SWIFT gpi Delivering the future of cross-border payments, today SWIFT gpi SWIFT gpi

SWIFT gpi 4 SWIFT is an innovative

The Concept 8 technology company. As an industry cooperative, we listen The Tracker 10 Delivering and respond to the evolving The Observer 12 needs of our Community. The Directory 14 Part of our core mission is to Market infrastructures 16 the future of bring the financial community The Roadmap 18 together to work collaboratively to shape market practice, Enable digital transformation 22 define standards and debate Explore new technology 24 cross-border issues of mutual interest. payments, Innovation is an ongoing process, and through our R&D programmes and initiatives such as SWIFTLab, Innotribe, today and the SWIFT Institute, SWIFT is ideally placed to offer insights into the future of global financial technology and work with our Community to make real world change really happen.

2 3 SWIFT gpi SWIFT gpi SWIFT gpi

SWIFT global payments innovation (gpi) In its first phase, SWIFT gpi focuses on business-to-business At Citi, we welcome the launch of As an early member of SWIFT dramatically improves the customer payments. It is designed to help corporates grow their international SWIFT gpi – we see this as a key gpi, successfully experience in cross-border payments business, improve supplier initiative in evolving how cross- completed the gpi pilot and by increasing the speed, transparency relationships, and achieve greater border payments are transacted. was one of the first banks to treasury efficiencies. Thanks to SWIFT The time is right for the industry to go live. We genuinely saw the and end-to-end tracking of cross-border gpi, corporates can today receive an embrace this initiative and come enhanced client experience in enhanced payments service from their payments. banks, with following key features: together to affect meaningful cross-border payments brought change in payments that we by SWIFT gpi. Indeed, the rapidity Faster, same day use of funds* believe will significantly enhance of the first live payment – from Over 90 leading transaction banks from the experience that we deliver to sending the payment instruction Europe, Asia Pacific, Africa and the Transparency of fees our clients. to when our client received the credit confirmation SMS – was End-to-end payments tracking Mark McNulty Americas are already signed up and more Global Head of Financial Institutions Payments and remarkable. We are also pleased are expected to join. Remittance information Clearing, Citi Treasury and Trade Solutions to see that, through collaboration, transferred unaltered innovation and continuously enhancing and expanding the SWIFT gpi functions on the basis Thousands of cross-border payments of ‘business rules’ captured in project scope, SWIFT gpi is are today being sent using this new gpi multilateral service level agreements offering a new universal cross- (SLAs) between participating banks. border payment service, which is standard, bringing immediate benefits to The innovative new service is in line with the trend in payment designed to address end-customer business development and is gpi banks and their corporate customers. needs without compromising banks’ abilities to meet their compliance strongly supported by the global obligations and market, credit and community. liquidity risk requirements. It operates on SWIFT’s secure and resilient global Shangbin Sun Deputy General Manager, Clearing Dept, platform; and participation is open Bank of China to any supervised financial institution (SWIFT Group 1 category) that agrees to comply with its business rules.

* within the time zone of the receiving gpi member

4 5 Regional representation of SWIFT gpi SWIFT gpi SWIFT gpi member banks

90+ member banks sending payments into more than 224 countries and territories; representing over 75% of all SWIFT AMERICAS EMEA APAC cross-border payments 20% 52% 28%

1. ABN AMRO Bank 47. ICICI Bank 2. ABSA Bank 48. IndusInd Bank 3. Alfa-Bank 49. Industrial and Commercial Bank of China* 4. Australia and New Zealand Banking Group* 50. ING Bank* 5. Axis Bank 51. * 6. Banco Bilbao Vizcaya Argentaria 52. Intl. FCStone 7. Bangkok Bank 53. Investec 8. Merrill Lynch* 54. Itaù Unibanco 9. Bank of China* 55. JPMorgan * 10. Bank of New York Mellon* 56. Kasikornbank 11. Bank of Nova Scotia 57. KBC Bank 12. Bank of the Philippine Islands 58. KEB Hana Bank 13. Bank of Tokyo-Mitsubishi UFJ* 59. 14. Banco Bradesco 60. Bank 15. 61. Maybank 16. Banco de Crédito del Peru 62. Mizuho Bank* 17. Banco do Brasil 63. 18. Banco Mercantil del Norte 64. 19. Banque Européenne d’Investissement 65. Nedbank 20. * 66. Bank* 21. Bidvest Bank 67. Oversea-Chinese Banking Corporation 22. BNP Paribas* 68. PKO Bank Polski 23. Bank 69. Promsvyazbank 24. CaixaBank 70. 25. Canadian Imperial Bank of Commerce 71. Raiffeisen Bank International 26. China Construction Bank 72. Resona Bank 27. China Merchants Bank 73. Royal Bank of Canada* 28. * 74. Royal 29. Commonwealth Bank of Australia 75. Sberbank 30. 76. Siam Commercial Bank 31. Crédit Agricole 77. Silicon Valley Bank 32. Crédit Mutuel-CIC Banques 78. Skandinaviska Enskilda Banken 33. Credit Suisse 79. Société Générale 34. CTBC Bank 80. SpareBank 1 35. * 81. Standard Bank of South Africa 36. DBS Bank* 82. Bank* 37. 83. Sumitomo Mitsui Banking Corporation* 38. DNB Bank 84. 39. Ecobank 85. Tadhamon International Islamic Bank 40. E.Sun Commercial Bank 86. TMB Bank 41. Bank 87. Toronto-Dominion Bank 42. Fifth Third Bank 88. UBS 43. FirstRand Bank 89. U.S. Bank 44. 90. * 45. Landesbank Hessen-Thüringen 91. United Overseas Bank 46. HSBC Bank 92. *

* Banks that participated in the 2016 pilot

6 7 The Concept SWIFT gpi SWIFT gpi

SWIFTgpi

The Concept The Benefits The Complete Package

Global reach Faster, same day use of funds Tracker Provided by core transaction (within the time zone of the Get visibility on where a payment banks using an open model receiving gpi member) is and confirmation of its credit in real time More efficient and more clarity Smart collaboration on fees Optimising business processes and reducing costs Accessible Directory by any bank Secure and compliant A complete listing of all gpi SLA rulebook members and their capabilities With customer at centre of value proposition End-to-end payments tracking

Embrace innovation Observer Exploring new technologies A global view of gpi banks’ Unaltered remittance information adherence to the gpi SLAs

Still reach non-initiative banks Open and inclusive, offering global reach Services gpi members can access a dedicated member-zone, including all technical & commercial documentation, and a SWIFT certification service

Reaching any bank

Tracker

Directory Observer Accessible by any corporate (via SWIFT or bank channel)

8 9 The Tracker SWIFT gpi SWIFT gpi End-to-end payments tracking

In today’s world, customers expect By enabling gpi payments to be tracked using a greater transparency. When they Benefits Benefits for for banks corporates send a payment, they want to payment Tracker, we bring in predictability and know what is happening with it and when it has been received. confirmation for a cross border payment, which is a Reduce operation Track important Until now, this has not been the costs and time spent payments fantastic initiative as it allows for better management case in cross-border payments as on investigations of commercial payments. Standard Chartered is each bank has only been able to Get confirmation guarantee and share information Reduce front office that the payment a leading cross-border payments correspondent on its own leg of the payment. costs on customer was credited on calls/complaints the account of the bank and we believe this initiative will benefit our Now SWIFT gpi enables banks beneficiary correspondent banking clients substantially in to provide end-to-end payments Rapidly investigate tracking. SWIFT has developed claims of non-receipt Easily reconcile efficiently managing their payments and receipts. payments and a Tracker database ‘in the cloud’ Offer new innovative invoices T S Shankar securely hosted at SWIFT, to give services to Head of Payments and Liquidity Products, Correspondent Banking, Standard Chartered end-to-end visibility on the status customers Speed up supply of a payment transaction from chain and reduce the moment it is sent until it is Provide a better risk; release goods confirmed. end-to-end service as soon as payment The Tracker to clients is sent SWIFT gpi banks are able to log 2 3 in to the Tracker to instantly check Status Amount Charges Duration SWIFT Tracking Number the status of the payments they 1 have sent, those in progress and 4 Originator Beneficiary those that have been received. They can even improve their 5 6 liquidity management by having visibility on initiated payments that are already on their way. BANK A 7 BANK B BANK C BANK D

The Tracker can be updated by FIN message or via API. It can be accessed via a graphic user See detailed history 8 interface (GUI) and also via API calls to allow the service to be embedded in other back-office systems. 1. One glance’ status overview 2. Transparency of total fees and time 3. Unique end-to-end transaction reference (UETR) 4. Bank access via MT 199/GUI/API 5. In the cloud – hosted at SWIFT 6. Real time tracking 7. Details of banks along the path 8. Details – references to MTs

10 11 The Observer SWIFT gpi SWIFT gpi A global view of banks’ adherence to the SLA

In order to enhance cross-border All gpi member banks are committed to the gpi payments, SWIFT has created Benefits a new service level agreement cause. Such commitment being fundamental to its (SLA) rulebook. This provides the opportunity for enhanced business success, we also agreed to have our adherence to Ensures quality in the practices and smart collaboration gpi initiative the SLA and business rules monitored through a “gpi between participating banks. To Observer”, a clear proof of this commitment. monitor adherence to this new A central updated SLA for all members, SWIFT has resource for all Manu Legein created a central service called the banks involved in the Head of Business Development Management, Observer. initiative Payment Solutions Corporates, KBC

All gpi banks will have a global Identification of view of other gpi banks’ adherence targeted areas for improvement to the gpi SLAs. This will enable gpi banks to quickly pinpoint potential areas for improvement and work collaboratively towards a better implementation of the SLA. The Observer

YOUR gpi COMMUNITY gpi Quality Index Quality Indexes

Bank 1 Bank 2 same day Branch 1a Branch 2a transparency Branch 1b Branch 2b end-to-end tracking Branch 1c Branch 2c remittance info unaltered Branch 1d Branch 2d

Bank 3 Bank 4 Branch 3a Branch 4a Branch 3b Branch 4b Branch 3c Branch 4c Branch 3d Branch 4d

compliant non-compliant (visible to non-compliant gpi bank only) non-compliant (visible to all gpi banks)

12 13 The Directory SWIFT gpi SWIFT gpi A complete list of all gpi members

Every member bank is Corporates have a keen interest in SWIFT gpi as automatically listed in the gpi Benefits Directory. This includes details demonstrated during our yearly client event in Paris: such as: which banks can send and receive gpi payments by payments tracking was highlighted by treasurers Find out the business identifier code (BIC); operational present as the most promising cash management in which currencies; reachable capabilities of gpi innovation. In addition, thanks to the SWIFT gpi through which channels; cut-off members times; and if a bank acts as an Directory, we will also be able to apply best payment intermediary for gpi payments. Easy identification of all potential gpi routing and have our clients benefit as much as This Directory benefits all counterparties possible from the gpi features. Ultimately, we expect banks involved by enabling comprehensive end-to-end Leverages SWIFT’s SWIFT gpi to move cross-border payments to a new best-in-class path finding for gpi payments. capabilities for standard. It is available in a wide variety managing reference Jean-François Denis of formats and accessible via data automated delivery channels. Deputy Global Head of Cash Management, BNP Paribas

The Directory

Currencies supported Support Intermediary

SLA id BIC11 gpi-enabled Cut-off time Path to reach bank

14 15 Market infrastructures SWIFT gpi SWIFT gpi

Payments market infrastructures Support from the market infrastructure community play a key role in the journey of a Benefits for market Benefits for gpi infrastructures members cross-border payment. As soon as is a key factor for success. Taking a standardised an international payment reaches a domestic or regional market, approach to identifying gpi transactions in these local Facilitate the Ensures the smooth market infrastructures typically seamless clearing of gpi clearing systems will reduce fragmentation and costs come into the picture for local transmission of gpi payments between for banks. We look forward to working more closely clearing and settlement. SWIFT payments between gpi member banks is therefore actively working with the cross-border and with market infrastructures as the industry realises its payments market infrastructures domestic markets Allows for the to ensure compatibility with the tracking of a gpi goal for faster, more transparent and traceable cross- SWIFT gpi payment specifications Lower the barrier of payment up until border payments. and to ultimately achieve global entry for members the local beneficiary interoperability between domestic to access an bank Harry Newman improved cross- Head of Banking, SWIFT and cross-border payments border payments Strengthens the services. experience value proposition for customers as gpi From their side, market Leverage SWIFT gpi payments can be infrastructures want to be platform for future sent through multiple compatible with SWIFT gpi to offer innovations channels their member community access Local to an enhanced cross-border markets experience, and position their strategic initiatives in this particular area.

Market infrastructures that use

SWIFT technology (FinCopy) Ordering Beneficiary and standards already support customer the SWIFT gpi experience. For others, best market practices to map domestic formats on to cross-border gpi standards can Ordering Beneficiary be defined in collaboration with customer SWIFT, in particular for market infrastructures that are based on or plan to adopt ISO 20022.

16 17 SWIFT gpi SWIFT gpi

The first phase of SWIFT gpi is focused on improving the speed, transparency and end-to-end tracking of cross-border payments by delivering a solution in the short-term.

Meanwhile, in collaboration with banks and corporates around the world, a strategic yet pragmatic roadmap has been identified, to develop additional optional payments services to deliver further value in the near future.

That second phase of SWIFT gpi will enable the digital Roadmap transformation of cross-border payments, by allowing banks to:

for the future • Immediately stop and recall a payment, no matter where it is in the correspondent banking chain.

• Transfer rich payment data along with the payment, with the item data necessary for payments compliance checks or line details; to enhance the reconciliation with invoices.

• Use an international payment assistant at origination, to further increase the straight-through-processing rate of cross-border payments.

In parallel, SWIFT gpi is exploring the potential of using new technologies such as distributed ledger technology and blockchain, in the cross-border payments process.

18 19 The Roadmap SWIFT gpi SWIFT gpi In future SWIFT gpi phases, further services will be deployed for adoption by members

2015 2016 2017 2018 2019

Dramatically improve Identify, scope Design Build, Go live cross-border payments test Customer Credit Transfer

Extension for cover payments Design Build, test Go live

Enable digital transformation Identify Scope (vision workshops) Stop and Recall Payment Design Build, test Go live

Rich Payment Data Design Build, test Go live

International Payment Assistant Design Build, test Go live

Additional Payment Services Continuous exploration and co-creation with the financial, corporate and fintech industries

Explore new technology DLT PoC for Scope Design Build, test Go live real-time nostro reconciliation

The first phase of SWIFT gpi is focused on improving the speed, transparency and end-to-end tracking of cross-border payments. There are, however, additional opportunities to enhance customer convenience and cut bank costs that will quickly be addressed in the next phases of SWIFT gpi.

These services will provide an enhanced experience through new shared digital services and technologies.

20 21 Enable digital transformation SWIFT gpi SWIFT gpi

Security at the heart of the Stop and Recall Payment Transfer of rich payment data SWIFT gpi platform Sometimes a payment needs to be Today, corporates are requested, at stopped. For example: in case of fraud, multiple times and by several banks in or when a duplicate payment has been Security is at the heart of SWIFT’s the correspondent banking chain, to erroneously sent. Today, banks send products and services. Within the SWIFT provide additional payments information a request for cancellation by following gpi platform, specific features have been for compliance checks. In addition, the same route of the payment, i.e. designed to help provide an increased buyers need to convey rich payment from one bank to the next, chasing the security layer to the platform – allowing details in order for the seller to reconcile payment already on its way. The ability both banks and corporates to perform one payment with multiple invoices. to immediately stop a payment, at any cross-border payments in a secure and This process currently requires manual point in the payment chain, would be resilient way: intervention and numerous e-mail of great value. With the SWIFT gpi Stop exchanges between the corporate clients and Recall Payment service, banks will The Tracker and their banks. The ability to use the be able to stop a payment instantly, In case of a (suspected) fraud case, banks SWIFT gpi Rich Payment Data service, a regardless of where it is in the payment can easily track the route a payment secure information layer in the cloud, to chain, thanks to the unique tracking code International payment assistant followed, using the gpi tracker. transfer rich payment data along with a linked to any SWIFT gpi transaction. payment would save costs and precious In addition, every bank in the payment Challenged by a multitude of different Rich Payment Data time for both corporate clients and their chain would be notified at the same local payment practices, regulatory Corporates and banks can share extended banks. Using SWIFT gpi’s unique tracking time. And if the payment was already requirements and account number compliance information and documents code, the information associated to the credited, the instructed bank would specifics, corporates lose a lot of time needed to accompany the payments, with payment is conveyed via the cloud. With receive an immediate recall of funds and money today when generating specific access controls. this service, banks would be able to instruction. Besides the value of stopping cross-border payments or in the delays provide corporates with the capability to an erroneous or fraudulent payment, this incurred when a transaction is returned Stop and Recall Payment reconcile invoices and payments in an service provides increased operational due to missing or wrong payment data. In the case of a (suspected) fraud, automated way and keep track of them at efficiency and avoids a lot of administrative The SWIFT gpi International Payment corporates can ask their banks to stop a the touch of a button. hassle for all parties involved. Assistant, available through SWIFT’s payment immediately, at any point in the secure information layer in the cloud, payment chain. would enable corporates to receive value added payment-related information related to all banks and market infrastructures involved in the transaction chain before actually sending the cross-border Invoices payment, hence improving operational efficiency, speed and customer satisfaction.

Ordering Beneficiary Invoices customer

canceled canceled stopped

Buyer Payment Seller

22 23 Explore new technology SWIFT gpi SWIFT gpi

Collaborative innovation Exploring blockchain Whilst existing DLTs are not currently mature enough SWIFT gpi will open access to third- Under the current correspondent for cross-border payments, this technology, bolstered party banks, payments service and banking model, banks need to e-commerce platform providers, monitor the funds in their overseas by some additional features from SWIFT, may be who use common APIs to integrate accounts via debit and credit updates payments services in their specific and end-of-day statements. The interesting for the associated account reconciliation. customer experience thus enabling maintenance and operational work This PoC gives us the opportunity to test DLT and collaborative innovation. involved represents a significant portion of the cost of making cross- determine if it can be applied to this particular use border payments. case.

As part of the technology evaluation Wim Raymaekers in the SWIFT gpi roadmap, SWIFT Head of Banking Market and SWIFT gpi, SWIFT launched a Proof of Concept (PoC) in 2017, to test distributed ledger technology (DLT) and determine if this new technology can be applied to reconcile banks’ nostro accounts more efficiently and in real time, lowering costs and operational risk. Whilst DLTs are currently not mature enough for broad use on cross- border payments, this technology may provide solutions for the associated account reconciliation. SWIFT will leverage its key assets to bring the technology in line with the financial industry’s requirements, including strong governance, PKI security scheme, BIC identify framework and liquidity standards expertise, with the goal to deliver a distinctive DLT PoC platform for the benefit of its community.

24 25 SWIFT gpi SWIFT gpi

With Asia’s trade growth SWIFT gpi supports our goal We are looking forward to the This is a very significant bank- expected to surpass the global of providing our clients with enhancements that this initiative wide initiative in the cross- average, this faster and secure earlier access to funds, greater will bring to cross-border border payments’ space. It cross-border payments service transparency & predictability, and payments. The efficiencies is not simply an exercise of will definitely be a boon to our the delivery of unaltered remittance recognized from SWIFT gpi will ‘moving with the times’, but corporate customers. It will not data that will enable better decision provide better transparency and rather pragmatic proof that only better facilitate their cash making for all parties involved in an enhanced user experience we remain at the forefront of management needs, but also the bank chain. Essentially SWIFT for our clients. payments innovation to address support their overseas business the precise needs of our clients. gpi is helping the industry align Emma Loftus operations and ventures, within Head of Global Payments and FX, J.P. Morgan cross-border payments with Christian Westerhaus and beyond Asia. the requirements of our clients. Head of Product Management, Institutional Cash, Deutsche Bank Mr Gregory Trotter Delivering these services in the Head of Cash Management, Global cloud will allow the construction Transaction Banking, OCBC Bank of entirely new services which will change the way banks conduct international business on behalf of their clients.

Tom Halpin Global Head of Payments Product Management, HSBC Global Liquidity and Cash Management Join the world’s leading transaction banks

More banks are joining SWIFT gpi every day.

When are you joining?

Sign up today via [email protected] or check our www.swift.com/gpi for more information.

26 27 SWIFTgpi

About SWIFT About SWIFT global payment innovation (gpi) SWIFT is a global member-owned cooperative and the world’s leading SWIFT global payments innovation (gpi) provider of secure financial messaging aims to dramatically improve customer services. As a global member-owned experience in cross-border payments. cooperative and the world’s leading SWIFT gpi services will operate on the provider of secure financial messaging basis of ‘business rules’ captured in services, SWIFT enables more multilateral service level agreements than 11,000 banking and securities (SLAs) between participating banks. organisations, market infrastructures In its first phase, launched in February and corporate customers in more 2017, SWIFT gpi delivers a new than 200 countries and territories to standard in cross-border payments communicate securely and exchange by increasing their speed, providing standardised financial messages in a transparency over fees and enabling reliable way. As their trusted provider, end-to-end tracking. The second phase we facilitate global and local financial will see the digital transformation of flows, relentlessly pursue operational cross-border payments with additional excellence, and continually seek services such as a rich payment data ways to lower costs, reduce risks and transfer, an instant stop and recall eliminate operational inefficiencies. payment service and an international We also bring the financial community payment assistant. For its third phase together to work collaboratively SWIFT gpi is already exploring the to shape market practice, define potential use of new technologies, such standards and debate issues of mutual as distributed ledger technology, in the interest. cross-border payments process.

For more information, For more information about the initiative, visit www.swift.com or follow us please visit www.swift.com/gpi or on Twitter: @swiftcommunity download the SWIFT gpi iPad app. and LinkedIn: SWIFT

Copyright

© SWIFT 2017 Copyright © SWIFT SCRL, 2017 — 57252 - January 2017 all rights reserved.