bf manila 2014 - swift for corporates
DESCRIPTION
Presentation on SWIFT for corporates during the age of cash and trade session at SWIFT Business Forum Philippines 2014.TRANSCRIPT
SWIFT for Corporates Streamlining cash and trade management
Franck de Praetere Head of Payments and Trade Markets Damien Dugauquier Commercial Manager, Corporates
Agenda
• Setting the scene (20’) + Regional and local context on cash and trade
• Speed-meetings (3 times 10’) + Trade: Bank Payment Obligation + SWIFT for Corporate: using SWIFT from a corporate perspective + SWIFT for Corporate: using SWIFT from a bank perspective
• Panel discussion (25’) + Meg L. San Pedro: Lafarge Group Treasury + Alan K. Wong, Bank of America Merril Lynch
• Wrap-up
2
Year on Year quarterly growth rates
SWIFT as a barometer of the economy GDP and SWIFT Payments show a similar trend
* OECD Europe Q4 2010 is provisional Source: SWIFT, OECD
3
YTD Growth for PH: 10.5%
Philippines : SWIFT trade and payment corridors
4
20%
11% 10% 10% 10%
4% 4% 3% 3% 2%
17%
9%
0%
4%
14%
8% 6%
7% 6%
1%
0%
5%
10%
15%
20%
25%Customer payments Letters of credit
▪ 2/3 % of payments are intra-regional ▪ 1/3 of import from CN/HK
20% of customer payments sent from PH end to a beneficiary in China
Correspondent banks
Account receivable
Treasury management
Document handling • Reporting: Account statements • BPO/TSU, MT798
Correspondent banks
Account payable
Treasury management
Trade Finance • Payment initiation • FX, money markets confirmation • Reporting: Account statements • BPO/TSU, MT798
What is SWIFT for corporate?
5
6
The economic shift accelerates internationalisation of Asian corporates
0
200
400
600
800
1000
1200
1400
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Num
ber o
f cor
pora
te g
roup
s
Per corporate group turnover & banking partners
Corporates by annual turnover (USD)
Corporates by number of banking partners
$1-10Bn 28%
>$10Bn 31%
<$1Bn 41%
>20 banks 13%
10 to 20 banks 21%
5 to 9 banks 29%
<5 banks 37%
>$10Bn 30%
$1-10Bn 34%
<$1Bn 36%
63% of SWIFT-connected corporates deal with 5 banks or more
64% of SWIFT-connected corporates have a turnover >$1Bn
7
Corporate group connectivity
Message Type (FIN) / Business Area (FileAct) - Live 2013
Traffic Overview
Top 25 MTs # live MT messages sent & received by
corporates Distribution
940 26,148,950 43% 942 14,715,363 24% 103 4,743,167 8% 101 4,473,263 7% 900 4,391,724 7% 300 2,467,653 4% 199 1,124,713 2% 910 771,371 1% 515 394,879 1% 535 394,168 1% 210 350,217 1% 998 308,478 1% 950 195,469 0% 202 144,973 0% 941 138,229 0% 320 94,998 0% 548 79,836 0% 536 59,075 0% 999 53,121 0% 96 50,446 0%
537 47,216 0% 545 34,948 0% 547 31,482 0% 798 27,287 0% 304 26,632 0%
Top10 FileAct Request Type
Business areas
# live FileAct files sent and received
by corporates Distribution
CAMT 5,622,284 43% PAIN 5,601,592 43% PACS 1,533,870 12% ADMI 148,174 1% XSYS 13,651 0% TSMT 11,027 0% REDA 5,281 0%
eStatements 2,736 0% ACMT 1,947 0% SEMT 1,863 0%
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Reporting to end
customer 68%
Customer Credit
Transfers 8%
Foreign exchange
6%
Others 18%
Focus on Asia
S4C a source of differentiation
9
Corporate Banking
Be the Gateway to Philipines
• Capture new business from emerging and OECDs corporate markets • Enable “ the best bank at best at the best place” model through access with
international standards and industry platform • Increase market share
Enabling internationalisation of domestic corporates
• Be the gateway for internationalization of PH corporates (mid-caps and MNCs) • Adopt international standards (MX/MTs) to support Shared Service and Regional Treasury • Deepen your relationship, source of innovation and best practices
RMB
• Link physical to financial flows
• Support increasing demand for RMB as trade settlement currency
Technology & Standards
• Enable simple and
efficient on-boarding process
• ISO Standards • 3SKEY
Bank readiness certification Entry & Advanced comparison
Criteria Advanced certification Entry certification
Participate in SCORE Yes Yes
Receive FIN MT 101 and send MT 940 Yes Yes
Send MT 942 Yes No
Send/Receive files over FileAct* Yes* Yes*
Testing facilities & scripts Yes Yes
Operational documentation Yes Yes
Have SWIFT-knowledge and trained sales staff Yes Yes
Offer Basic commercial documentation Yes Yes
Provide a dedicated SWIFT-page on website Yes Yes
*Bank should comply with FA implementation guide
10
Americas 2%
Asia Pacific
83%
Europe, Middle East & Africa 15%
Proportion of Counterparty regions for Export (MT700 value received by Asia)
Intra-Asia accounts for more than 75% of Asia’s overall Trade Finance value Asia’s MT700 counterparty regions in September 2013, based on underlying value
*Domestic flows and central banks excluded
Americas 6%
Asia Pacific
76%
Europe, Middle East
& Africa 18%
Proportion of Counterparty regions for Import (MT700 value sent by Asia)
Source: SWIFT Watch
2012
0120
1202
2012
0320
1204
2012
0520
1206
2012
0720
1208
2012
0920
1210
2012
1120
1212
2013
0120
1302
2013
0320
1304
2013
0520
1306
2013
0720
1308
2013
09
USD
CNY
JPY 90% 79%
5% 18%
Jan. 2012 Sept. 2013
Top 5 Currencies Used for Intra Asia Trade Finance
Others HKD
EUR JPY
CNY USD
Intra-Asia RMB trade settlement up 67% over 2013, and accounts for 18% Intra-Asia trade
RMB and Asia very important
11
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2013Q1 2013Q2 2013Q3 2013Q4 2014Q1
Other
PHP
CNY
JPY
SGD
HKD
EUR
USD
What does it mean for the Philippines?
12
▪ Focus on Import LCs from CN and HK: currency
▪ Focus on Import LCs from CN and HK: maturity
0% 20% 40% 60% 80% 100%
China
HongKong
0 -30 days 31 - 60 days 61 - 90 days
91 - 180 days > 180 days
By analyzing the RMB business flows: • RMB now 2nd most used currency in trade finance, overtaking the Euro • RMB Letters of Credit and Collections grew from an activity share of 1.89% in
January 2012 to 8.66% in October 2013
And in trade, RMB growing very rapidly
13
Merchandise trade volumes growth forecast ….increasing the demand for SCF .
0102030405060708090
100
OALC
USD 2 trillion
USD 6 trillion
USD 33 trillion
14
The Bank Payment Obligation (BPO) A new alternative instrument for trade settlement
A BPO is an irrevocable undertaking given by one bank to another bank that payment will be made on a specified date after a successful electronic matching of data according to an industry-wide set of rules.
New ICC Uniform Rules for BPO (URBPO) Implementation date: July 2013
Designed to complement and not to replace existing solutions
15
Industry Standards for BPO
Any channel / any format / any
solution
Trade Matching Application
Any channel / any format / any
solution
Seller Buyer
1 2 3
UR Bank Payment
Obligation
Indu
stry
sta
ndar
ds
Com
mer
cial
so
lutio
ns
• SWIFT's Trade Services Utility (TSU)
• Bank portal • SWIFT's SCORE • Paper
• Bank portal • SWIFT's SCORE • Paper
16
Agenda
• Setting the scene (20’) + Regional and local context on cash and trade
• Speed-meetings (3 times 10’) + Trade: Bank Payment Obligation + SWIFT for Corporate: using SWIFT from a corporate perspective + SWIFT for Corporate: using SWIFT from a bank perspective
• Panel discussion (25’) + Meg L. San Pedro: Lafarge Group Treasury + Alan K. Wong, Bank of America Merril Lynch
• Wrap-up
17
Chatroom #1 - Trade
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Chatroom #1 - Trade
19
Chatroom #2 – Getting ready to support Corporates
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Chatroom #3 – How SWIFT works for Corporates
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Chatroom #3 – How SWIFT works for Corporates
22
Agenda
• Setting the scene (20’) + Regional and local context on cash and trade
• Speed-meetings (3 times 10’) + Trade: Bank Payment Obligation + SWIFT for Corporate: using SWIFT from a corporate perspective + SWIFT for Corporate: using SWIFT from a bank perspective
• Panel discussion (25’) + Meg L. San Pedro: Lafarge Group Treasury + Alan K. Wong, Bank of America Merril Lynch
• Wrap-up
23
Thank you
24