PNC Offices, Washington

PNC Offices, Washington
IBOS BD MEETING November 6th – 7th 2014 PNC Offices, Washington

Agenda/Day 1 Minutes/actions of last meeting Briefing on IBOS AGM
IBOS positioning and what we have to do Presentations from PNC, Ulster Bank and RBC Marketing support New website Business volumes, expectations, targets and accountability Speed-dating Referral Workshop

Agenda/Day 2 Speed-dating Referral Workshop (continued) New services
Account Opening stream/next phase Meetings Status check on BD Group actions Any other business So let’s start off with the Minutes/Actions from the last meeting

IBOS Value Proposition
Briefing on IBOS AGM Refer to Highlights document: Short-term efforts BD effort New banks Acceptance of Plan and Budget Adoption of Code of Practice

New banks - volumes All the potential new banks want to know volumes: Numbers Type of customer Our offering back: Active effort to promote the offering that the IBOS partner bank is part of That the IBOS banks will then refer the opportunity to the IBOS partner bank and not to someone else The volumes for new banks fall out of the same process and actions as the volumes between existing banks

New banks - volumes Request sent to IBOS’ North American banks regarding Asia-Pacific: Numbers and types of customer referred to Standard Chartered Which countries, whether completed successfully or not Whether the volume derived from an active sales effort or a reactive one And then Australia and New Zealand: Were these countries part of the Standard Chartered Gateway or was someone else used? How many referrals to each country, whether completed successfully or not

AGM view of ICM market Global Banks Local Banks De-globalising
Reducing number of countries covered Reducing depth of in-country services to “wholesale banking” and fully-automated electronic payments Segmenting the “Global” from the “Home” Bank Only “Global” clients get global services “Home Bank” is a domestic bank Services like MT101, SCORE depend on client being serviced in the “Global” side Kicking out non-resident accounts and not accepting new ones Kicking out resident accounts with foreign Ultimate Beneficial Ownership and not accepting new ones No unit has a mandate to accept “foreign” customers Or target for minimum revenue to compensate for KYC effort on “foreign” customers

AGM view of ICM market Multinationals** Large/Medium Corporates
1,000 names at most with global sales of over $5 billion The only customers to whom Global Banks now offer their international networks Prime users of Payment Factory/Shared Service Centre .. And non-bank tools for electronic banking Participants in CGI with the Global Banks PMPG = Global Banks All other corporates, of all sizes Not attractive to Global Banks because revenues per location are modest Need international services and look to their main banker to supply them Expect main banker to supply the electronic channel IBOS target market ** excludes insurance companies and other types of non-bank financials and money service companies who join SWIFT under Corporate Access because they are not classed as banks

Scope comparison CGI Camt relay Working Group Channel: Services:
SWIFT (direct/Bureau) FSN, Host-to-Host Services: Bulk files of credit transfers & direct debits Extended remittance information Tax and salary payments Summary: Perfecting the operation of Payment Factory/SSC Not involving the types of local transactions that the Global Banks cannot handle efficiently or at all Channel: eBanking of the main bank Supplemented by host-to-host or file upload with main bank Services: Local & cross-border payments Reporting on these and on: Paper-based payments Quasi-payments (LCR, RIBA..) Treasury transactions (FX, Loan..) Ancillary transactions (charges, interest) Summary: Related to full-service banking from full-service banks

AGM view of ICM market Regional network offerings of StanChart and Westpac are not marketable to customers as adding value: Narrowing number of countries Diverging KYC Residents only Upfront non-refundable fee, far in excess of charge payable locally by a finance manager of the applicant to get an account Too many failed referrals

AGM view of ICM market Host Bank compliance departments reluctant to allow variations of outward referral process: Divergence of processes and controls over bilaterals IBOS is well-documented and maintained IBOS legal entity Articles of Association Ancillary Agreements/Manuals Website Escalation procedures Some banks are getting pressure to only conduct referral business through IBOS and want Asia/Pac and Africa added That is great, but we need: Statements of volumes Understanding that IBOS is buying for the group and the group needs to channel its volumes once a partner is there Understanding that IBOS is shopping for the IBOS service, not a version of a bilateral that is available to every other bank

AGM view of ICM market Many banks are out there now trying to buy bilaterals by country, for a region… Through their FI Group Without a statement of what is the service that will sell to end-users In IBOS that is our Open-for-Business Grid: the statements of what are the Ying and Yang of the IBOS Service which, added together, can be sold to clients Plus a lot of noise about Re Accounts, in spite of the Compliance issues – we cannot take that sort of risk in a multilateral model like IBOS

IBOS Strategic Positioning
IBOS Value Proposition IBOS Strategic Positioning IBOS’ advantages come into play: Geographical reach Depth of services in each country And all we have to do is…. DELIVER OUR PROPOSITION: Open-for-Business/Host Bank side = Ying Open-for-Business/Account-Holding Bank side = Yang Whoever performs Ying or Yang must do it as written These grids are the self-certification that each element of the network is ready, willing and able to come good on what it has signed up to do COMPLETE YOUR GRIDS DO IT

Open-for-Business 75% received back Report Cards have been issued against all of those Now there will be conference calls between Tom/Brian at IBOS and the BD/GSL Rep at each bank: Clarification/immediate amendment on the grid and on the bank’s website pages Agreement on remedial plan Switch into webinar mode IBOS Office has to identify the right technology for that: just webinar was challenged by the AGM

Open-for-Business amendment
IBOS Value Proposition Open-for-Business amendment The Report Card process has revealed some need for changes e.g. no preference for holding USD nostro at JPMorgan These will be circulated as one list with detailing of changes to the Grids and any Manuals, prior to sign-off

IBOS Value Proposition November 6th – 7th 2014 PNC Offices, Washington
PNC presentation November 6th – 7th 2014 PNC Offices, Washington

RBC presentation from the Roadshow
IBOS Value Proposition RBC presentation from the Roadshow November 6th – 7th 2014 PNC Offices, Washington

Ulster Bank presentation from the Roadshow
IBOS Value Proposition Ulster Bank presentation from the Roadshow November 6th – 7th 2014 PNC Offices, Washington

Marketing Support November 6th – 7th 2014 PNC Offices, Washington

Roadshow at AFP Attendance Only two BD Reps other than from North America What was presented: The IBOS video BL presentation based on IBOS Pitchbook RBC presentation Ulster Bank presentation Q&A Networking Feedback from attendees

PR achievements since June
IBOS Value Proposition PR achievements since June General achievemens - Tim The VIDEO – which we will now play The infographic for RMs, which was handed out at the Roadshow How the video and the infographic will be followed up Logo pack/branding guidelines Both the infographic and the branding guidelines are in the meeting pack

Still needed from the BD Group…
IBOS Value Proposition Still needed from the BD Group… Success stories generally Success story to replace Eataly in the IBOS Pitchbook Material for the quarterly Good News push requested by the Board

Not started by IBOS Office yet
IBOS Value Proposition Not started by IBOS Office yet SEPA Information Exchange follow-up to the SEPA Migration End Date in August 2014

Tim’s role towards the BD Group…
IBOS Value Proposition Tim’s role towards the BD Group… 1 quarterly call per BD Rep, covering that BD Rep’s member, associates and foreign branches Make sure that the reporting of Account Openings is being done in the new tool Collection of success stories from what is in the Tool Any other material for the quarterly Good News push Any other comments about the service, IBOS Office…

New website November 6th – 7th 2014 PNC Offices, Washington

New website Status of: Banks & Countries Processes & Resources Tools What is still to do in “Banks & Countries”

New website Requirements stated at the AGM: Visibility of what each bank will take on in terms of referrals, and the related documents needed, on their website pages, with challenge by other banks and by IBOS Office as to whether what is stated is useful and true Integration of the Sales Reporting & Deal Reporting Tools into one Each referral to be kicked off within the Sales Reporting Tool, even where completion is done locally (some Resident referrals) so that we can follow through with: Capturing all account openings including where completed locally Track timings Track reasons for rejection

New website Requirements stated at the AGM: Ability to promote a successful Account Opening into a “Deal” in the Deal Reporting level of the Tool Ability to introduce into the Deal Reporting level of the Tool a “Deal” that was not promoted from Account Opening We have the Manual for the new Tool in the pack, hot off the press, so let’s walk through it and make sure that we all understand how this will work from now on It will be Tim from now on who leans on you once a quarter to get your data into the Tool

Usage of CRS in pdf format
IBOS Value Proposition Usage of CRS in pdf format Now available in the website Replicates the Word version IT requirements There is now no CRS Appendix because all the contents of that must now be in the respective bank’s pages in “Banks and Countries”

Business Volumes November 6th – 7th 2014 PNC Offices, Washington

Annual Business Plan and AGM Agreements
This is a run-through of the agreed pathway and process that we are in We should be towards the end of it The bilateral sessions that follow are the culmination of it You should leave the sessions with your “corridor” banks with clear plans for what you are going to do together in 2015

Business Development effort
Banks have agreed that they are in this to act as ICM Coordinator for their customers 2 BD meetings per annum plus more self-service in the website means that banks have agreed to take over the responsibility for driving more business through the network The Taplow meeting decided that the main dimension of expansion was new banks in new countries – not more banks in the same countries duplicating one another The second dimension of expansion is: Associate Banks of existing members, to act as both Host Bank and/or Account-Holding Bank at their discretion and in accordance with their capabilities Foreign branches of existing members to act as Host Bank in accordance with the Open-for-Business Grid/Host Bank The third dimension of expansion is New Services

Pre-work requested of BD Reps
What is your bank’s base of IBOS business: As Host Bank: Retention of existing business thanks to IBOS Addition of business on that base thanks to being ICM Coordinator As Account-Holding Bank: Direct Payments & Cash Management revenue Wider exploitation of relationships referred in by other IBOS partners What is the ambition level to expand that: Add customer numbers Add Associates Add Foreign Branches What are the actions, commitments and resources needed within the member bank in order to deliver on the ambition level? What is the support needed from other IBOS partners to deliver on the ambition level?

BD Targets The ambition level needs to be expressed as targets for the BD Rep + team to deliver upon… Backed up by the internal actions, commitments and resources needed to deliver “Commitments” cannot go further than the normal commitment of a TM salesgroup or an RM to market one of the bank’s own products IBOS should not be marketed autonomously

Proposition to be marketed
It is “International Cash Management with our bank as Coordinator” that should be marketed: With IBOS’ role within that clearly shown With the benefits to the TM salesgroup and RM clearly articulated The IBOS video and a supporting flyer are aimed at bringing out the benefits to TM salesgroup and RM The commitments requested come down to: Putting that in front of enough customers Reporting back on the responses Following through with the bank on the other end of the potential business

Support from other banks
Bilateral discussions for developing business have become a main feature of the BD meetings Needs further focusing in the light of banks’ individual plans Which “corridors” does each bank see potential in such as to want to work specifically on it? Is the discussion with the IBOS partner at the other end of that corridor active and focused enough? Is there a specific action plan? How is progress being tracked?

Washington BD meeting Extended bilateral sessions to cut to the chase of bilateral action plans and tracking Board members need to steer that for their member, as well as for activity at their Associates and Foreign Branches

Speed-dating referral workshop
IBOS Value Proposition Speed-dating referral workshop November 6th – 7th 2014 PNC Offices, Washington

New Services November 6th – 7th 2014 PNC Offices, Washington

Decisions of the AGM Agreed to continue the investigation phases of:
Account reporting in SWIFT via the SWIFT Working Group Remotely-initiated low-value credit transfers and direct debits via a group of Host Banks

ISO20022 XML camt reporting Assumptions:
IBOS should not write its own standards in this space Banks will want to define, for their country, camt messages for intraday and previous day that are are good for usage in a number of business models: IBOS Bilateral partnerships SCORE etc IBOS can play a role in helping IBOS banks to define the population of the messages for specific transaction types in their own country plus generic transaction types like MT103 The objective should be to overcome the limitations of MT940/2, such as: Truncated transaction data “retail” activity like cash and cheques not appearing on multibank intraday reporting The value of the service in IBOS would be that the reports are coming from banks in many countries who support all transaction types in their country

ISO20022 XML camt reporting The technical solution defaults for the above reasons to using camt messages sent between the banks using SWIFTNet FileAct The reports should not come through a central engine because: IBOS banks do no want to share technology Any such engine would (in the opinion of IBOS Office) have to obtain a Payment Institution licence if Payment Services Directive 2 is enacted as currently drafted We participate in SWIFT’s Working Group, set up with this solution in mind at the request of the German banking community headed by UniCredit

camt statements/discussions at SIBOS
Very slow progress with SWIFT – we had been referred to a sub-group of CGI but without any tangible evidence that it exists and is active BL and Scott Frazer of PNC had a meeting with two senior SWIFT reps at SIBOS to make the case for a much more active support and ownership on SWIFT’s side Follow-up paper to SWIFT to demonstrate marketplace movement and how CGI is aligned to SWIFT Corporate Access (where corporates get a BIC) and show this inhibits SWIFT giving proper support to IBOS, where the corporate is serviced by their bank In reality there are 9 users who use the bank as aggregator for every 1 that uses SWIFT or another player

camt statements/next steps
SWIFT have been asked by IBOS and the German Banking Community to step on the gas on our project and not to continue to direct us to CGI or the Payments Market Practice Group – it is a different market

Scope comparison CGI Camt relay Working Group Channel: Services:
SWIFT (direct/Bureau) FSN, Host-to-Host Services: Bulk files of credit transfers & direct debits Extended remittance information Tax and salary payments Summary: Perfecting the operation of Payment Factory/SSC Not involving the types of local transactions that the Global Banks cannot handle efficiently or at all Channel: eBanking of the main bank Supplemented by host-to-host or file upload with main bank Services: Local & cross-border payments Reporting on these and on: Paper-based payments Quasi-payments (LCR, RIBA..) Treasury transactions (FX, Loan..) Ancillary transactions (charges, interest) Summary: Related to full-service banking from full-service banks

Remotely-initiated low-value credit transfer and direct debit service
IBOS Value Proposition Remotely-initiated low-value credit transfer and direct debit service November 6th – 7th 2014 PNC Offices, Washington

Low-value credit transfer and direct debit service – AGM agreements
The AGM agreed on many of the parameters for this investigation, mainly that each Host Bank has to have its own Enterprise Application Integration architecture Every bank that handles payment files will do its AML check on the contents, even where the bank passes the files off to another bank for execution That means the Host Bank needs to perform: Handling files with input/output formats that the bank does not process Handling files out of which the bank will only process a portion themselves Unwrapping them putting all the contents through AML checks Rewrapping a large proportion and relaying it to other banks Who will unwrap them and put them through AML checks again

Low-value credit transfer and direct debit service
IBOS should not deviate from industry standards on its IT approach, even if some of those standards are still emerging, and should not create an engine that might have to obtain a Payment Institution licence This also means that IBOS banks would not get a service that is a differentiator in its own right at a detailed level, but would have value as part of an expanded value package As a result the technical configuration most likely to gain acceptance is: Files are sent between banks over SWIFTNet FileAct The data contents are in ISO20022 XML and specifically the CGI rendition (“Common Global Implementation”) A supposition is that corporate banks will need to support that configuration anyway as Account-Holding Bank under SCORE, SAP FSN (?)… So why not within IBOS?

Low-value credit transfer and direct debit service
This was agreed - a technical configuration that is most likely to minimize investment and development on the Account-Holding Bank side (and enable a competitive price-per-item) All Account-Holding Banks are being asked to confirm their state of readiness for that, on the GSL side, for a conference call on 21st November The outstanding and main issue is for the Host Bank side: Are customers asking for this? How many? What volumes? What are the destination countries? Does the Host Bank already have an Enterprise Application Integration architecture capable of supporting their side of the service? If not now, is such a project in train and what is its status?

BD side “strawman” BL has been struggling to – but will eventually – succeed in producing a “strawman” for the banks that expressed interest in this service as Host Bank: Are customers asking for this? How many? What volumes? What are the destination countries? The banks are: RBS/Ulster RBC SVB US Bank PNC Intesa SanPaolo UniCredit

Account Opening stream – next phase
IBOS Value Proposition Account Opening stream – next phase November 6th – 7th 2014 PNC Offices, Washington

Account Opening – 1 - complete
Re-engineering of IBOS Member website Asking banks to submit Open-for-Business grids and check the data on the website Comparing “Open for Business” returns with website data isolating/resolving inconsistencies Coming to a first conclusion of the delta between the Service Level and what the bank is supporting (= Report Card) The results of the discussions in Lisbon have been landed in the new website in “Processes & Resources”

Account Opening – 2 – in process
Complete - pdf version of CRS, with no CRS Appendix or bank-specifics Report Card calls = challenging the substance of the “Open for Business” returns and the website data: Is each bank’s offering saleable? In IBOS Office’s view In the view of other banks In the view of the bank itself What are the blockers? Pricing/fees? Criteria? Translations? Asking for gaps to be filled = plan for remedial action

Account Opening – 3(i) pdf version of CRS, with bank-specifics
Altering the deal regarding the language of Background Documents for Non-resident referrals (the AGM agreed this): all Account-Holding Banks are asked to accept documents in English as opposed to having them translated into the language of the Account-Holding Bank where different It has become impossible to hold the line against translation of Background Documents so we must at least ensure that customers only have to do one translation Now that so many organisations are ‘obliged entities’ the customers will need them anyway This does not preclude any bank continuing to accept the Background Documents in original language and just rely on the Letter of Introduction… But we cannot have Translation/Notarisation/Apostiling

Account Opening – 3(ii) Abolition of the time limit stated in the Letter of Introduction before an applicant can be introduced Why is this relevant when we now all have to do so much work to onboard a customer in the first place: Know Your Customer Know Your Customer’s Business What is it that we know after x years that we do not know at the start? We have to refresh KYC and KYB annually in any case What would it take to get a new policy agreed internally?

Account Opening – 3(ii) Sales benefits of abolition of the time limit:
New start-ups can be taken on The IBOS service can be used to attract new customers to the Host Bank, not just to lock in existing customers The key will be that the Host Bank RM is willing to make the attestations needed

Account Opening – 3(iii)
The AGM was very keen on this next idea and saw it as the priority and potentially adding great value: Collection of an account applicant’s Background Documents in digital form in a secure database under the control of the applicant’s Host Bank The documents are shared with the Account-Holding Bank with the applicant’s permission The Account-Holding Bank recognises that they come from a Trusted Third Party that is viewed as being a ‘Whitelisted’ third party and is permitted to accept ‘facsimile’ documentation under its national law The Account-Holding Bank can read them because they are in English (or else the bank is willing to accept them in original language)

Docusign SVB briefed the Account Opening stream on their Docusign project We had a webinar with Docusign over the summer – very positive IBOS Office has briefed IBOS’ lawyer to: look into the acceptability/legal enforceability of ‘facsimile’ documents and in which IBOS countries this applies suggest amendments to the Account Opening Agreement and the Letters of Introduction that cater for the change of process, and for the abolition of the timelimit propose the wording of the endorsement that the Host Bank would have to put behind each applicant’s package such that the Account-Holding Bank would accept its authenticity IBOS Office is preparing a paper on FATF 2012 Recommendations and 4th EU AML Directive to demonstrate why IBOS banks are permitted to regard one another as Trusted Third Parties

Docusign Then we need to understand the licence structure of Docusign and how IBOS, or its banks, would buy it and operate it We would also need to design the process between the IBOS website/Sales & Deal Reporting Tool to link a referral kicked off in there to a package of documents lodged in Docusign by the bank that kicked off the referral Then that needs to go to the Board as an proposal: For Stage 1 For Stage 2 – see over

Stage 2 - expanded eBam functions
IBOS Value Proposition Stage 2 - expanded eBam functions Expanded eBam goes farther than SWIFT eBam… Onboarding of an applicant hitherto unknown to the Account-Holding Bank Opening the first account and getting services set up SWIFT eBam: Open a second or third account.. Add/delete/amend mandators and signatories Close an account without closing the relationship The Board does not believe that the eBam actions need to be fully automated at the Account-Holding Bank As long as we have a service level and timings, and that the messages between the Host Bank and Account-Holding Bank are eBam messages

BD Meetings in 2015 November 6th – 7th 2014 PNC Offices, Washington

BD Meetings in 2015 May and November Europe Volunteers

Status Check on BD Group actions
IBOS Value Proposition Status Check on BD Group actions November 6th – 7th 2014 PNC Offices, Washington

BD Group Actions status
Usage of the IBOS Pitch Book and IBOS Value Proposition Supply of each bank’s own Pitch Book Associates’ competitors for PGS

Any other business November 6th – 7th 2014 PNC Offices, Washington

Any other business and Conclusion of BD Meeting
2015 Summer Course: Sunday 23rd – Friday 28th August Agenda will include New Payment Companies Otherwise the board endorsed the event and the agenda Close of meeting

PNC Offices, Washington

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