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Secure and Reliable
Messaging Service
Provide Community Solutions
Custodian of
Message Standards
Who we areSWIFT is the global provider of secure financial messaging services
SWIFT is the global provider of secure financial messaging services
6,000+Securities Industry Users
4billionMessages per year
20millonPeak day messages
99.999%Availability
Supporting Securities
Participants since 1987
Sub-Sahara Africa Business Plan
Africa is rising – we want to be part of this – Being part of it means contributing and
benefiting from thisVision
Ambition To double footprint over the next five years
MissionTo grow SWIFT’s market share across all market segments and all SWIFT services and solutions
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Sub-Sahara Africa Business Plan - Challenges
Being “close to the customer”
Providing “tailored
solutions” Offer “competitive
pricing”
Ability to penetrate
new market segments
Stay abreast of the market
Sub-Sahara Africa Addressing the Challenges
• Open satellite offices in Ghana (Accra) and Kenya (Nairobi)– Ability to service the regional hubs
• Establish business development capacity– Unlock new market segments
• Strengthen the sales support capacity• Entrench relationship with the Business Partner• Establish Africa Advisory Group
BUT – this abundance of information/data makes us feel like we are trying to drink water from a fire hydrant
SWIFT connects the financial community10,000+ members globally
Banks
Asset Managers
Corporates
Fund Administrators
Broker-Dealers
Transfer Agents
Clearing & Settlement Systems
Custodians/ Depositories
• Debt instrument
• Represent a loan
• Issuer = government or corporate borrower
Financial instrument types
EquitiesBonds
• Investment defining ownership in a company
• Companies issue shares to raise funds
Derivatives
• Linked to bonds, equities or commodities
Investment Funds
• Managed pool investment
Transaction lifecycle
Modelling
Re-balancing
Compliance
Order Management
Confirmation
Settlementinstruction
Portfolio maintenance
Reconciliation
The impact of automation on trade volumes
2013 Trades vs 1998 2013 1998 % Change
Trades 38,964,070 3,656,073 965.74
Volume (Mil) 63,892 34,405 85.70
Value (R Mil) 3,981,618 319,338 1,146.84
Internationalization of the CSD business
New Regulations
Industry Integration
• Attract and satisfy the service requirements of more sophisticated foreign participants
• Offer services on other markets (if regulation allows)• New competitive situation with new entrants
To improve efficiency at all levels (CPSS-IOSCO)Increased resiliency needs with software diversityPushing towards • new services such as trade repository, collateral management • higher automation, especially in S&R space (e.g. T+2)
Major regional projects (e.g. SADC, EAC,ISO 20022 adoption) New business models emerging (e.g. Corporate Actions, Collateral Management)
CSD market trendsCentral Securities Depositories (CSDs) evolve…..
CSD Business flows supported through SWIFTCovering all aspects of CSD business
Settlement Services
Investor Services
Issuer Services
Financing Services
Information Services
Custodian/Bank
CSD
Broker-Dealer
Other CSD
CSD community Funds Services
Revenues/ Portfolio
The leaking pipe syndrome
Net Profits/ Portfolio
Performance
Multiple Standards
Complex Products
Manual Processes
Legacy Systems
Lack of Systems Integration Multiple Links
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Where to start…..at the beginning
• Focus on –
• Standardisation – across the market
• Automation
• ISO15022 is widely uses and the most accepted protocol globally in the post trade space.
• Standards are not stagnant and continue to evolve with market needs and technology, hence ISO20022
• Need even more automation and standardisation between parties – less time to process errors as settlement cycles decrease
• In other words there is a need for real-time systems allocation resulting in contract note and settlement allegements being generated within seconds thereafter
• Failed Trade processing – focused on automation
• DR/BCP reliance – less time to fix issues
MyStandards how does it work ?
www.swift.com/mystandards
Implement
Publish PDF, Excel & XML schema
BrowseIndividual consumers
Premium Licence Owner
Publish
Analyse
Capture guidelines
Collaborate
Browse
MI FI MPG
The key market players
Investment Managers
Brokers
Dealers
Stock Exchanges
Custodians - Global, Regional, Local/Sub
Central Securities Depositories
SWIFT broadly used in Securities marketsmore than 50% of SWIFT’s total traffic is securities messages (2014)
Investment Manager
Execution venue
Broker
CSD
Clearingvenue
ICSD
Bank Custodian/Settlement
Agent
Global Custodian
Post Trade, Pre-settlement: Trade confirmation
These messages are typically sent between a client (e.g. IM) and a financial institution (e.g. Broker / Dealer) or service provider (e.g. electronic trade confirmation provider) to provide early information about a deal, to instruct the allocation of a block trade, to confirm the details of a trade, and to affirm the details of a confirmed trade.
Cash Reporting
Cash management and payment status details are exchanged using the Category 9 FIN messages or XML cash management messages. These messages are exchanged between financial institutions, either on behalf of themselves, other financial institutions, or customers.
Input
Our purpose is to assist our user community to reduce risk, cost improve efficiency and performance
Output
Cost Reduction and Improved Performance
In a nutshell
• Network: highly-resilient, high availability, worldwide, secure, internet • Messaging: message/file/browse, authentication, non-repudiation, optional validation• Interfaces: industrial size to standalone, highly-resilient, high availability, secure• Security: SWIFTNet PKI (on SWIFTNet) or 3Skey (for other comms solutions)• Integration: Transformation, enrichment, fully integrated with interface
Technology
• ISO standards: ISO 15022, ISO 20022• Other FIN standards: MT for payments, FX, trade• Tools: MyStandards, Readiness Portal
Standards
• Support: 24/7/365 follow-the-sun support, support centres in all time-zones• Project management• Technology support: reviews, implementation & operational• Standards: consulting• Business: internal reviews
Services
How do Securities Markets benefit from the adoption of SWIFT?
• Improved Efficiency• Reduction in Risk• Reduction in Costs• The ability to manage by exception rather than process• The Ability to become volume insensitive• Delivery of value added services• Internal System Connectivity• Industry Connectivity• Attractive to regional & international investors• Increased Competitiveness• International Standards• Secure & Reliable message delivery
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• By adopting international standards and using the SWIFT network the market players achieve best in class processing
• Able to meet CPMI/IOSCO and G30 standards
• Effectively operate both domestically, regionally and globally
Conclusion
Conclusion