innovation in payments: why infrastructure matters
Post on 28-Jul-2015
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Philippe Dirckx, Managing Director, Markets & Initiatives, SWIFT Asia Pacific
Innovation in payments:
Why infrastructure matters Standards, Resiliency and Payment System
Innovation
Correspondent banking disintermediated at origination
Local
bank
Local
bank
PSP PSP
ACH ACH
GTB GTB
End
customer
(retail, SME,
corp)
End
customer
(retail, SME,
corp)
Correspondent Banking
Co
rre
sp
on
de
nt
Ba
nk
ing
dis
inte
rme
dia
tio
n
Transfer
Agent Transfer
Agent
*Icons are
representative
example of each
model
Rationalising the hype
Peer to peer,
no correspondent
banking ‘side effects’:
delays, costs,
counterparty risk
bi-lateral
agree-
ments
Real time,
continuous
payments
Lower cost
for FI
Open source
internet protocol,
distributed ledger
End-to-
end
SLA Value
dates?
Back
office
24/7
Sanction
screening
Liquidity
trapped
Reconci-
liation
Security
Confiden-
tiality
Integra-
tion
Gover-
nance
Release
mngt
Cla
im
Ch
allen
ge
Bank-grade payments system requirements
Addressing
real
challenges
Compliant Clear ROI for banks
Scalable
There is a problem with payment messaging today
Payer
Bank A
Payment
System
Receiver
Bank B
MT 103
Cross-border
Domestic
Person-to-person (P2P)
Corporate
Government
Different formats; paper; slow; errors
Person-to-person (P2P)
Corporate
Government
The solution: ISO 20022 is rapidly replacing legacy
standards 200 initiatives
Under discussion > planned > rollout > live
90 countries
8
Payment transactions
Payment transactions
Payment settlement
system
Payment system resiliency is only as strong as
the weakest link
MIRS:
Market
Infrastructure
Resiliency
Service
SWIFT
Alliance
SWIFT
Alliance
SWIFT’s messaging and network resiliency
Customers
Secure IP Network (SIPN)
Backbone Access Points
SWIFT Backbone Network
Internet
Partner Networks
(AT&T, Orange, Colt, BT/Infonet)
OPC 1 OPC 2 OPC 3
CCC 1 CCC 2 CCC 3
• 350+ business
continuity
exercises
• 11,000 IT
changes
Operating centres
Support
environment
Nov 2014 SWIFT was selected to provide Australia’s New
Payment Platform (NPP) set to go live in 2017
Key Features of the NPP Solution
24/7 availability
Real-time, low latency messaging in-country
ISO 20022
Addressing database service
Re-use existing SWIFT Infrastructure
Lower cost to MI and community
New Payments Platform innovative architecture
14
• Real-time
• 24/7
• ISO 20022
Addressing
database
Connected services
such as Mobile
Payments
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