Exceptions and InvestigationsAutomate your payment enquiries to save cost and improve customer service

Agenda

• Your challenges, our solution• SWIFT Exceptions and Investigations• Community adoption and Task Force• Cost / benefit• Practical steps

2Exceptions and Investigations

Payment enquiries challenges

3

Save costs

Comply with

regulation

Reduce risk

Improvecustomer service

Only 5% automated

Labour intensive

Growing volumesdue to FAFT SR7

Payments under investigation

Long turn-around time

No transparency on enquiry status

Exceptions and Investigations

STP

SWIFT E&I value proposition

4

Today SWIFT E&I

• Cost savings

• Reduced risk

• Improved customer service

• Regulatory compliance

• High cost

• Payments pending investigation

• Customer complaints

Mainly unstructured MT

Fax, e-mail, letter, …

Structured MX

Labour intensive

Case

mgmt

appli-

cation

Exceptions and Investigations

E&I brings significant benefitsBenefits calculation at banks with enquiry automation of 0 to 15%, 25.000 – 85.000 enquiries/year

5

Staff cost savingsthanks to automation

Correspondent invoice savings

Cost saving: 10 - 17 EUR / enquiry

- 4 staff at Asian bank

- 8 staff at Austrian bank

- 14 staff at Scandinavian bank

Avoid higher charges on free format enquiries (up to 50%)

Exceptions and Investigations

The SWIFT E&I solution

6

Choice of case

management application

Rulebook

Standards

Messaging

• Easy E&I from SWIFT (service + application)

• SWIFTReady E&I applications from vendors

• E&I as a service from service bureaux

• Your own case management application

Service and standards usage

InterAct

16 XML messages

4 workflows (Claim Non Receipt, Unable To Apply, Modification, Cancellation)

Exceptions and Investigations

Example E&I workflow: Claim non receipt

Bank A Bank B Bank C

MT103

Data is correct.Re -assign to ‘B ’

CreditorDebtor

Claim Non Receipt

MT103

Payment?

Statement

Resolution

Resolution

Claim Non Receipt

Notification of caseassignment

7Exceptions and Investigations

Claim Non Receipt

Data is correct.Re-assign to C

Notification

Resolution

Payment stuck

E&I is easy to implement

Manual message creationAlliance Messenger

Case management applicationEasy E&I from SWIFTChoice from SWIFTReady vendors

• Connected via service bureau• No own case management application• Low enquiry volumes=> Choice from service bureaux Service bureau

Case Managementapplication

Case Managementapplication

“Try & buy” version available

E&I as a service

On-site

8Exceptions and Investigations

Easy E&I

9

Easy E&I

Subscription to E&I Case management application Access to e-training

End-to-end solution

Case management application

Off-the-shelf version, includes GUI Extended version, integrates with

payment application

SWIFTReady + extra functional qualification Self installable Runs in user or automated mode Handles MT and MX standards Integrates with Alliance Access and Entry

Start now, automate later

Powered by

Cost effective EUR 32,000 off-the-shelf version EUR 76,000 extended version

Exceptions and Investigations

Presentation title –

Client or event – dd

month yyyy

10

114 E&I adopters

Example of customer adoption

11Exceptions and Investigations - Q4 2009

E&I industry task force

Concept• Committed large banks to

drive community adoption

• Chaired by a member Bank

• Supported by SWIFT

• Monthly meetings/calls

Rationale• Strong concentration FIN

enquiry traffic: 22 banks do 50%

• Clear business case for large banks

• Small & medium banks need their large correspondents

Members

BNY Mellon, Citi, HSBC, ICBC, Standard Chartered, RZB

Goal• Align migration timeframes

between members

• Exchange experience to support each others go live

• Motivate missing counterparties to join

• Help increase industry awareness

On-boarding criteria

• Open to banks and corporates•Committed to be live and operational with E&I within year following on-boarding•Find Task Force member ready to exchange inquiry volumes with you and to support your application for discussion/approval by the Task Force

Exceptions and Investigations

Contact

B.Kirkpatrick – BNY Mellon: b.kirkpatrick@bnymellon.com

Cost / benefit considerations

13

Costs Benefits

• Save costs• Staff cost savings from automation

(# FTE * FTE cost) • Avoid correspondent invoicing

(# enquiries * current invoice cost * 50%)• Communication cost savings from

reduction of telephone and fax

• Comply with regulation and avoid cost by handling increase in volume, due to FATF VII, without need to add more staff

• Reduce risk by better control on cash positions, less pending payments, less processing mistakes

• Improve customer service from shorter case resolution time, transparency on case status

• SWIFT costs• Registration fee (EUR 2,000 one-time)

• Fee per enquiry message sent (InterAct real-time price)

• Case management application• Software (eg.: 32 KEUR - Easy E&I)• Integration with payment application

• Project cost• Project management • Training• Testing, go live, roll out

Exceptions and Investigations

Practical steps

14

Exploreopportunity to use SWIFT’s

solution

Time

Actively use SWIFT as channel

5

PrepareOperations and Product

teams

4

Enableconnectivity, applications, on-boarding,

legal contracts

3

Defineproduct

proposition and obtain approval

21

SWIFT to explain impact, framework, market evolution

SWIFT to help with business case and ROI calculation

SWIFT can do business assessment

SWIFT can support with choice case management application

Put case management application in place

Subscribe to E&I

Internal and counterparty testing

Prepare correspondent roll-out team

Document new processes, train staff

SWIFT can help with test, go-live and roll-out

Exceptions and Investigations

More information?

• Contact your SWIFT relationship manager

• Contact us at swiftforbanks@swift.com

• Check out www.swift.com

15Exceptions and Investigations