Embracing change from a solid foundation Market Infrastructures: Share and share alike
Transcription
Embracing change from a solid foundation Market Infrastructures: Share and share alike
ISSUE 6 • WRAP UP Daily news from SWIFT at Sibos Market Infrastructures: Share and share alike Business information: Adding value to communities Page 6 Page 7 Enjoy the Wrap Up edition of SWIFT at Sibos Embracing change from a solid foundation As you experienced during your week in Boston, Sibos really is our community in action. It truly provides an invaluable opportunity for participants to learn from each other, and for SWIFT to inform and Javier Pérez-Tasso, chief marketing officer, SWIFT, learn from our customers. SWIFT at Sibos focuses on the efforts looks back on an engaging event in Boston, which of your cooperative to meet the needs of reveals key insights for the cooperative. the SWIFT community. As I put it in the opening plenary, financial institutions have avier Pérez-Tasso, chief marketing to deliver on their core mission through officer, SWIFT, returned from tightly managed infrastructures and IT Boston with a positive impression departments, while demonstrating the of Sibos 2014. “The level of particagility and innovation of a start-up. ipation in the Forums, industry plenaries The same goes for SWIFT. You rightly and SWIFT Auditorium sessions suggests expect us to fulfil our core mission of that the community is getting the most network security, resilience, availability out of Sibos,” he says. “The mood in the and protection from cyber threats. At industry is upbeat.” the same time, to stay relevant, we are There are still many challenges on the responding to your evolving needs by horizon, however. Regulation remains very offering new services to support financial high on the agenda, responding to cyber crime compliance, market infrastructures threats is clearly top of mind in the current and real-time payments, to name a few. climate, and the geographic shift from West Over the Sibos week and in this Wrap models, advances in real-time payments to East continues at a rapid pace. “We’ve Up edition, SWIFT at Sibos gives you a in the market infrastructure (MI) space, also witnessed fascinating discussions flavour of how we are planning to continue and plenty of debate on more established on the next phases of digital revolution, doing exactly Deutsche that. Enjoy the 302362 read! Sibos wrap up banner ad 60x176mm Proof 01 01-08-2014 Doremus Bank particularly around emerging payment Gottfried Leibbrandt, CEO, SWIFT continued on page 2 J Se Deutsche Bank Global Transaction Banking ey Optimize every opportunity ou ne x t Sib ye o s ar in Si To find out more, visit db.com/gtb This advertisement has been approved by Deutsche Bank AG. These services are provided by Deutsche Bank AG or by its subsidiaries and/or affiliates in accordance with local legislation and regulation. ©Copyright Deutsche Bank 2014. Visit www.swift.com for more information about SWIFT and its portfolio. ng ap or e technology trends such as cloud services,” says Pérez-Tasso. “Banks, corporates, securities players and MIs rely on SWIFT more than ever before to deliver on our core messaging services and uphold our trusted track record on security, reliability and availability.” A record peak day for FIN traffic on the Tuesday of Sibos broke through the 25-million message barrier. “This was an important milestone that proves the strong sustainability of SWIFT’s core business,” he says. In addition, customers are increasingly looking to SWIFT to provide industry-wide solutions to support doing business in this rapidly changing environment. “Our shared services, as well as our expanded software portfolio are proving that we can grow beyond the core,” says Pérez-Tasso. The compliance challenge One major growth area for SWIFT beyond the core is financial crime compliance solutions. Banks have been grappling with the compliance challenge since the crisis and SWIFT has placed a strong focus on developing utility-based solutions, working hand-in-hand with the industry. “Regulation and financial crime compliance are more important than ever for our members and the message is getting out that SWIFT is a rapidly growing, community-based solution provider for KYC, Sanctions Screening and Sanctions Testing as well as Compliance Analytics,” Pérez-Tasso says. SWIFT’s announcement that The KYC Registry can be accessed for free in 2015 by participating organisations has generated strong interest. “There is clearly an appetite in the industry for us to go faster and deeper as we expand our compliance services portfolio,” Pérez-Tasso notes. “I was impressed to see the number of compliance officers and key decision makers engaging in the Compliance Forum and private workshops.” Pérez-Tasso also identifies a change in the perception of market infrastructures (MIs) that plays to SWIFT’s strengths. “The days of MIs being an unchanging segment are well and truly over,” he says. Regulation, payment technology shifts such as the move towards real-time, reinforced resilience and ISO 20022 adoption are all pushing in the direction of reform and innovation. “The MI Forum provided a great opportunity to talk to customers from around the world to gain insights that can sharpen our value propositions on high and low value payments, our offering to CSDs as well as our standards and resiliency offerings,” he says. The Standards Forum, Corporate Forum and Innotribe were also strong this year with packed sessions, he adds. “Together with the inaugural Investment Manager Forum and Sibos University, they provided a real platform for debate across a broad spectrum of the industry.” Meanwhile, the SWIFT Auditorium showcased software, products and services to help customers grow their businesses and address key challenges. “Watch for Securities is a one very good example announced at Sibos, but there are many more – MyStandards, SWIFTRef and our combined product and service packages, to name a few.” says PérezTasso. “The pipeline is stronger than ever!” Lessons drawn from Sibos will inform SWIFT strategy moving forward, PérezTasso concludes. “As we work on formulating our SWIFT2020 strategy (see page 3), we will reflect on the important messages from our community at Sibos and make real choices for the challenges and opportunities ahead.” □ Sibos: the headline numbers How does one judge the success of an event like Sibos? Numbers don’t tell the full story, but they can provide strong evidence alongside anecdotal and qualitative inputs. T o ensure that Sibos continues to evolve in line with the needs of the industry, SWIFT gathers feedback on the event in a variety of ways. The raw data already collected on the number of delegates, exhibitors and sessions suggest that many delegates made full use of the wealth of opportunities to learn and network over the course of four days in Boston. The 7,337 delegates that attended Sibos 2014 at the Boston Convention and Exhibition Center were drawn from a wide range of institutions. Attendees from retail banks, broker-dealers, market infrastructure operators, corporates and investment managers complemented those from SWIFT’s core banking community, reflecting the growing breadth of SWIFT users. They came from far and wide too, with 48 percent travelling from Europe and 14 percent from Asia-Pacific joining the 38 percent from the Americas. But how did they use their time once they arrived? With 200 sessions, 2 400+ speakers and 177 exhibition stands to choose from, more than 2,000 delegates sought the help of the Sibos app to optimise their time. It is clear that intelligence gathering was critical: 2,000 delegates attended one or more conference sessions. Everyone experiences a different Sibos of course, but it seems that many regard an update on SWIFT’s product range and value proposition as an integral part of their Sibos timetable. The SWIFT stand was visited by an average of 363 delegates for every hour that the exhibition hall was open. SWIFT Auditorium sessions were attended by 1,500 delegates during the week, yielding an impressive average of 92 attendees per session. Many feel exhausted after Sibos, but some still have energy to burn. A total of 394 delegates braved a murky Wednesday dawn to participate in the 5K run, with 193 coming in under 30 minutes. So who’s for 10K in Singapore? □ SWIFT at Sibos I Wrap Up edition 2014 2020 foresight The SWIFT Chairpersons Meeting in Boston on the Sunday before Sibos provided a valuable opportunity for the community to consult face-to-face on key issues. T he day before Sibos opened, 145 SWIFT chairpersons representing 130 countries met in Boston for their annual gathering. The meeting was opened by Chris Church, chief executive, Americas and global head of securities, SWIFT, who noted that chairpersons play an essential role in strengthening the SWIFT community globally and in encouraging engagement and action within each national community. Welcoming the delegates, John P. Mckessy, user group chair, SWIFT US National Group advised the assembly to take advantage of the collective experience in the room. “You will find that the job is what you make it,” he said. The Chairperson’s Meeting provided an invaluable opportunity for a global exchange of views on multiple issues, including SWIFT’s strategy for 2015-2020. Discussions were timely, given that the SWIFT2020 strategy is due to be finalised for Board approval by mid-2015. Gottfried Leibbrandt, SWIFT CEO, made clear the value of the chairpersons’ contribution to the exercise. “We have started shaping our strategy vision and in this process we rely on our community input,” he stressed. “The strategy will need to strike a balance between the focus on our core of delivering resiliency and operational excellence and at the same making sure we stay relevant by introducing new products and services.” Leibbrandt reiterated the deep changes that had taken place since 2007, when Sibos was last held in Boston. Despite the financial crisis, however, SWIFT traffic is up, prices are down, and SWIFT continues to deliver on a number of complex projects while maintaining its operational excellence, which, said Leibbrandt, “is our constant focus.” While SWIFT is truly a global organ- SWIFT at Sibos I Wrap Up edition 2014 isation with over 200 countries on the network and many different nationalities among its staff, Leibbrandt pointed out that its activities increasingly extend to supporting regional and local initiatives such as TARGET2-Securities (T2S) in Europe, WAMZ and SADC in Africa and ASEAN in Asia-Pacific. In addition SWIFT is opening new offices, the latest being in Mexico, with more in the pipeline. Leibbrandt was joined by Udo Braun, chair of the SWIFT Pricing Board Task Force and Blanche Petre, general counsel, SWIFT for a question and answer session moderated by Chris Church. Responding to a question about potential future rebates, Braun noted that the Board is looking at options and will make an announcement later in the year. “The aim is to make sure that any surplus is used where it best helps the community,” he commented. Petre meanwhile outlined the share reallocation process to be initiated at the start of 2015. As the process goes, shares Operational excellence is our constant focus. Gottfried Leibbrandt, SWIFT will be allotted based on the 2014 invoice of network-based services. Members will be informed of changes in share allocation in April 2015. In the discussions that followed, potential action areas aroused particular interest among participants at the Chairpersons Meeting: 24/7 domestic real-time payments, financial crime compliance, securities, services for corporates and international person-to-person payments. Participants were given the opportunity to consider the regional implications of these in a series of breakout sessions. There was broad consensus that financial crime compliance is an area where SWIFT can make a valuable contribution in a non-competitive, community role. SWIFT’s solutions for sanctions screening, have for example, generated interest at a national level with initiatives underway in several communities (see page 4). Feedback from the Chairpersons Meeting will be integrated into a discussion paper to be released by SWIFT towards the end of the year, helping to set the tone for the next five years of the SWIFT Community’s collective endeavour. □ 3 Complying with customer expectations Compliance services have rapidly become a mainstream area of engagement for SWIFT. 2 013 marked the year that financial crime compliance became a leading topic at Sibos. “The message at Sibos last year was, ‘It’s time to get started.’ Now the message from the community is, ‘We like what you’ve done so far, and now it’s time to do even more’,” says Luc Meurant, head of banking markets and compliance services, SWIFT. “Gone are the days when we were debating whether financial crime compliance was an appropriate area for us to get involved in. The requests we are getting now are broader and deeper. I don’t think I heard ‘Don’t do that’ once during Sibos. Rather it was, ‘If you do it, do it like this or like that.” Meurant sees this growing comfort with SWIFT’s involvement in financial crime compliance services as the start of a journey for the cooperative. “SWIFT is creating The KYC Registry to enable its community to collectively address the global challenge of KYC compliance,” says Meurant. “We are delighted by the number of banks that are already contributing their information as part of this SWIFTled, industry-driven solution. And from the discussions we’ve had, our customers see The KYC Registry as just the beginning.” Consensus about SWIFT’s involvement in compliance seems to cross the community. “Our financial crime compliance services have been well-received in all regions,” Meurant says, “and from a size perspective there are benefits for both large and small institutions.” Smaller institutions are looking for shared services to reduce the effort and cost of processes such as transaction screening, he suggests, while bigger banks are looking for quality assurance support. Sanctions Screening, for example, appeals to the former, while Sanctions Testing appeals to the latter. “Merging the processing capabilities we are developing for our smaller customers with the quality assurance services we are developing for larger institutions will enable us to deliver even more powerful community-based solutions moving forward,” Meurant says. According to Meurant, SWIFT is massively increasing its resources to meet the challenge. “We are exploring all of our options in order to deliver even more solutions and value for our community,” he says. □ Nigeria drives community-wide Sanctions Screening On the Thursday of Sibos, SWIFT announced that the Central Bank of Nigeria is to implement its Sanctions Screening service and is mandating use of the hosted service by the country’s banking community. The aim is to strengthen the Nigerian financial market and ensure it meets global best practices for financial crime compliance. Sanctions Screening is a hosted subscription service from SWIFT that filters messages in real time and checks against customers’ selected sanctions lists. “With financial crime becoming more prevalent globally, it is now one of the biggest challenges facing the world’s financial industry and every bank must play a role in combatting this challenge,” said Suleiman Barau, deputy governor, Central Bank of Nigeria (CBN). The CBN aims to complete implementation by the end of January 2015. To assist the country’s commercial banks in meeting this deadline, it has created a Sanctions Screening Service Committee, comprising 15 people from various departments, including operations, IT, legal, treasury and payments. The Committee will work with the Nigerian banking community and SWIFT. □ SWIFT National Member and User Groups embrace SWIFTRef Ambassador Programme Understanding the value they can bring to the global financial community, members of the SWIFT National Member and User Groups worldwide are actively engaged in the SWIFTRef Ambassador Programme. “We all expect high quality reference data from SWIFTRef, so we also need to provide good quality national data to SWIFT,” says Rune Olofsson, SWIFT Coordinator at Nordea Bank and CEO of the National Member Group for Sweden. “As active members in the SWIFT National Member and User Groups, the effort is not big as we can easily rely on the network and contacts we all have in our national SWIFT community.” Left to right: Owen Philp, Australia and New Zealand Banking Group and SWIFT User Group Chair for Australia; Hervé Valentin, SWIFT; Stephen Gilderdale, SWIFT; Rune Olofsson, Nordea Bank and CEO of the National Member Group for Sweden; Zorica Srbinova, SWIFT; Ton Versteeg, Rabobank and SWIFT User Group Chair for The Netherlands; Brian Bonar, ANZ Bank and National Member Group and User Group Chair for New Zealand. 4 SWIFT at Sibos I Wrap Up edition 2014 SWIFT at Sibos picture gallery Northern Trust builds Trade and Cash Hub based on ISO 20022 Northern Trust is leveraging SWIFT’s in-depth ISO 20022 knowledge and expertise to prepare, plan and budget for its Trade and Cash Hub Program. Left to right: Patrik Neutjens, SWIFT; Pat Antonacci, SWIFT; Justin Chapman, Northern Trust; Kevin O’Connor, Northern Trust; Robert Goldberg, SWIFT. General Electric utilises SWIFT eStatements for greater efficiency GE continues to on-board banks for eStatements over SWIFT. Left to right: Matt Monaco, SWIFT; Susan Boeri, General Electric Company; Jim Wills, SWIFT. Banco do Brasil extends relationship with SWIFT Banco do Brasil utilises Premium Plus Support to get the most out of its SWIFT connection. Left to right: Aurelindo Almeida Junior, Banco do Brasil; Becky Almodovar, SWIFT; Christina Hutchinson, SWIFT; Celso Souza, Banco do Brasil. LSEG signs Fixed Fee Agreement, further strengthening partnership with SWIFT The London Stock Exchange Group (LSEG) has signed a Fixed Fee agreement with SWIFT, further strengthening their strategic partnership. The agreement will provide flexibility and cost-certainty as LSEG continues to grow, with strong results from CC&G, Monte Titoli and LCH.Clearnet, and the launch of globeSettle, LSEG’s newly established Central Security Depository (CSD) in Luxembourg. Left to right: Antonella Amadei, LSEG; Andre Boico, SWIFT; Serge Harry, LSEG; Erika Toso, SWIFT; Andrea Tranquillini, globeSettle. SWIFT at Sibos I Wrap Up edition 2014 5 Share and share alike Collaborating across industries and institutions on common challenges was a key theme at the second Market Infrastructures Forum. There’s clearly momentum around sharing common needs and challenges. Juliette Kennel, SWIFT O ver 1,000 people took part in the Market Infrastructures Forum at Sibos this year, with standing room only at several sessions. Representation was well balanced across securities and payments industries and from central banks and regulatory bodies. “There’s clearly momentum around sharing common needs and challenges,” says Juliette Kennel, head of market infrastructures at SWIFT. “When polled, participants strongly supported collaboration, with a majority favouring incremental, non-radical collaboration,” Kennel adds. There are a number of non-competitive areas where collaboration would bring cost and efficiency benefits to all across traditional silos. Christine Cumming, COO, Federal Reserve Bank of New York, set the tone in the forum’s opening session, suggesting that it was time for institutions to share more information, knowledge and best practice in order to fight cyber-crime. Market infrastructures (MIs) should also look to shared services for their business continuity and disaster recovery requirements, suggests Kennel. “At the Forum, only 53 percent of respondents thought MIs were resilient enough,” she says. “Achieving high resilience is expensive, so all MIs will need to find the most cost-effective way to do this.” With that in mind, SWIFT worked with seven central banks to develop its Market Infrastructure Resiliency Service (MIRS). Launched earlier this year, MIRS provides a third line of defence for RTGS systems, after their first and second-line back-up systems. MIRS stores data independently and securely, offering fast and effective retrieval. The Bank of England went live with MIRS last February and Hong Kong Interbank Clearing is also to use MIRS to support its RTGS for HKD, USD, EUR and RMB currencies. User demand for domestic low-value real-time payments is also growing – and requires a response that is cost-effective to deliver, says Kennel. “SWIFT is exploring the options for a solution that could be replicable across different markets with varying legacy infrastructure and payment cultures,” she says. “We need to find ways where we harmonise as much as possible, so that we can reduce total cost of ownership for our customers.” Looking ahead, SWIFT is currently consulting on its strategy for 2015 - 2020. For MIs, Kennel sees three key areas of focus: developing MIRS further; helping the industry address the market shift towards real-time payments; and helping institutions transition to ISO 20022 standards – for example to participate in TARGET2-Securities and later TARGET2 at a time and pace that suits their needs. “The adoption of ISO 20022 is part of the medium to long-term strategy for institutions in more mature markets and has become the de facto standard in emerging markets,” says Kennel. “We need to work closely with the market to ensure the roll out is being done in a consistent manner, and we also need to offer services that will help the market to migrate when they are ready and there is a business case to do so.” □ Hear, hear! The Forum approach at Sibos is proving popular with growing segments of the financial services industry. B oston is recognised globally as a popular location for both custodians and investment managers. The inaugural Investment Manager (IM) Forum at Sibos this year drew more than 130 attendees – the vast majority Sibos firsttimers – to talk about regulation, outsourcing and innovation, among other topics. “It was a bit of an experiment, but a successful one,” says Fabian Vandenreydt, head of markets management, Innotribe and the SWIFT Institute at SWIFT. “Over the years it’s fair to say we haven’t had a large contingent of investment managers attending Sibos,” says Vandenreydt. “We continued on page 7 6 SWIFT at Sibos I Wrap Up edition 2014 Adding value to SWIFT’s network and communities SWIFT’s business information products and operational services deliver a unique proposition. A s head of new business development at SWIFT, Stephen Gilderdale has to keep a sharp focus. “Our role is to leverage the capability of our messaging network to develop services that offer unique value,” he says. The result is a set of products and services – including the SWIFTRef, Business Intelligence and MyStandards product portfolios – which is well-used and highly relevant to the SWIFT community. “SWIFT has the network, the standards and the expertise to help its customers meet the current challenges of combining various data flows, structuring analysis and extracting the insights which will help them in their business,” Gilderdale explains. Building on the success of its payments business intelligence products, SWIFT launched Watch for Securities at this year’s Sibos. The new service provides custodians, banks and asset managers with consolidated access to monthly aggregated global, regional and country-level data for securities messages that can be used for benchmarking, analysis of market trends and operational efficiency indicators. The SWIFTRef family of products also has strong momentum. Earlier this year, Bankers World Online was launched, providing a database of reference data for banks that can be useful for excep- Our role is to leverage the capability of our messaging network to develop services that offer unique value. Stephen Gilderdale, SWIFT engaged with them and their custodians with a simple proposition. We said, ‘Look we are in Boston. It’s an opportunity to bring you to Sibos; what are the topics that you think would be relevant to your industry?’ We crafted the agenda with Custodians and IMs together.” Buy-side interest in SWIFT solutions became evident during the week, but, says Vandenreydt, “The point was more to engage different sections of the value chain in the debate.” Several other aspects of the Sibos programme touched on Vandenreydt’s remit. In addition to the Investment Managers’ Forum and Sibos University, he was also responsible for the overall securities programme, the Corporate Forum and Innotribe. He points in particular to the growing recognition of securities as a mainstream focus of the Sibos programme. “The securities industry is a fast moving market,” says Vandenreydt. “At the same time, it represents close to 50 percent of the volume and about 70 percent of the growth in SWIFT traffic.” The Market Infrastructure (MI) Forum focused most notably on resilience and changes in the MI landscape. SWIFT also took SWIFT at Sibos I Wrap Up edition 2014 tions and investigations and for the pre-stages of know your customer (KYC) requirements. “It links well with The KYC Registry,” says Gilderdale. Working with National User Group chairpersons, SWIFTRef’s Ambassador programme is helping local communities to make quality reference data available for specific needs – for example, with local SEPA databases, or collection and maintenance of national bank identifiers. MyStandards meanwhile makes it easy for standards users to manage their standards implementation projects electronically by providing a channel for distributing changes and updates, for example. The new MyStandards Readiness Portal helps banks to streamline corporate onboarding and is being adopted by institutions including Citi and J.P. Morgan. SWIFT is also seeing significant interest in its operational services, including Alliance Managed Operations, says Gilderdale. “While our customers will always want to maintain control over transactions and message flows, it can be very cost-effective to have someone else take care of the technology,” he says. Under the new service, SWIFT can look after set-up and configuration of the Alliance Access interface, monitor the operations on an ongoing basis and handle patches, upgrades and user support. All of these products and services are designed to help customers both maximise and optimise their SWIFT investment. □ the opportunity at Sibos to release a thought leadership study commissioned from Oliver Wyman. The study covers the evolution of capital markets in general and infrastructure more specifically. Vandenreydt also observes an increasing number of securities topics entering the Corporate Forum agenda. “It’s early days, but issues such as collateral management and use of repos by corporates are likely to feature more prominently in Sibos in the years ahead,” he says. □ The securities industry represents close to 50 percent of the volume and about 70 percent of the growth in SWIFT traffic. Fabian Vandenreydt, SWIFT 7 Make plans now for Singapore! © Shutterstock.com : Paolo Omero / Sean Pavone / Spirit of america / Fotomak Sibos 2015 will be held at the Sands Expo and Convention Centre from 12-15 October Because your best interests come first... …Get the right PressInsert_SIBOS_Natixis_175x125_01.indd 1 financial solution. Corporate & Investment Banking Investment Solutions & Insurance Specialized Financial Services www.natixis.com 10/07/14 09:50 Publisher: Rosemary Stone, SWIFT □ Managing editor: Jeffrey Schenck, SWIFT; [email protected]; Tel: +32 485 85 96 89. □ Advertising contact: Dorothée Devillers, SWIFT: [email protected]; +32 2 655 4685. □ SWIFT at Sibos is written and produced by Asset International on behalf of SWIFT □ Printed by Innovative Print Solutions Pte Ltd □ Legal notice: SWIFT © 2014 Reproduction is authorised with acknowledgement of source. All other rights reserved. □ SWIFT, the SWIFT logo, Sibos, Accord, SWIFTReady, and SWIFTNet are registered trademarks of SWIFT. Photographs feature SWIFT employees, customers and partners. □ 8 SWIFT at Sibos I Wrap Up edition 2014