mt798 market adoption
DESCRIPTION
Market Adoption of SWIFT's MT798 standards for corporate-to-bank documentary trade finance.TRANSCRIPT
SWIFT’s Trade and Supply Chain team
10 October 2012
Join our LinkedIn group Supply Chain on SWIFT
Facilitating multi-banking solutions in documentary trade finance using SWIFT’s MT 798 standards
MT 798 market adoption
Market adoption of the MT 798 standards 2
Agenda
• Corporates, Banks and Solution Partners adopting the MT 798 standards
• Definition of Industry Standards• Industry standards enable competitive vendor solutions to interoperate• Best practices for multi-banking in trade and supply chain finance
• Issues with proprietary formats and rulebooks• Issues for banks of non-standardised multi-bank options• Issues for corporates of non-standardised multi-bank options
• Conclusion• Contact details
Market adoption of the MT 798 standards 3
Corporates adopting the MT 798 standardsSome are already using SWIFT for payments but this is not a pre-requisite
Corporates Use ofMT 798 for …
Use ofMT 798 as …
Live Usage
Multi-bank Solution
ArcelorMittal International
Export LCs Exporter Live Misys
Alcatel-Lucent Guarantees Exporter Live Surecomp
Saudi Aramco Export LCs Exporter Live In-house
Metro Group Buying
Import LCs Importer Live In-house
Metsä Finance Export LCs Exporter Q4 2012 GlobalTrade Corporation
Reliance Industries
Import LCsExport LCs
Importer andExporter
Q4 2012 In-house
Safran Guarantees, LCs
Importer andExporter
Q4 2012 GlobalTrade Corporation
Voith Guarantees, Export LCs
Importer andExporter
Q4 2012 Surecomp
Additional corporates are gradually disclosing their adoption of MT 798
Market adoption of the MT 798 standards
27 banks adopting the MT 798 standards12 from the top20 Trade banks
4
All leading Trade Finance vendors are accredited by SWIFT
SWIFTReady Trade Finance
• Bank-to-bank standards• Corporate-to-bank
standards
SWIFTReady for Corporates – Trade
Finance
• Corporate-to-bank standards
Vendor Trade Finance Solution
China Systems
Eximbills
CSI BankTrade
Misys Trade Innovation Plus
MIT CREDOC
Sopra Evolan IB
Surecomp DOKA 5, IMEX
Bank Corporates
Vendor Trade Finance Solution
GTC GlobalTrade Corporate
Misys Misys Trade Portal
Pinnacle Solutions Incorporated (PSI)
Synergy Trade Services (TS) Multi-bank Corporate Site
5Market adoption of the MT 798 standards
Note: Surecomp is ready but not certified in 2011
Market adoption of the MT 798 standards
Industry standardsDeveloped by international standardisation bodies
Industry standards are industry-owned and technology-neutral. They offer a dependable legal and operational framework.
• Trade Finance instruments(UCP600, URDG758, ISP98, URC 522, URBPO, …)
• MT standards(for L/Cs, Demand Guarantees, Collections)
• ISO 20022 standards (for BPO)• ISO 9362 Business Identifier Code (BIC)• ISO Country codes, Currency codes, …
6
Market adoption of the MT 798 standards
Industry standards support end-to-end flows
Streamline the L/C, Guarantees and open account trade transactions
Automate workflow of the trade life cycle to reduce cost
Accelerate handling of discrepancies and settlement
Move to paperless transaction processing
Enhance visibility on credit lines
Application, amendment, …
Advising / confirming banks Sellers
MT798ISO 20022
Advice, confirmation, amendment, …
MT798ISO 20022
MT7XXISO 20022
7
Internet
Issuing banks
Buyers
Internet
Inter-bank flows
Market adoption of the MT 798 standards
Industry standards enable competitive vendor solutions to interoperate
Business process-level interoperability between various software solutions
Increased choice of vendor solutions in competitive space
No need for banks to join multiple corporate portals
Reduced technical, operational and legal costs
No vendor lock-in
Application, amendment, …
Advising / confirming banks Sellers
MT798ISO 20022
Advice, confirmation, amendment, …
MT798ISO 20022
MT7XXISO 20022
8
Internet
Issuing banks
Buyers
Internet
Inter-bank flows
Market adoption of the MT 798 standards 9
Best practices for multi-banking in trade finance
Industry standards enable banks and corporates to increase efficiency and minimise costs when respecting all of the above best practices
• ICC Banking Commission's rulesRules• MT4xx / MT7xx standards• ISO 20022 TSMT standardsMessages
• Business Identifier Code (BIC or ISO 9362) for banks and corporatesIdentity
• SWIFT for bank-to-bank (FIN and TSU)• SWIFT or Internet for corporate-to-bankChannel• SWIFTReady vendors• In-house developmentSolutions
Market adoption of the MT 798 standards 10
Issues with proprietary formats and rulebooks
Avoid proprietary solutions and vendor lock-in
• Some Trade Finance vendors have been trying to impose their technology-specific formats and proprietary rulebooks in the C2B trade finance space– Their goal is to intermediate the corporate-to-bank contractual relationship,
which is actually not necessary as their role is at technology level– They also wish to force banks into their systems using corporate pressure– Corporates and banks adopting such platforms are locked into the vendor-
specific rules, formats and technologies– Software solutions should be independent of each other and interoperate
using Industry Standards (as it is the case for payments)• Global Trade banks have resisted adopting those proprietary solutions as each
implementation generates huge implementation and running costs (software, legal, operational, technical); usually most fees are charged to the banks whereas those solutions target the corporates
• Using Industry Standards, any change of software solution performed by one party is not impacting the other party (technology independence).
Market adoption of the MT 798 standards 11
Issues for banks with non standardised multi-bank options
Scenarios:
Major issuesfor banks:
Corporate using a vendor platform forcing banks to adopt proprietary formats, security
and rules
Corporate re-using its FI BIC and the MT7xx
messages on the bank-to-bank FIN
service
Corporate using a vendor BIC and the MT798 standards on the bank-to-
bank FIN service
Corporate using MT 798 standards with its
own BIC in SCORE
Increased vendor and
technical costs
Additional fees for banks to pay to the
vendor; additional IT integration
No fee for banks to re-use SWIFT and SCORE for
trade finance
Increased operational
costs
Additional vendor-specific operational
processes for limited number of
clients
Additional customer-specific
operational practices for banks
to develop
Single trade-specific process for all multi-bank
corporates
Increased legal
complexity and costs
Parties need to develop vendor-
specific contractual arrangements
Parties need to develop corporate-specific contractual
arrangements
Parties need to develop vendor-
specific contractual arrangements
Standardised SCORE agreement for cash and
trade
Increased KYC risks
Depends on vendor-owned legal
frameworks
Lack of visibility on corporate identity, resulting with likely
KYC issues
Lack of full visibility to end-corporate identity, resulting with likely KYC
issues
Standardised SWIFT registration for corporates
and re-use of BIC by corporate
Market adoption of the MT 798 standards 12
Issues for corporates with non standardised multi-bank options
Scenarios:
Major issuesfor
corporates:
Corporate using a vendor platform forcing banks to adopt proprietary formats, security
and rules
Corporate re-using its FI BIC and the MT7xx messages on the bank-to-
bank FIN service
Corporate using a vendor BIC and
the MT798 standards on the bank-to-bank FIN
service
Corporate using MT 798 standards with its
own BIC in SCORE
Increased vendor and
technical costs
Need for multiple solutions when any
of the banks required do not
support the vendor platform
Proprietary development: so
packaged solutions and costs cannot be
shared
Re-use SWIFT connectivity in use for
treasury and cash management
Not following industry
standards and best practices
Dependency on single vendor solution: less
competition and technical lock-in
Not able to benefit from full MT798
functionality
Corporate does not benefit from SWIFT's FIN
Responsibility and Liability (R&L)
Single process with all banking partners
Increased legal
complexity and costs
Parties need to develop vendor-
specific contractual arrangements
Parties need to develop corporate-specific contractual
arrangements
Corporate cannot benefit from
standardised legal documentation
Standardised SCORE agreement for cash and
trade
Increased KYC risks
Depends on vendor-owned legal
frameworks
Lack of visibility on corporate identity, resulting with likely
KYC issues
Lack of full visibility to corporate
identity, resulting with likely KYC
issues
Standardised SWIFT registration for corporates
and re-use of BIC by corporate
Market adoption of the MT 798 standards 13
ConclusionMulti-banking in trade finance is now a reality
• All trade banks in the world use SWIFT's MT7xx standards with their correspondent banks
• The leading trade finance banks are now extending the use of those standards to the corporate world through the MT 798; all leading vendors have adopted the MT 798
• The MT798 can be used on any channel (Internet, SWIFT) and with any software solution; the SWIFTReady certification ensures inter-operability between competitive vendor solutions
• The growing adoption by all leading players confirms the immediate relevance of the MT 798 industry standards to the trade finance market
Avoid vendor lock-in by pushing back on proprietary portals/formats
Market adoption of the MT 798 standards
Contact our SWIFTReady Trade Finance 2011 partners
14
Partner Solution Contact
Joel Schrevens, Digby [email protected]@chinasystems-me.com+32 475 904413
Selene Chan, James [email protected]@banktrade.com+ 44 7941 325716
Olivier Berthier, Stephan Nouy [email protected]@misys.com+33 (0)1 53 00 70 13
Jean-Luc [email protected]+ 41 213 188 181
Marina [email protected]+33 5 6573 4651
Murray [email protected]+1 201 716 1236
Misys TI Plus
Evolan IB
DOKA 5, IMEX
Contact our SWIFTReady for Corporates - Trade Finance 2011 partners
Partner Solution Contact
Jacob Katsman, Nick [email protected]@globaltradecorp.com+1 416 627 8520 / +1 416 661 8520
Olivier Berthier, Stéphane [email protected]+65 6416 [email protected]+33 (0)1 53 00 70 13
John Nash+44 7587 088 [email protected]
Misys Trade Portal
GlobalTrade Corporate
PinnacleSolutionsIncorporated (PSI)
Synergy Trade Services (TS) Multi-bank
Corporate Site
Note: Surecomp is ready but not certified in 2011
Market adoption of the MT 798 standards 15
16
Contact the MT 798 bank product teams
Market adoption of the MT 798 standards
Banks adopting MT 798 Country MT 798 Product contactBank of America US Paul JohnsonBanque Saudi Fransi SA Shafeek H. Al-ManameenBayerische Landesbank DE Florian SeitzBNP Paribas FR Eric HenryBNY Mellon US Andres RamosCitibank US Fran MartellCM CIC FR Tony CroizerCommerzbank DE Sven MuellerCrédit Agricole CIB FR Patrick BoiteauDanske Bank DK John EnemarkDeutsche Bank DE Frank BotheGulf International Bank SA Mathew SilvaHSBC HK Kate HanING NL Egbert JansenJP Morgan Chase US Merlin DowseKBC BE Karen SterckxLBBW Landesbank Baden Württemberg DE Rolf SeidelNatixis FR Olivier LabordeNordea FI Soren AndresenRBS US Deborah SeliskiRiyad Bank SA Medhat SanuriSamba SA Abdulkader A. BazaraSociété Générale FR Corinne BakokStandard Chartered SG Ashutosh KumarThe National Commercial Bank SA Omar YassineUBS AG CH Erwin FreiburghausUnicredit AT Markus Wohlgeschaffen
Market adoption of the MT 798 standards 17
Contact us now!
Neil Gray Corporate Sales – UK/Ireland/NordicsJan Heinsbroek Corporate Sales – NordicsRoger Inderbitzin Corporate Sales – SwitzerlandAshley Schmidt Media Relations – AmericasSandra Gavard Media Relations – Asia PacificThea George Media Relations – EMEA
Email is [email protected]
André Casterman Head of Banking and Trade solutionsPatrick Krekels Legal CounselNadine Louis Supply Chain Finance and Business IntelligenceMarie-Christine Diaz Supply Chain FinanceDavid Hennah Supply Chain FinanceAline Henrard Supply Chain FinanceRobert Marchal StandardsDavid Dobbing StandardsAngéline Tan StandardsKineth Yuen Standards – Asia PacificAnyal Hozee Partner ManagementChris Conn Business Development – AmericasJames Wills Business Development – AmericasConnie Leung Business Development – Asia PacificRobert Schneider Business Development – EMEAUrs Kern Business Development – EMEAMatt Monaco Corporate Sales – AmericasPaula Goldsmith Corporate Sales – AmericasZelda Anthony Corporate Sales – Asia/PacificThomas Peeters Corporate Sales – BeneluxSebastian Niemeyer Corporate Sales – AT/DE/CHArnaud Dupuy Corporate Sales – France
Market adoption of the MT 798 standards 18
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