyer bank bank(s) Seller bank Web Seller

Perceived value for corporates (confirmed during PoV) Self-service proof of payment for V.I. payments: the proposed solution is one less interaction with customers (e.g. to provide UETR or proof of payment) Self-service for investigations: e.g. access to historical transaction data in case of credit with wrong value date. Complement to already existing AR forecasting sources

SWIFT gpi_Romanian BF_November 2018_Confidentiality restricted 23 gFAST: extending operating hours identified as valuable first step

“e2e real-time”

• Near real-time “Enhance” confirmations/exception notifications to end- customers • e2e SLA towards end- customers • Provide tools to further “Speed-up” enhance STP rates , e.g. reference data, pre-validation End-goal tools

• Further focus on increasing processing and posting speed for selective payment flows through e.g. stricter STP rules • Extend operating hours coverage (including Identified as key priority to tackle, main aspects for banks to address are for manual repairs) to offer same-day value 1) extending opening hours of banking systems and for more – later - payments 2) access to treasury to ensure appropriate funding

SWIFT gpi_Romanian BF_November 2018_Confidentiality restricted 24 Cross-border real-time payments SWIFT gpi tracker with gpi

Use case 1 – Real-time cross-border gpi payment, between 2 banks In progress

Use case 2 – Real-time cross-border gpi payment, into domestic instant payment system In progress

Use case 3 – Real-time end-to-end gpi payment, from one domestic instant payment system to another Planned

SWIFT gpi_Romanian BF_November 2018_Confidentiality restricted 25 gpi for Financial Institution Transfers (gFIT) First version to focus on tracking of FIN instructions; non-FIN tracking and bank confirmations for SR2019

Value proposition High Level requirements overview  Track & trace of incoming and outgoing institutional . MT 202/205 with UETR, Service Type Identifier “004” transactions and MT 299/API to provide / receive Tracker updates  Reduce settlement risk and counterparty exposure . End of 2018 (TBC): optional Tracker-provided status  Improve the quality of institutional intraday liquidity updates for transaction events on FIN (incl. Extended management and forecasting Tracking) . SR 2019 (TBC): bank-provided status updates incl. credit confirmations and non-FIN tracking.

SWIFT gpi Tracker 2 Tracker Network New status 1 confirmations capture of when network 2 3 MT 202/5 3 delivers to with UETR Instructed 3 4 4 Agent 4 4 Credit 1 2 3 confirmation 1 2 3 MT 202/ 205 MT 202/ 205 MT 202/ 205 UETR1234 UETR1234 UETR1234 Instructing Instructed Beneficiary STI “004” Intermediary STI “004” HVPS STI “004” Agent Agent Agent Agent

SWIFT gpi_Romanian BF_November 2018_Confidentiality restricted 26 PoV2 – Request for Payments

Out of Scope for RfP Service Exchange of Debtor’s ID’s for the RfP service and Debtor Bank’s BIC

BUYER / DEBTOR DEBTOR AGENT CREDITOR AGENT SELLER / CREDITOR ‘Payella Corporation’ ‘Any Bank’ ‘Bene Bank’ ‘Receiver Corporation’ in Australia in Hong Kong

Enrol with RfP Enrol with RfP 1 1 Internal RfP Request RfP Request RfP 5 10 2 validation RfP Response 1 2 Reporting of RfP 6 MT 103 Intermediary MT 103 HVPS MT 103 gpi Agent statuses .

RfP RfP Reporting of Reporting of 3 Delivery 4 2 RfP statuses RfP statuses 1 2 3Delivery

SWIFT gpi Tracker

Visibility & Transparency: Integration: ISO20022 Security: Bank’s authentication Automation & Reconciliation: gpi Tracker and rule book standards, standard API’s based on enrolment with service UETR, structured remittance info.

SWIFT gpi_Romanian BF_November 2018_Confidentiality restricted 27 2019 priorities

PROOF OF DESIGN, PILOT, EXPLORE LIVE VALUE PROOF OF CONCEPT BUILD, TEST

6 new to pilot & go live ISO 20022 API portlet . Corporate initiation & tracking . Faster, Real-time payments Request for . Pre-validation Open APIs Frictionless . Notification/visibility incoming payment . Case resolution sanctions (XML, digital) screening . Financial institution transfers New ideas 2 “make it easy” - Manual confirm GUI - Integration back-office

4 services live . Customer credit transfer . Cover payments . Extended tracking . Stop and recall SWIFT gpi_Romanian BF_November 2018_Confidentiality restricted 28 Where to find more information, value points, how it works

www.swift.com/gpi > Document centre > Reports >

https://www.swift.com/file/52996/download?token=4p9zNeqN

SWIFT gpi_Romanian BF_November 2018_Confidentiality restricted 29 How to become a gpi bank: Implementation options

SWIFT gpi_Romanian BF_November 2018_Confidentiality restricted 30 Options to implement gpi

Manual Complement B.O with integration Full blown implementation in B.O

What What What o Swift Interface generates gpi tags o Complement the B.O capabilities o B.O able to generate & pass-on gpi tags o Confirmation is done manually via gpi o Middleware (IPLA/SIL) or batch update as a o B.O sends gpi confirmation to tracker Tracker GUI tool to update the tracker

Advantages Advantages Advantages o No impact on B.O o Minimise impact on B.O o gpi embedded in core system o Quick go-live o Less dependencies on B.O readiness o Easier integration with customers channels

Requirements Requirements Requirements o No intermediary traffic o Ad-hoc discussions to understand B.O o B.O vendor’s is gpi ready (if vendor system) o Limited volumes capabilities

Users Back office Integration Users Back office

Work requiredWork requiredWork Work requiredWork Back office Integration Integration Users

SWIFT gpi_Romanian BF_November 2018_Confidentiality restricted 31 gpi system integration Tracker Customer Investigation staff database

MT199 / API

Investigation application Inbound status Middleware / Micro- services container Inbound payments Payment application Update payment status

Your staff from different locations responding to clients in real-time Optional: consolidate the Tracker information behind your middleware SWIFT gpi_Romanian BF_November 2018_Confidentiality restricted 32 Different ways to integrate gpi

MT 199/299 or API Enable Portal Bring gpi to SWIFT does help you integration your first line

Receive MT 199/299 sent Expose the payment Allow your Investigation A local team of SWIFTgpi by the Tracker and details to Corporate staff to access gpi status experts is available to help consolidate this information customers during customer calls. you during the entire in your database to be Allow your investigation implementation phase consulted by internal Enhance the Corporate tool(s) to integrate with gpi applications user experience by adding Tracker database Test cases are proposed the gpi information at their by SWIFT to help the bank Call the Tracker API in real- fingertips gpi does help reducing assessing the proper time and receive the latest your investigation costs execution of the gpi on each transaction or in Rulebook bulk

SWIFT gpi_Romanian BF_November 2018_Confidentiality restricted 33 Q & A?

SWIFT gpi_Romanian BF_November 2018_Confidentiality restricted 34