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

Standards

Connecting

The Dots..

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

What do we

mean by

resiliency?

FinTech Innovation Asia Conference - Hong Kong - 5 June 2015

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

Payment

System

Innovation

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

Thank you