ISO 20022 development

Payment and Trade Messaging Standards

Interoperability

Bangkok, 25 March 2015

Kiyono HASAKA
Payments and Cash Management
SWIFT Standards Asia Pacific
Agenda

ISO 20022 setting the scene

CGI Updates

Payments-Trade Standards Interoperability

Bank Payment Obligation

ISO 20022 Standards Updates

2
 SWIFT
Why ISO 20022? at the start
& the heart of
ISO 20022
Payments
Treasury & Trade Securities only Securities only
1973 1984 1999 2000 2004
Proprietary
MT ISO 7775 ISO 15022 ISO 20022

FIN MT: Computer-

processable versions
of telexes • Reference standard

• Paper-based • Electronic
• Proprietary syntax • Open, neutral syntax
• Point-to-point • End-to-end transaction
• One size fits all • Market practice
• SWIFT only • SWIFT + other organisations
 What is ISO 20022?
SWIFT is
single standardisation approach (methodology, process, repository)
Registration
to be used by all financial standards initiatives
Authority for
Recipe to create financial standards Body of content
ISO 20022
Business / Conceptual

• Defines business meaning of Business

financial concepts, e.g., ‘Credit models
Transfer’

Logical
Data
• Defines e.g. credit transfer dictionary
messages, to execute the business
process
Catalogue
Physical of
messages
• Defines physical syntax, e.g. XML
 www.iso20022.org

+ UHB
Maintenance process –
built on strict business
justifications and review
process - leading to new MyStandards
‘versions’ of the
messages
As main contributor
to the ISO
More than20022
320 ISO
20022 messages
portfolio, SWIFT has More than 320
More than 20
submitting
in-depth knowledge messages, covering
payments, securities,
organisations, of business model (flows, trade services, FX,
besides SWIFT scenarios) and cards
messages
‘PAIN’ = Payment Initiation = used in SCORE and SEPA
18
‘PACS’ = Interbank clearing and settlement = used in SEPA and HVP
business
‘SESE’ = Securities settlement = used in T2S
areas
‘SEMT’ = Securities management = used in T2S
 The standard is
being used!
Benefits of ISO 20022
Re-usable message
Open, neutral components, electronic
methodology to Ease of Syntax-
message formats (XML
independent model
develop standards integration Schema’s), character set
Key concepts
Everyone can Future-proof
participate

Greater Allows for

automation interoperability

Rich, structured
Scenario-based Data dictionary
data
standards End-to-end business- approach allowing
facilitating centric approach referencing by
market practice other standards
6
XML message instance
This is an XML instance
or message - XML is
very easy to read!

XML is …
… a meta-language
that describes the way data
is formatted and
communicated

… a syntax

Sometimes we refer to an
XML message as an ‘MX’

The schema is the definition

of the message
7
ISO 20022 XML message identifier

4!a . 3!c . 3!n . 2!n

Version

Variant

Message identifier/functionality

Business area

Example pain . 001 . 001 . 04

Version 4

Variant 1

Customer Credit Transfer Initiation

Payments Initiation 8
ISO 20022 Business Message

9
Example

SWIFT InterAct payload

– Application Header

– Message content

10
 Example - MT 103 to pacs.008
:20:HS1R130702000005 <?xml version="1.0" encoding="UTF-8"?>
:23B:CRED <Document xmlns="urn:iso:std:iso:20022:tech:xsd:pacs.008.001.04">
:23E:SDVA <FIToFICstmrCdtTrf>
:32A:130702PHP450,00 <GrpHdr><MsgId>HS1R130702000005239876</MsgId>
:50K:/PH HSBC 111-222222-666 <CreDtTm>2013-07-02T09:30:47Z</CreDtTm>
BILBO BAGGINS <NbOfTxs>1</NbOfTxs>
MAKATI CITY 1200 <SttlmInf><SttlmMtd>CLRG</SttlmMtd></SttlmInf></GrpHdr>
METRO MANILA <CdtTrfTxInf><PmtId>
:57A:BNORPHMM <InstrId>HS1R130702000005</InstrId>
:59:/4567891 <EndToEndId>NOTPROVIDED</EndToEndId>
MR WISHBONE BAGGINS <TxId>HSBCR20130702112345611</TxId></PmtId>

1 :70:MONTHLY ALLOWANCE
:71A:OUR
:72:/TRCD/SALA
<PmtTpInf><ClrChanl>RTGS</ClrChanl>
<SvcLvl><Prtry>087</Prtry></SvcLvl>
<LclInstrm><Prtry>RTGS_CSCT</Prtry></LclInstrm>
:77B:/ORDERRES/PH//ALLOWANCE FOR BAGGINS FAMILY <CtgyPurp><Prtry>SALA</Prtry></CtgyPurp></PmtTpInf>
<IntrBkSttlmAmt Ccy=“PHP">450.00</IntrBkSttlmAmt>
<IntrBkSttlmDt>2013-07-02</IntrBkSttlmDt>
<ChrgBr>SLEV</ChrgBr>
<InstgAgt><FinInstnId><BICFI>HSBCPHMM</BICFI></FinInstnId></InstgAgt>
<InstdAgt><FinInstnId><BICFI>BNORPHMM</BICFI></FinInstnId></InstdAgt>
<Dbtr><Nm>BILBO BAGGINS</Nm>
<PstlAdr><AdrLine>MAKATI CITY 1200</AdrLine>
<AdrLine>METRO MANILA</AdrLine></PstlAdr></Dbtr>
Remittance Information <DbtrAcct><Id><Othr><Id>111-222222-666</Id></Othr></Id></DbtrAcct>
<DbtrAgt><FinInstnId><BICFI>HSBCPHMM</BICFI></FinInstnId></DbtrAgt>
 Flexibility - a multiple of <CdtrAgt><FinInstnId><BICFI>BNORPHMM</BICFI></FinInstnId></CdtrAgt>
<Cdtr> <Nm>MR WISHBONE BAGGINS</Nm></Cdtr>
140x (vs. max 140x in MT) <CdtrAcct><Id><Othr><Id>4567891</Id></Othr></Id></CdtrAcct>
<RgltryRptg><DbtCdtRptgInd>CRED</DbtCdtRptgInd><Authrty>

 Improved STP <Nm>CB</Nm><Ctry>PH</Ctry></Authrty><Dtls><Tp>a</Tp>

<Dt>2013-07-02</Dt><Ctry>PH</Ctry><Cd>a</Cd><Amt Ccy=“PHP">450.00</Amt>

 Ease A/R reconciliation <Inf>ALLOWANCE FOR BAGGINS FAMILY</Inf>

<RgltryRptg><DbtCdtRptgInd>DEBT</DbtCdtRptgInd><Authrty>
<Nm>CB</Nm><Ctry>PH</Ctry></Authrty><Dtls><Tp>a</Tp>
<Dt>2013-07-02</Dt><Ctry>AA</Ctry><Cd>a</Cd><AmtCcy=“PHP">450.00</Amt>
<Inf>ALLOWANCE FOR BAGGINS FAMILY</Inf><Inf>a</Inf></Dtls></RgltryRptg>
<RmtInf>
<Ustrd>MONTHLY ALLOWANCE</Ustrd>
</RmtInf>
</CdtTrfTxInf>
</FIToFICstmrCdtTrf>
</Document>

11
Agenda

ISO 20022 setting the scene

CGI Updates

Payments-Trade Standards Interoperability

Bank Payment Obligation

ISO 20022 Standards Updates

12
ISO 20022 adoption in the corporate-to-bank space

SE
NL

BE FI
DK RU
DE
CA IE
SEPA AT SK
UK
FR JP
CH CN
US LU KR
IT
ES HK
PT

MX TH

SG
More than AU
100 members
ZA
(corporates and banks)
SWIFT
defining
for
common global
Corporates –
implementation
Cash
guidelines
management 13
Payment flows addressed by CGI-MP
Customer Credit Transfer
pain.001
Customer Payment Status Report
pain.002
Debtor Debtor Agent
Account Reporting (Payer’s Bank)
(Payer) camt.052 / camt.053 / camt.054

Interbank
Clearing &
Settlement

Customer Direct Debit

pain.008
Customer Payment Status Report
pain.002
Mandate Initiation / Amendment / Cancellation
pain.009 / pain.010 / pain.011
Creditor Mandate Acceptance Report Creditor Agent
(Payee) pain.012 (Payee’s Bank)
Account Reporting
camt.052 / camt.053 / camt.054

14 Common Global Implementation – Market

Practice (CGI-MP) initiative
Financial Institution Members
In total 45 FI members (Contributing & Observers) as at Feb 2015

– Bank of America Merrill Lynch

– Bank of China (HK)
– Barclays
– BBVA
– BNP Paribas
– BSK, Bankenes Standardiseringskontor
– Citibank
– Commerzbank AG
– Danish Bankers Association
– Danske Bank
– Deutsche Bank
– DnB NOR
– Erste Group Bank
– HSBC
– ING Bank
– JACCOO
– J.P.Morgan
– Nordea Bank
– Payments Council (UK)
– Raiffeisen Bank International
– Royal Bank of Scotland
– Santander
– SEB
– Standard Chartered Bank
– Swiss Re
– Sydbank A/S
– UniCredit Bank
– Wells Fargo

15
Common Global Implementation – Market Practice (CGI-MP) initiative
Non-Financial Institution Members 1/2
In total 88 Non-FI members (Contributing & Observers) as at Feb 2015

– AITI
– Alsyon
– BBP
– Bottomline Technologies
– CBI Consortium
– e5 Solutions
– EFiS
– Exalog
– Fiserv
– Flux
– General Electric
– IKEA
– KPMG
– Nasarius
– Netilys Consulting
– Nets
– NIKE
– Online Banking Solutions
– OpenText GXS
– OpusCapita
– Professional Answer
– PwC
– SAP AG
– Siemens
– SIX Interbank Clearing
– Sungard
– SWIFT
– Tembit
– Tipco
– TIS
– UTSIT
– Verband Deutscher Treasurer
– Visma Software International AS
– Wall Street Systems
– XMLdation
– Zanders

16 Common Global Implementation – Market Practice (CGI-MP) initiative

Non-Financial Institution Members 2/2
In total 88 Non-FI members (Contributing & Observers) - continued

– ACI Worldwide
– AFTE
– AFP
– Axletree
– bfinance
– Deutsche Post
– Dovetail
– Hanse Orga
– Horváth & Partners
– Info
– Merck
– Nordson
– Storck
– SunTec
– Volante
– Vorwerk

17 Common Global Implementation – Market Practice (CGI-MP) initiative

 Work Group deliverables

 Account Report (camt.052)

 Credit Transfer (pain.001) template to include intra-day
template to include ACH and bank account activity
wires (domestic and  Statement (camt.053)
international) and template to include end of
cheques/drafts period bank account activity
WG1 WG2
 Appendix A – Clearing system  Debit/Credit Notification
classifications Credit Transfer Cash
& Payment (camt.054) template to include
 Appendix B – Country specific Management
Status Report detail notification reporting
Reporting
data requirements  Appendix A – Uses cases and
 Appendix C - Country specific examples
Purpose codes
 Payment Status Report WG5
(pain.002) template with WG3  Direct Debit (pain.008)
Bank
process flow Services Direct Debit & template to include any
Billing Mandates electronic debit transaction
 Appendix B – Country specific
WG4 data requirements
Bank Account  Appendix C – Country specific
 Bank Services Billing Statement Management Purpose codes
(camt.086)*  Mandate Initiation RequestCom
(pain.009) mon
 Mandate Amendment
Request (pain.010)
Globa
 Mandate Cancellation l
 Bank Account Management (acmt) messages covering Request (pain.011) Imple
account opening, account maintenance, account  Mandate Acceptance Report
closing, mandate management menta
* Under Review (pain.012)
tion –
18 Marke
t
Agenda

ISO 20022 setting the scene

CGI Updates

Payments-Trade Standards Interoperability

Bank Payment Obligation

ISO 20022 Standards Updates

19
ISO 20022 for payment and trade standards
interoperability
tsmt.001
~052
BPO

Risk

Risk

MT 101 MT 101 MT 101 MT 101

pain.001 pain.001 pain.001 pain.001
MT 4XX MT 7XX 20
ISO 20022 for payment and trade standards
interoperability & risk spectrum

Increased risk for

Seller Increased risk for
the buyer
the seller

Open Collections BPOBPO L/C Advance

Account Guarantees Payment

ISO

ISO20022 Collections ISO20022 L/C ISO20022 Corporate

FileAct FileAct FileAct MT798 MT101 to bank

ISO20022 Collections TSU L/C ISO 20022 Bank to

MT202 MT4xx ISO20022 MT7xx MT202 bank

ISO
21
 Trade Services Utility BPO: a commercial
agreement between
buyer and seller

Paper documents

BPO: a new
payment term in
the Sale contract
Buyer Seller

Any channel / Any channel /

any format / any format /
any solution any solution
UR BPO

Dematerialised
ISO 20022 ISO 20022
flows
TSU
Buyer’s Seller’s
bank bank

Database Central data

Rulebook matching

A legally binding rulebook An industry-wide messaging and

owned by the ICC and based matching platform that implements the
BPO in a multi-bank environment 22
on ISO 20022 standards
Agenda

ISO 20022 setting the scene

Payments-Trade Standards Interoperability

Bank Payment Obligation

Financial Invoice

ISO 20022 Standards Management Tools

23
Roles of ICC and SWIFT

To help banks provide The ICC Banking Commission

innovative trade and supply is a leading global rule-making
chain services that enable their body for the banking industry,
corporate customers to: producing universally accepted
– reduce risk rules and guidelines for
– enhance process efficiency international banking practice,
notably letters of credit,
– improve liquidity demand guarantees and bank-
management. to-bank reimbursement.
More than 9,000 financial Over 500 members in 85
institutions in 209 countries. countries.

24
Cooperation signed at Sibos in September 2011

Both the ICC and SWIFT believe that by

working together and leveraging their
respective positions across the trade finance
community, the BPO will have an important
role to play in supporting the development of
international trade in the 21st century in
Kah-Chye Gottfried
addressing cost pressures in the face of
Tan Leibbrandt
increased automation and changes in the
Chair ICC Banking CEO
Commission SWIFT regulatory environment.

25
ICC / SWIFT Cooperation Agreement

Mission Activities Timeline

Establish
BPO as a
technology Drafting URBPO
neutral and Education approval
industry Commercialisation 17 April 2013
owned
instrument

26
Growth predicted in global trade
This will mostly be done without LCs
USD 33
USD 12 trillion
USD 6
USD 2 trillion
trillion
trillion

100
90
80
70
60
50 OA
40 LC
30
20
10
0

27
Growth predicted in global trade

“Merchandise trade volumes in 2025

hitting $48.5 trillion compared to
today’s $27.2 trillion”
HSBC trade connections, Oct 2011

Effective management
of credit and working capital
is of growing importance
28
What is the challenge today?

Contract Contract
Documents
Buyer Seller Buyer Seller

Documents
Application
Documents

Letter of Open
Advice
Credit Account
Continuous
Documents shift
Issuance
LC Issuing LC Advising Buyer’s Seller’s
Bank Bank Bank Bank
Payment Payment

Bank risk / financing services Bank services limited to

based on paper document payment processing.
processing
If any risk, Credit Insurance or
Payment Guarantee is added

29
The opportunity for banks

Contract Contract
Documents Documents
Buyer Seller Buyer Seller

Bank Open
Data

Data
Payment Account
Obligation
Bank-assisted
open account
Data

Obligor Recipient Buyer’s Seller’s

Bank Bank Bank Bank
Payment Payment

Bank risk / financing services Bank services limited to

based on electronic trade data payment processing

The BPO enables bank-assisted Open Account trade

30
 The Bank Payment Obligation (BPO)
A new alternative instrument for trade settlement

A BPO is an irrevocable
undertaking given by one
bank to another bank that
payment will be made on a
specified date after a
successful electronic
matching of data according to
an industry-wide set of rules.
Designed to complement and not
to replace existing solutions
New ICC Uniform Rules for BPO
(URBPO) 31

Implementation date: July 2013

 BPO flows for data, documents and goods
Carriers
Delivery
of goods 4 Shipment Documents
sent directly to
the client
Use minimum
fields
1 Purchase order

8 Invoice and shipping documents

Buyer Seller
Request BPO 3
Inform of BPO
based on PO
2 establishment

Transaction
Trade
BPO is
Establishe
Matching
Services
d due
baseline
Application
Utility
Transport and 6 BPO BPO Transport and
invoice data 5
Obligor Recipient invoice data
(match report)
Bank Bank
Inform that payment is
9 Transfer funds at maturity 7 due on agreed date
 ISO 20022 tsmt messages

Message type Business message tsmt.025.001.03 Status Change Notification

tsmt.026.001.02 Status Change Request
C2B tsmt.001.001.03 Acknowledgement
tsmt.027.001.02 Status Change Request Acceptance
tsmt.002.001.03 Activity Report
tsmt.028.001.03 Status Change Request Notification
tsmt.003.001.03 Activity Report Request
tsmt.029.001.02 Status Change Request Rejection
tsmt.004.001.02 Activity Report Set Up Request
tsmt.030.001.03 Status Change Request Rejection Notification
C2B tsmt.005.001.02 Amendment Acceptance
tsmt.031.001.03 Status Extension Acceptance
C2B tsmt.006.001.03 Amendment Acceptance Notification
tsmt.032.001.03 Status Extension Notification
C2B tsmt.007.001.02 Amendment Rejection
tsmt.033.001.03 Status Extension Rejection
C2B tsmt.008.001.03 Amendment Rejection Notification
tsmt.034.001.03 Status Extension Rejection Notification
C2B tsmt.009.001.03 Baseline Amendment Request
tsmt.035.001.03 Status Extension Request
C2B tsmt.010.001.03 Baseline Match Report
tsmt.036.001.03 Status Extension Request Notification
C2B tsmt.011.001.03 Baseline Report
tsmt.037.001.03 Status Report
C2B tsmt.012.001.03 Baseline ReSubmission
tsmt.038.001.03 Status Report Request
C2B tsmt.013.001.03 Data Set Match Report
C2B tsmt.040.001.03 Time Out Notification
C2B tsmt.014.001.03 Data Set Submission
C2B
tsmt.041.001.03 Transaction Report
tsmt.015.001.03 Delta Report
C2B
tsmt.042.001.03 Transaction Report Request
tsmt.016.001.03 Error Report
C2B tsmt.044.001.01 IntentToPayNotification
C2B tsmt.017.001.03 Forward Data Set Submission Report
C2B tsmt.045.001.01 ForwardIntentToPayNotification
C2B tsmt.018.001.03 Full Push Through Report
C2B tsmt.046.001.01 IntentToPayReport
C2B tsmt.019.001.03 Initial Baseline Submission
tsmt.047.001.01 SpecialRequest
C2B tsmt.020.001.02 MisMatch Acceptance
tsmt.048.001.01 SpecialNotification
C2B tsmt.021.001.03 MisMatch Acceptance Notification
tsmt.049.001.01 RoleAndBaselineAcceptance
C2B tsmt.022.001.02 MisMatch Rejection
tsmt.050.001.01 RoleAndBaselineRejection
C2B tsmt.023.001.03 MisMatch Rejection Notification
tsmt.051.001.01 RoleAndBaselineAcceptanceNotification
C2B tsmt.024.001.03 Action Reminder
tsmt.052.001.01 RoleAndBaselineRejectionNotification

http://www.iso20022.org/trade_services_messages.page 33
Value proposition – Benefits of using BPO

For buyer For seller

Payment Payment
• Choosing settlement method according to the risk • Shortening settlement terms
• Easier payment without handling documents • Payment assurance
• Reducing risk with open account payment

Financing Financing
• Working capital optimisation • Working capital integration and analysis
• Enhancing access to financing for the supplier • More access, opportunity and flexibility for trade
finance
• No need to access buyers’ banks

Processing Processing
• Reducing operational risk • Automated PO authentication
• Early identification of discrepancies saves time and • Automated A/R reconciliation better supports
avoids disputes accounting
• Reducing time and cost for manual documents • Automated risk management tool
examination and paperwork • Immediate visibility

34
 The BPO enables SCF to start when it should

Ordering Production Delivery Invoicing Goods Payment &

Acceptance cash mgmt

Purchase Transport Invoice Invoice

Certificates Payment
Order (PO) Documents Issuance Approval
Payment risk mitigation Post-shipment Receivables Payment
Pre-shipment finance finance Finance Processing

No/Low-risk zone
High-risk zone (Early) Payment services
Payment assurance & financing services

Transforming open account payments

into SCF opportunities

The UR BPO and ISO 20022 industry standards will allow banks to extend their
SCF offerings to risk mitigation and post-shipment financing services 35
Live use of BPO is accelerating

URBPO

36
17 banking groups live on BPO
Including 6 of the top15 Trade banks (based on Cat 7 traffic)

37
 49 corporate relationships live on BPO

“We were able to share shipping documents with BNPP electronically and in a
matter of hours we received confirmation that they were fine.”
“In terms of ease of working, it’s very positive, and we plan to conduct BPOs with
full cargoes in the future.”
Michael Van Steenwinkel
Source: Global Trade Review
Global Credit Manager
BP Petrochemicals38
58 banks adopting BPO (update as at 4th September 2014)
Including 18 of the top20 Trade banks (based on Cat 7 traffic)

39
 BPO value proposition per segment, per
industry

Chemical • Petrochemical

• Consumer goods
Retail
• Textile

Basic
materials • Mining: Iron ore

Technology
• Electronics and
computers

Agriculture • Food processing

BPO meets the 4 pillars of trade finance
Payment certainty, Financing, Information flow & Risk mitigation

• Support critical
providers
• Secure better • Easier Access to supply
commercial terms chain financing
• Faster ownership of • Pre or Post shipment
goods financing
Importer Exporter
• Flexible orders and • Timely payment (BPO due
date)
reduction of stocks • Reduce DSO (up 50% vs.
level LCs)
• Faster identification of
discrepancies
TSU

• Prevent KYCC • Re-intermediate local

BPO BPO
• Reduce operational banks
Obligor Recipient
Bank cost • Broaden SCF Bank
• Improve quality of • Reduce operational costs
compliance verification • Global reach (140+ banks
• Rely on genuine trade on TSU) 41
Bank Payment Obligation
-- Trade Finance Goes Digital --
Case Study - First BPO Service in Southeast Asia

42
Siam Commercial Bank in Brief

Company profile

 Siam Commercial Bank (SCB) is the leading universal

banking group in Thailand, with the highest market
capitalization and the largest branch and ATM network.

 SCB is Thailand's third-largest commercial bank in terms

of total assets, deposits and loans.

 SCB provides a full range of financial services, including

corporate and personal lending, retail and wholesale
banking, foreign currency operations, international
trade financing, cash management, custodial services,
credit and charge card services and investment banking
services, through its head office and its extensive
branch network.

43 43
PTT Polymer Marketing in Brief

Company profile
 PTT Polymer Marketing (PTTPM) is one of the biggest polymer
sales and marketing companies in Thailand.
 It is member of the PTT Group, a group of companies led by PTT
Corp., Thailand’s huge national oil and gas company.
 PTTPM has annual revenues of 2 billion USD, selling high quality
polymers such as high density polyethylene (HDPE), low density
polyethylene (LDPE), linear low density polyethylene (LLDPE),
polypropylene (PP) and polystyrene (PS).
 PTTPM products are distributed throughout Thailand and
exported to more than 100 countries around the world.

Vision
 To become an international polymer trading house with 100
billion baht in annual revenues by 2015.

Mission
 To provide the most professional sales and marketing services to
PTT Group’s polymer manufacturing units.

44 44
Business challenges of PTTPM

Open Account with

Letter of Credit (L/C)
Standby L/C

 Long document checking process  High opportunity cost:

(7 working days on average) Standby L/C must be pledged all year

 Documents have to be submitted  High cost for issuing standby L/C

through bank channel
 Risk of payment delay
 Risk of discrepancy dispute

Low efficiency High transaction costs

45 45
 BPO definition

A new & efficient method of payment

with 2 key characteristics

Bank assures payment

Data matching triggers payment*

*Trade Services Utility (TSU), powered by

46 46
 BPO Services of SCB

SCB offers the full range of BPO services to match specific client needs

Category Import Export

Transaction BPO issuance BPO advice

services
BPO confirmation

Export data matching

via BPO
Financing Import financing Pre-shipment financing
services under BPO under BPO
Post-shipment financing
under BPO

47 47
BPO process flow (pre-shipment)

1. Sends P/O & inquiry

2. Sends Proforma /Invoice

Importer

5. Issues
3. Requests BPO advice 6. Accepts
BPO issuance & requests BPO data
data
acceptance

4. Sends BPO (via TSU)

Importer’s bank

48 48
 BPO process flow (post-shipment)

6. Credits
1. Ships product to importer
to a/c
4. Sends documents by courier

Importer
2. Submits
export
3. Sends dataset to
notification of bank
matching
3. Notifies
result to
exporter of
importer
matching result

3. Notifies importer’s bank of

matching result (via TSU)

5. Sends payment
to exporter’s bank
Importer’s bank

49 49
Benefits to trade counterparties

Importer

 Receives documents & goods faster  Receives payment on time

(exporter sends shipping documents directly)  Eliminates risk of discrepancy dispute

 Reduces transaction cost  Reduces transaction cost

 Shortens credit utilization period  Reduces time spent banking

(from 7 to 1 working day(s) on doc checking)

50 50
Benefits to trade counterparties
Sight L/C
Send out Receive Payment Payment
Present doc doc doc (clean) (discrepancy)

Doc checking Courier Doc checking Discrepancy dispute

(by SCB) (by issuing bank)
Same day 2 day 5 working days Dispute period

7 working days Extended period

BPO (2 days after match date)

Send out
Submit data doc Payment

Data matching Courier

(by TSU)
Same day 2 day

3 working days Collection days eliminated

51 51
 BPO project timeline
Study project feasibility

 Identify PTTPM’s needs Go live

 Propose BPO services
 Set up project plan / working team  Negotiate terms between
 Check BPO readiness of counterparty bank PTTPM and buyer
 Identify potential buyers  Set transaction date
 Check buyer adoption  BPO goes live

Aug 12 Sep 12 Oct 12 Nov 12

Set up facility

 Confirm workflow
 Modify PTTPM’s internal system to handle new payment
 Finalize agreement
 Train operation team
 Test TSU transaction with counterparty bank
 Communication

52 52
Next steps

 Increase number of BPO counterparty banks

 Follow up status of URBPO endorsement

 Commercialize BPO to wider group of customers

 Develop system to fully automate BPO transactions

 Create new and additional BPO-related solutions

53 53
Agenda

ISO 20022 setting the scene

CGI Updates

Payments-Trade Standards Interoperability

Bank Payment Obligation

ISO 20022 Standards Updates

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ISO 20022 Standards Updates
Payments
• 23 new message versions were registered and published on 12 Mar 2015
o 6 new versions for Payments Clearing & Settlement
o 4 new versions for Payments Initiation
o 3 new versions for Notification to Receive
o 2 new versions for Creditor Payment Activation Request
o 5 new versions for Exceptions & Investigations
o 3 new versions for Bank-to-Customer Cash Management
o 4 new versions for Payments Mandates (approved in Oct 2014)
• Top 2 reasons:
o Update Structured Remittance Information with ‘Tax’ (23 messages)
o Update Remittance Location (M) (14 messages)

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 Update Structured Remittance Information

Example of pacs.009

Example of pacs.008

Ensure alignment with a new stand-

alone RemittanceAdvice
remt.001.001.01 that includes an
enhanced version of the
StructuredRemittanceInformation
message component.

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 Update Remittance Location
“RelatedRemittanceInformation” contains "RemittanceLocation"

Ensure alignment with a new stand-alone

RemittanceLocationAdvice remt.002.001.01
that includes an enhanced version of the
RemittanceLocation message component.

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ISO 20022 Standards Updates
Payments
o 6 new versions for Payments Clearing & Settlement
pacs.002.001.06
pacs.003.001.05
pacs.004.001.05
pacs.007.001.05
pacs.008.001.05
pacs.009.001.05

o 4 new versions for Payments Initiation

pain.001.001.06
pain.002.001.06
pain.007.001.05
pain.008.001.05

o 3 new versions for Notification to Receive

camt.057.001.04
camt.058.001.04
camt.059.001.04

o 2 new versions for Creditor Payment Activation Request

pain.013.001.04
pain.014.001.04
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ISO 20022 Standards Updates
Payments
o 5 new versions for Exceptions & Investigations
camt.028.001.05
camt.029.001.05
camt.055.001.04
camt.056.001.04
camt.087.001.02

o 3 new versions for Bank-to-Customer Cash Management

camt.052.001.05
camt.053.001.05
camt.054.001.05

o 4 new versions for Payments Mandates (approved in Oct 2014)

pain.009.001.04
pain.010.001.04
pain.011.001.04
pain.012.001.04

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ISO 20022 Standards Updates
Trade Services
• 7 new message versions for Trade Services Management
• The purpose of the version update is to align with the current and
evolving regulatory demands

o tsmt.009.001.04 BaselineAmendmentRequestV04
o tsmt.012.001.04 BaselineReSubmissionV04
o tsmt.019.001.04 InitialBaselineSubmissionV04
o tsmt.018.001.04 FullPushThroughReportV04
o tsmt.014.001.04 DataSetSubmissionV04
o tsmt.017.001.04 ForwardDataSetSubmissionReportV04
o tsmt.011.001.03 BaselineReportV03

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ISO 20022 Standards Updates
Factoring Services
• 11 new messages for factoring services (trade receivables)
• The scope of the messages is the assignment, financing and guarantee of
invoices and the collection of invoice payments.
Party Registration and Guarantee Management Messages
Messages name Identifier
Party Registration And Guarantee Request tsin.009.001.01
Party Registration And Guarantee Status tsin.010.001.01
Party Registration And Guarantee Notification tsin.011.001.01
Party Registration And Guarantee Acknowledgement tsin.012.001.01
Assignment Messages
Messages name Identifier
Invoice Assignment Request tsin.006.001.01
Invoice Assignment Status tsin.007.001.01
Invoice Assignment Notification tsin.008.001.01
Invoice Assignment Acknowledgement tsin.013.001.01
Reconciliation Messages
Messages name Identifier
Invoice Payment Reconciliation Advice tsmt.053.001.01
Invoice Payment Reconciliation Status tsmt.054.001.01
Event Notification Message
Messages name Identifier
Party Event Advice tsmt.055.001.01
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Questions?

Contract
Kiyono Hasaka / SWIFT APAC
kiyono.hasaka@swift.com

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