SWIFTNet solution for bulk payments processing in Albania

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SWIFTNet solution for bulk payments processing in
Albania

• Joëlle Lockman
• Business Manager
• Banking Market Infrastructures

Tirana, 17 November 2004
2
Agenda
SWIFTNet expands the options
SWIFTNet solution for ACHs
SWIFTNet interfaces
Recommended configurations and related costs
Pricing
Benefits for ACHs and financial institutions
3
how SWIFT is helping the industry improve
efficiency and reduce costs in the area of low
value / retail payments
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SWIFTNet expands the options
Speed
Interactive queries and commands
Central database viewing
InterAct
Browse
High-value payment by payment FIN
Bulk payments Reporting
FileAct
Hugevolumes
Moderate Volumes
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SWIFT provides a total solutionfor payments and
settlement systems
FIN FIN Copy InterAct FileAct
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SWIFTNet infrastructure for SSP
Bank B
Bank A
SWIFTNet
Internal payment system
SWIFTNet FIN
SWIFT interface
payment message
SWIFTNet FIN Copy
SWIFTNet FileAct Real-time reporting
settlement request
authorisation/
refusal
SWIFTNet Browse On-line visualisation of
information
SWIFTNet InterAct Real-time cash reporting
Payment module (PM)
Central SWIFT interface
Payment processing Bank A Bank B
Information control module (ICM)
SWIFTNet services
FIN/FIN Copy
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SWIFTSolution for bank-to-ACH
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Agenda
SWIFTNet expands the options
SWIFTNet solution for ACHs
SWIFTNet interfaces
Recommended configurations and related costs
Pricing
Benefits for ACHs and financial institutions
9
SWIFTNet FileAct addressesyour present
end-to-end bulk payment needs
SWIFTNet FileAct
SWIFTNet FileAct
SWIFTNet FileAct

• Standardised file transfer platform
• Support of existing file formats
• Global reach
• Highly secure and cost effective

Customer
Customer
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SWIFTNet solutionfor bank-to-ACH bulk payments

• ACH acting as a service provider
• Administers its dedicated SWIFTNet closed user
  group
• Defines use of FileAct in many-to-one or
  many-to-many topology
• Decides on use of InterAct, Browse and FIN
• Develops and sells bulk payments processing
  service
• Financial institutions access ACH over existing
  SWIFTNet connectivity

ACH
Solution for bank-to-ACH bulk payments
SWIFTNet FileAct
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SWIFTNet Services for bulk payment solution
Complemented with SWIFTNet PKI and SWIFTXML
standards
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Three complementary core SWIFTNet messaging
services
Messaging
Secure, reliable, and STP-oriented. Appropriate
for exchange of individual structured financial
messages and short reports.
SWIFTNet InterAct
File transfer
SWIFTNet messaging
SWIFTNet FileAct
Secure, reliable, and flexible. Appropriate for
exchange of batches of structured financial
messages and large reports
Browsing
SWIFTNet Browse
Secure browsing with standard internet
technologies. Appropriate for data exchange in
thin-client browser-based financial solutions.
To be used with SWIFTNet InterAct and FileAct.
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All solutions are based on SWIFTNet FileAct
Sender
Receiver
1
File transfer initiation
2
Actual file transfer
3
Delivery notification (optional)
File transfer status
File transfer status

• Authenticity, integrity, confidentiality,
  non-repudiation
• Flexible central routing
• Any type of file up to 250Mb, compression
  supported

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SWIFTNet FileAct is used in real-time and
store-and-forward mode
Store-and-forward file transfer
Store-and-forward file transfer
Typically used to reach a large number of
counterparties
Real-time file download
Typically used in the context of
person-to-application solutions (with SWIFTNet
Browse)

• Example
• Used in store forward mode by service provider
  as sender of files
• Directory delivered to (requested by)
  participants in real-time pull mode

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Key characteristics of SWIFTNet FileAct
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Three complementary core SWIFTNet messaging
services
Messaging
Secure, reliable, and STP-oriented. Appropriate
for exchange of individual structured financial
messages and short reports.
SWIFTNet InterAct
File transfer
SWIFTNet messaging
SWIFTNet FileAct
Secure, reliable, and flexible. Appropriate for
exchange of batches of structured financial
messages and large reports
Browsing
SWIFTNet Browse
Secure browsing with standard internet
technologies. Appropriate for data exchange in
thin-client browser-based financial solutions. To
be used with SWIFTNet InterAct and FileAct.
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SWIFTNet Browse overview
Service user
Service provider
SWIFTNet
Workstation (running SWIFTAlliance WebStation and
a standard Browser)
Web Server and SWIFTNet Link
SWIFTNet Browse enables secure browser-based
access (over SIPN) from an operator using a
standard browser and SWIFTAlliance WebStation to
a service providers web server
Typically used in conjunction with
SWIFTAlliance Gateway
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SWIFTNet Browse overviewSWIFTNet Browse
transparently combines two communication
mechanisms
HTTP-S channel only authenticates the system of
the end user
Service user
Service provider
Using non-managed Web certificates
HTTP-S
User access rights
SWIFTNet
User ok? Limits
E.GriegF.Chopin
75,00050,000
? ?
Mr E.Grieg
InterAct/FileAct
Web Server SNL
Workstation
InterAct / FileAct channel authenticates the end
user
Using managed SWIFTNet PKI certificates
SWIFTNet Browse allows to initiate InterAct or
FileAct exchanges via a secure browser link. By
doing so sensitive data can be exchanged with all
the security and reliability inherent to the
SWIFTNet platform, while preserving the benefits
of a browser-based environment.
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Key characteristics of SWIFTNet Browse (when
used with SWIFTNet InterAct/FileAct)
Highly secure reliable

• Integration with SWIFTNet InterAct / FileAct for
  security sensitive data
• HTTP-S exchanges secured with web-certificates
  for non-sensitive / un-structured exchanges
• Closed User Group control
• SIPN

Standard technologies

• Client uses standard browser to navigate
• HTTP-S for screens and InterAct for transactions
  or FileAct for file transfers

Thin client

• Service provider does not install software at
  client side

Single Window

• Re-utilisation of existing SWIFTNet infrastructure

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Three complementary core SWIFTNet messaging
services
Messages
Secure, reliable, and STP-oriented. Appropriate
for exchange of individual structured financial
messages and short reports.
SWIFTNet InterAct
Files
SWIFTNet messaging
SWIFTNet FileAct
Secure, reliable, and flexible. Appropriate for
exchange of batches of structured financial
messages and large reports
Browsing
SWIFTNet Browse
Secure browsing with standard internet
technologies. Appropriate for data exchange in
thin-client browser-based financial solutions.
To be used with SWIFTNet InterAct and FileAct.
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SWIFTNet InterAct is used in real-time mode query
response
Real-time query response
Used either in the context of person-to-applicatio
n solutions (with SAB) or application-to-applicati
on (with SAG)

• SWIFTNet InterAct Q R interactive exchange of
  information for messages that are time-critical
  and need an instant response
• New message types will be introduced as ISO XML
  messages for SWIFTNet InterAct cash management
  standards
• Access to the web server through SWIFTNet
  Interact
• Managing the payments queue
• Liquidity management
• Management of reservation and limits

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Key characteristics of SWIFTNet InterAct
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Download our business brochurefrom swift.com
www.swift.com
24
Agenda
SWIFTNet expands the options
SWIFTNet solution for ACHs
SWIFTNet interfaces
Recommended configurations and related costs
Pricing
Benefits for ACHs and financial institutions
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Our file transfer interfaces provide ...

• Technical interoperability. SWIFTNet FileAct
  establishes compatibility between the interfaces
• Easy integration with file transfer middleware.
  Support of Sterling Commerces CONNECT, IBM
  MQSeries and other middleware products
• Manual and automated operations. WebStation-based
  GUI and Gateway-based automation

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Communication topology forperson-to-application
file transfer (only)
Service user
Service provider
W2K / UNIX
SWIFTAlliance Gateway
User workstation
W2K
FileAct
File transfer GUI
(1)
Businessapplication
SWIFTAlliance WebStation
SWIFTNet
browser
Customer
SWIFT
(1) SWIFTNet FileAct for the file transfer in
push and pull modes
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Communication topology for person-to-application
messaging, file transfer, browsing
Service user
Service provider
W2K / UNIX
SWIFTAlliance Gateway
User workstation
(1)
InterAct and FileAct
W2K
(2)
Businessapplication
SWIFTAlliance WebStation
SWIFTNet
Web server
browser
Browse (https)
(3)
(1) SWIFTNet InterAct for information updates and
transaction input (2) SWIFTNet FileAct for the
file transfer in push and pull modes (3) SWIFTNet
Browse for information browsing, status monitoring
Customer
SWIFT
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Agenda
SWIFTNet expands the options
SWIFTNet solution for ACHs
SWIFTNet interfaces
Recommended configurations and related costs
Pricing
Benefits for ACHs and financial institutions
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SWIFTAlliance Gateway Licensing pricing An
easy step approach
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Configurations

• Recommended configuration for participants
• SWIFTAlliance Starter Set
• Base fee 4.750 USD
• Recommended configuration for Service Provider
• SWIFTAlliance Gateway Single Window
• Base fee is 30,000 USD 1 SAB 2,250 USD

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SWIFTAlliance Starter Set (SAS)

• What is it ?
• A software that leverages the SAE/SAA platform to
  provide out-of-the-box file transfer and browsing
  capabilities
• Benefits
• A software that allows the customer for a
  controlled evolution to more services
• Evolutionary software solution
• Characteristics
• SAS, SAA/SAE SNL run on the same system
• Allows one concurrent operator (SAB)
• SAS is available on Windows and AIX/Solaris
• SAS include the SAB software

SAE/SAA
SNL
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Participant configuration with SAS

• SAA SAE users need one SAB user
• SWIFTAlliance Starter Set (SAS)
• One concurrent user
• Manual File Transfer
• Cost
• USD 4.750 one time USD 1.350 per year

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Contractual / Administrative efforts

• All Install SWIFTNet connectivity -gt done
• Participants order SWIFTNet SAB, SAS or SAG -gt
  4 weeks
• Service provider order SAG -gt 4 weeks
• All Complete MSSF() Form to activate Service
  at SWIFT ( ordering SWIFTNet FileAct ) -gt 3
  weeks
• Set-up Closed User Group -gt 3 months

MSSF Message Service Subscription Form
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Download our technical brochurefrom swift.com
www.swift.com
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Agenda
SWIFTNet expands the options
SWIFTNet solution for ACHs
SWIFTNet interfaces
Recommended configurations and related costs
Pricing
Benefits for ACHs and financial institutions
36
FileAct pricing example for a file sent by large
Albanian institutions on year 1

• A file of 6,000 low-value payment instructions of
  200 bytes each, compressed at a ratio of 80,
  results in a file of 400K which costs per global
  tier
• GT 1 11.91 euro / file 0.0012 euro /
  instruction (1)
• GT 1 10.78 euro/file 0.0011 euro/ instruction
  (2)
• Annual cost per year (300.000 transactions/year)
• 2,382 euro/year (1) or 2,156 euro/year (2)

Note This includes managed file transfer,
user-to-user PKI authentication, user-to-SWIFT
encryption, routing, integration, (1)
non-repudiation of emission (extra charge
included above) and delivery notification (extra
charge included above), (2) does not include
non-repudiation and delivery notification.
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FileAct pricing example for a file sent by large
Albanian institutions at ramp-up

• A file of 10,000 low-value payment instructions
  of 200 bytes each, compressed at a ratio of 80,
  results in a file of 700K which costs per global
  tier
• GT 1 18.32 euro / file 0.0018 euro /
  instruction (1)
• GT 1 16.61 euro/file 0.0017 euro/ instruction
  (2)
• Annual cost per year (6.000.000
  transactions/year)
• 3,664 euro/year (1) or 3,322 euro/year (2)

Note This includes managed file transfer,
user-to-user PKI authentication, user-to-SWIFT
encryption, routing, integration, (1)
non-repudiation of emission (extra charge
included above) and delivery notification (extra
charge included above), (2) does not include
non-repudiation and delivery notification.
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FileAct pricing example for a file sent by medium
Albanian institutions on year 1

• A file of 350 low-value payment instructions of
  200 bytes each, compressed at a ratio of 80,
  results in a file of 25K which costs per global
  tier
• GT 1 1.18 euro / file 0.0012 euro / instruction
  (1)
• GT 1 1.02 euro/file 0.0010 euro/ instruction
  (2)
• Annual cost per year (70.000 transactions/year)
• 236 euro/year (1) or 204 euro/year (2)

Note This includes managed file transfer,
user-to-user PKI authentication, user-to-SWIFT
encryption, routing, integration, (1)
non-repudiation of emission (extra charge
included above) and delivery notification (extra
charge included above), (2) does not include
non-repudiation and delivery notification.
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FileAct pricing example for a file sent by medium
Albanian institutions at ramp-up

• A file of 7,000 low-value payment instructions of
  200 bytes each, compressed at a ratio of 80,
  results in a file of 500K which costs per global
  tier
• GT 1 13.52 euro / file 0.0014 euro /
  instruction (1)
• GT 1 12.24 euro/file 0.0012 euro/ instruction
  (2)
• Annual cost per year (1.400.000
  transactions/year)
• 2,704 euro/year (1) or 2,448 euro/year (2)

Note This includes managed file transfer,
user-to-user PKI authentication, user-to-SWIFT
encryption, routing, integration, (1)
non-repudiation of emission (extra charge
included above) and delivery notification (extra
charge included above), (2) does not include
non-repudiation and delivery notification.
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FileAct pricing example for a file sent by small
Albanian institutions on year 1

• A file of 100 low-value payment instructions of
  200 bytes each, compressed at a ratio of 80,
  results in a file of 10K which costs per global
  tier
• GT 1 0.38 euro / file 0.004 euro / instruction
  (1)
• GT 1 0.29 euro/file 0.003 euro/ instruction (2)
• Annual cost per year (20.000 transactions/year)
• 760 euro/year (1) or 580 euro/year (2)

Note This includes managed file transfer,
user-to-user PKI authentication, user-to-SWIFT
encryption, routing, integration, (1)
non-repudiation of emission (extra charge
included above) and delivery notification (extra
charge included above), (2) does not include
non-repudiation and delivery notification.
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FileAct pricing example for a file sent by small
Albanian institutions at ramp-up

• A file of 6,000 low-value payment instructions of
  200 bytes each, compressed at a ratio of 80,
  results in a file of 400K which costs per global
  tier
• GT 1 11.91 euro / file 0.0012 euro /
  instruction (1)
• GT 1 10.78 euro/file 0.0011 euro/ instruction
  (2)
• Annual cost per year (300.000 transactions/year)
• 2,382 euro/year (1) or 2,156 euro/year (2)

Note This includes managed file transfer,
user-to-user PKI authentication, user-to-SWIFT
encryption, routing, integration, (1)
non-repudiation of emission (extra charge
included above) and delivery notification (extra
charge included above), (2) does not include
non-repudiation and delivery notification.
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I wish to assess the cost savings of using
SWIFTNet FileAct vs. existing file transfer

• Via your relationship manager
• Request the Bulk Payments/FileAct pricing
  simulator
• Calculate the real FileAct fees and compare to
  your existing TOC of existing proprietary links

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Agenda
SWIFTNet expands the options
SWIFTNet solution for ACHs
SWIFTNet interfaces
Recommended configurations and related costs
Pricing
Benefits for ACHs and financial institutions
44
Addressing your present and future needs
Extending your SWIFT benefitsfrom single
payments (RTGS, wholesale)to bulk payments (ACH,
retail)
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Immediate cost savingsthrough re-use of SWIFTNet
connectivity

• Re-use of SWIFTNet IP connectivity
• Re-use of SWIFTNet Link and SWIFTNet PKI
• Re-use of SWIFTAlliance WebStation
• including File transfer GUI (free of charge)
• Re-use of SWIFTAlliance Gateway
• adding file transfer interface (FTA, CD) or host
  adapter (RAHA)
• Re-use of SWIFTNet expertise
• No fixed fees per correspondent
• volume-based SWIFTNet FileAct fees

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Benefits for service providersLeverage the
industry platform SWIFTNet

• Focus on your core competencies and increase your
  key differentiators
• Extend your reach
• Migrate from proprietary messaging to
  standardised messaging without impacting your STP
  formats and practices
• Outsource deployment, management and evolution of
  network, messaging and security services

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Benefits for Automated Clearing Houses
software
lines
maintenance
hardware
support
testing
project management
back-up
legal
procurement
software maintenance
release qualification
disaster take-over exercises
education
documentation
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What our customers say (June 2004)

• The co-operation agreement with SWIFT fits
  perfectly with our strategy to lower entry and
  transaction costs and to expand the Eurogiro
  offering.

Henrik Parl, Managing Director, Eurogiro A/S
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What the first SWIFTNet-basedAutomated Clearing
House says

• "Combining the strengths of our partners SIA and
  SWIFT, we have been able to launch our new
  pan-European retail payment clearing house
  (STEP2) within a record timescale of 10 months.
  With STEP2 in place, banks in Europe now have a
  new platform that enables them to further develop
  their retail payments business in accordance with
  customer needs in the Single Euro Payments Area.
  Using SWIFTNet was an obvious choice to allow for
  open access by a very large number of banks.

Gilbert Lichter, Secretary General of EBA
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Thank you !
Questions and answers