Global Payments: disruptions, trends and innovations Michael Moon - PowerPoint PPT Presentation

Global Payments: disruptions, trends and innovations Michael Moon Head of Payments Markets Asia Pacific SWIFT Auckland, New Zealand 2016

Community 200+ Countries and territories 11,000+ SWIFT users FIN messages peak day (2015) 27.5 million PNZ 2016 2

New Zealand Scene setting: Game changing trends Nature of Disruption & innovation PNZ 2016 3

“The pace of change in terms of what customers are doing, how they pay us… it’s breathtaking … any company that interacts with consumers and thinks that last week’s technology and approach is going to work five years from now is probably making a mistake” Warren Buffett PNZ 2016 4

in financial services and payments challengers are everywhere Disruption across industries Sources of competition Vertical to horizontal PNZ 2016 5

Disruption from unexpected sources PNZ 2016 6

Innovation is challenging bedrock foundations of the financial industry PNZ 2016 7

Payments is becoming one of the disrupted sectors PNZ 2016 8

Game changing trends PNZ 2016 9

Regulation New Entrants Emerging Technologies Big Data Cyber risks PNZ 2016 10 10

Digitisation is changing how business is done • Trade and finance flows are flat • Data flows are soaring • 45X growth in data flows (2005 to 2015) Source: McKinsey Global Institute, March 2016, Digital Globalization: The New Era of Global Flows PNZ 2016 11

̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ Real time payments is not just about being “fast” anymore Simpler Intelligent Open Access API to Anything Addressing Messaging Inclusive - Reduced friction Addressing and Transfer of extended for customer Overlay information, not participant Services simply value Alias/Proxies ecosystem integration instead of Information rich Regional/global account Consumed by ISO 20022 interoperability numbers Corporates, SMEs, Govt. Extensive use of organizations Digital Channels, esp. Mobile PNZ 2016 12

New Payments Platform Australia embracing these trends PNZ 2016 13

In global payments the value chain is being challenged throughout … End customer End customer Transfer Agent Transfer Agent (retail, SME, (retail, SME, corp) corp) disintermediation PSP PSP Local bank Local bank ACH ACH GTB GTB Correspondent Banking PNZ 2016 14

global payments innovation (gpi) initiative – reinventing global payments Drivers for change.. ..Future of cross-border 85+ Faster, same day use of funds Rising Customer expectations banks Transparency of fees Correspondent network 200+ Rationalisation countries End-to-end payments tracking 75%+ x- Disruptive forces border Information transferred unaltered payments 15 PNZ 2016

SWIFT gpi tracker “in the cloud” 101 > 103 > 103 > 910 > 103 > Originator Bank A Bank C Beneficiary Bank B Bank D MT199/API MT199/API MT199/API MT199/API Transparency of total fees and time “One-glance” status overview Unique, end-end tracking number Track path, in real time Central payments database, hosted at SWIFT Updated via MT199 or API Details of banks along the chain Data consumption via GUI, via MT199 (push) or via API (pull) 16 PNZ 2016

Fintech & the blockchain PNZ 2016 17

SWIFT on distributed ledger technologies – non negotiable features of scalable DLT 18 PNZ 2016

DLT R&D@SWIFT NZ 19

Cyber threat evolution Destructive Attacks The Unknown?? Disruptive Attacks Sophisticated Future cyber threats Malware would be even more Attacks Advanced sophisticated and Intrusive DDoS organized than Hacker current threats Attacks Collaboration Multi-Stage Phishing APTs Simple Pharming Worms/ DDoS Viruses 2001 2007 Today 2020 Nuisance Fraud Destructive Disruptive PNZ 2016 20

SWIFT Customer Security Program (CSP) You Secure and Protect Security Assurance SWIFT Controls Tools Your Your Community Counterparts Share Prevent   and and  Prepare Detect CSI Intelligence Third RMA DVR Forensics Sharing Parties PNZ 2016 21

SWIFT Customer Security Programme STREAMS ENABLERS Improve information sharing amongst the E1 E2 E3 1 global community Programme communications Build customer and 3 rd party assurance frameworks 2 Enhance SWIFT-related tools for customers Customer and third 5 streams party engagement Enhance security guidelines 3 enablers 3 Support increased transaction pattern 4 detection 5 Enhance support by third party providers PNZ 2016 22 22

What about New Zealand ? PNZ 2016 23

Connecting Global Fintech: Hub review 2016 PNZ 2016 24

SWIFT & NZ payments high value low value X-border PNZ 2016 25

curiosity safety open innovate partner PNZ 2016 26

Video: the near future of payments PNZ 2016 27

www.swift.com PNZ 2016 29