General principles for international remittance services

Transcription

1 General principles for international remittance services Comments on CPSS/WB consultative report Jaap Kamp Chairman, SWIFT Board of Directors Washington D.C., 10 May 2006 CPSS_051006_v2.ppt Slide 1

2 Slide 2 SWIFT IN FIGURES 2.5 billion messages per year 7,860 customers 204 countries Average daily traffic 10 million messages Peak day of 12 million messages 28 February 2006

3 Slide 3 SWIFT ACTIVITIES Payments 1,442 million mgs 57% 34% 6% 2% Treasury 159 million mgs Securities 858 million mgs Trade services 46 million mgs

4 Slide 4 SWIFT & REMITTANCES March 2005: European SWIFT Alliance meeting: brief presentation by Jackie Keogh/Michael Whyte standards, message or application development considered premature SWIFT to facilitate debate on the subject March to September 2005 Articles on Conference session at Sibos 2005: Defining the remit in the Remittance Business December 2005 SWIFT Board of Directors proposes topic as one of the 10 market facing initiatives in SWIFT 2010 strategy. Explore in objectives Convene working group: first meeting 20 April 2006 in London Make go/no go recommendations by end of year.

5 Slide 5 REMITTANCES - SWIFT research consistent ISSUES FOR BANKS with CPSS/WB paper Regulatory Lack of level playing field Rules disproportionate to risks Marketing & distribution Collectively, banks have a low market share Bank services seen as expensive and slow Banks not trusted Bank distribution reach lacks scale of MTO s Lack of strong brand Remittance networks Correspondent banking systems designed for lo-volume/hi-value payments Messaging standards not used homogenously Lack of interoperability between x-border and domestic formats Complex clearing and settlement leading to costs/delays.

6 Slide 6 THE 5 GENERAL PRINCIPLES - Where can SWIFT play a role? 1. Transparency & consumer protection The market for remittance services should be transparent and have adequate consumer protection 2. Payment system infrastructure Improvements to payment system infrastructure that have the potential to increase the efficiency of remittance services should be encouraged 3. Legal & regulatory environment Remittance services should be supported by a sound, predictable, non-discriminatory and proportionate legal and regulatory framework in relevant jusrisdictions 4. Market structure and competition Competitive market conditions, including appropriate access to domestic payments infrastructure, should be fostered in the remittance industry 5. Governance & risk management Remittance services should be supported by appropriate governance and risk management practices. CPSS/World Bank Consultative Report on Remittances (March 2006)

7 Slide 7 SWIFT AD-HOC WORKING GROUP - London 20 April 2006 INSTITUTION BBVA Group - Bancomer Transfer Services CEDICAM / Crédit Agricole Group Citigroup DZ BANK AG Equitable PCI Bank Garanti Bank ICICI Bank ING POSTBANK SIA Ced Borsa SpA. Standard Bank of South Africa Ltd. COUNTRY United States France United States Germany The Philippines Turkey India The Netherlands Italy South Africa

8 Slide 8 WORKING GROUP MEETING - London 20 April 2006 OBJECTIVES Assess if there are opportunities for banks in the migrant remittance market Identify barriers banks face in entering/expanding in this market Assess if there is high level business agreement on the need for collaborative action to overcome barriers Define SWIFT s role in overcoming barriers agree concrete actions and outline project plan

9 Slide 9 WORKING GROUP MEETING - London 20 April 2006 OUTCOME Working Group asked SWIFT to be involved in this business Exact nature of SWIFT involvement needs to be more precisely defined - 3 routes are being explored at the request of the WG: support the setup of the Migrant remittances group, support the messaging, clearing and settlement infrastructure support the setup of a business positioning and regulators' lobbying effort.

10 Slide 10 NEXT WORKING GROUP MEETING - August/September 2006 DELIVERABLES High-level overview of interbank group structure High-level architecture for the infrastructure platform Recommendations for tightening SWIFT messaging standards to support cross border consumer payments Draft outline of global AML/KYC compliance program for regulated financial institutions

11 Slide 11 CONCLUSIONS CPSS/WB Initiative will lead to concrete results Different actors are now around one table (first time) SWIFT will build on its strengths (slide 56) Universally accepted payment formats for transactions and settlement (MT103/ MT202) Backbone infrastructure for correspondent banking Banks can reuse an existing infrastructure for remittance flows WB/CPSS should develop "Aviation model" for public private commitments in remittances