SEPTEMBER 2011 edition (e-journal)
Editorial by Martin Frick, CEO SIX Interbank Clearing Ltd
No end date, no SEPA
Gerard Hartsink, Chairman of the European Payments Council (EPC), speaks about the banks’ roles, responsibilities and achievements in the Single Euro Payments Area program to date. His comparative assessment of the situation in a number of SEPA countries reflects the current debates and concerns.
One, two, three, four – SIC4
It’s been almost 25 years since the SIC system was introduced to the Swiss financial center – a milestone in interbank payment processing. When it comes to meeting the needs of today's financial institutions, however, its IT design is starting to reach its limits. SIC4, the new SIC architecture, is the answer to the challenges of the coming decades.
20022: Roadmap to ISO
The Swiss financial center is currently developing a study to prepare for migrating the Swiss payment traffic to ISO 20022. The current national payment schemes and formats used in Switzerland are to be standardized and adapted to those of the euro zone by 2018.
ISO 20022: Validation support
The Swiss financial industry is advancing the introduction of the XML standard ISO 20022 for payments. Replacing the proprietary national formats holds the potential for considerable cost savings. Financial institutions, software providers and business customers have had access to a central validation software on the Internet since mid-August 2011. It is aimed at supporting the migration to the new payment data set.
Remittances from a processing perspective
The numbers reveal that global remittance payments are showing solid growth, and Switzerland is no exception. Each year, immigrants send billions of Swiss francs back to their home countries. Payment services providers have recognized the potential of and increasing reliance on cell phones as a means of credit transfer. The Swiss National Bank is observing the developments with interest.
New era in Liechtenstein’s postal payment traffic
The EU’s Payment Services Directive (PSD) and its implementation in Liechtenstein‘s national legislation leaves its mark on postal payment traffic services. Cooperation between Liechtenstein and Switzerland had to be adapted. Since early May 2011, Liechtenstein’s Post has been solely responsible for handling the postal payments.
JUNE 2011 (E-JOURNAL)
Editorial by Marcel Schuler, Head of Client Support Center, Credit Suisse Group Ltd, and Chairman of the Board, SIX Interbank Clearing Ltd
The year of e-commerce
Technology and telecom companies, cellular phone operators, and credit card corporations are currently all participating in the race for the electronic consumer wallet. And what roles do financial institutions play in this scenario? Dr. Hansjörg Leichsenring, a respected expert and bank consultant within the German-speaking markets, takes a closer look at trends in mobile payments.
The Swiss knife of the future
The cell phone is the future Swiss knife. Mobile Internet is indispensable for many users, whether they only want to check the weather service and watch the stock market, or whether they are already using their cell phone for banking transactions. The trend is clear: Before too long, more people will be accessing the Internet via their mobile devices than at their stationary computer.
Doing money transactions with applications
The mobile phone is changing our lives, our economy, and our business models. The music and movie industries are already in the middle of this revolution. Newspaper publishers fear for their customer relations, because thirdparty companies like Google and Apple can control access to editorial articles via iPad and cell phone. Payment traffic is no exception: It's also being affected by this trend.
A prepaid card for the Internet
Last November, the "Internet Cash" card was launched by Swiss Bankers Prepaid Services – in cooperation with MasterCard. The Swiss Bankers company was founded 36 years ago by the banks as the center for travelers' checks, and today is a bank itself.
Online payments without credit card
Recently, a new, global, safe and secure method to make and receive payments on the Internet without the use of credit cards has become available. For the first time in payment traffic history, SuisseID, the secure electronic proof of identity, is being used by the SwiKey company.
Scaring away malware
In recent years attacks on Internet banking services have evolved from rather simple credential stealing attacks to advanced content-manipulation attacks by means of malicious software seeded on the client end-devices. A praxis implementation at UBS shows how to counter those risks with regard to convenience and mobility of the customers while maintaining the highest level of security.
MARCH 2011 (E-JOURNAL)
Editorial by Roland Böff, CEO Swiss Euro Clearing Bank
Onion skin model for the payments infrastructure
Dr. Romeo Lacher from Credit Suisse, Vice Chairman of the Board of Directors and one of the architects of SIX Group, highlights in retrospect the positive experiences with the new governance structure and spotlights the strategic challenges and opportunities, particularly in regard to payment traffic.
IPFA is becoming operational
Within SEPA, cross-border euro payments are considered domestic transactions among the European countries. This lowers the foreign payment traffic volume without proportionately lowering fixed costs. This is where the International Payments Framework Association (IPFA) offers valuable potential savings to banks.
ISO 20022: Standardizing vision in payments
Today's plethora of processes and formats causes high costs for financial institutions, their customers and the Swiss financial center as a whole. A uniform payment approach, handled identically by all parties involved, can substantially lower overall transaction costs.
New SWIFT services within the current 5-year strategy
New screening service in the area of sanctions systems and a new directory with a diagnostic tool.
Out of Africa
Is SEPA having effects beyond Europe? On each continent, SEPA-type visions are emerging. But it's usually a long and rocky road until a full implementation becomes reality. Two African examples.
DECEMBER 2010
Editorial by Daniel Wettstein, Head of Banking Operations, Swiss National Bank, Member of SIX Interbank Clearing's Board of Directors
TARGET2-Securities: The benefits for Switzerland as a financial center
European cross-border securities settlement is associated with very high costs and inefficiencies. TARGET2-Securities (T2S) plans to overcome national fragmentation, allowing highly efficient and low-cost settlements in central bank money. Jochen Metzger of the Deutsche Bundesbank, member of the T2S steering committee, sheds light on upcoming challenges, pricing and bank expectations – and why the participation of the Swiss market is in everyone’s interest.
New payments infrastructure
At its fall session 2009, the Board of Directors assigned SIX Interbank Clearing the task of developing a new architecture for the Swiss payment traffic infrastructure. The decision-making body for the Swiss financial center will determine a specific plan of action by the end of 2010.
Simulation confirms efficiency of payment processing
The interbank clearing system SIC processes transactions in a predetermined order. If participants don’t have enough assets available for immediate processing, waiting queues are formed, which are then reduced at variable speed, depending on the settlement mechanism being used. Simulations have proven the efficiency of SIC’s current settlement mechanism.
Credit Suisse's bank note trading
In the past, costly investments in technology and security caused many banks to discontinue their bank note trading. Not so, Credit Suisse; the institution is still operating bank note trading professionally.
Cash handling outsourced
The Banque Cantonale Vaudoise has outsourced its entire physical cash processing to MAT SECURITAS EXPRESS, number one in national valuables logistics. MSE operates the Cash Center for the bank, carries out the related valuables transportation, and supports it with management of its ATMs.
PSD in Liechtenstein after one year
At the end of 2009, the provisions of the EU Payment Services Directive (PSD) were implemented in Liechtenstein law by the so-called Zahlungsdienstegesetz (ZDG). Because Liechtenstein banks and trade traditionally process their payments through Swiss payment providers due to the monetary union with Switzerland, there were some concerns at the outset that the implementation of the PSD could potentially lead to a significant encroachment upon this existing network.
SEPTEMBER 2009
Editorial by Michael Montoya, UBS AG, SIX Interbank Clearing Board of Directors Member
Europe leads the way in providing the state-of-the-art card infrastructure
All card business service providers compete with one another, from the institutions as issuers and the card organizations, to the acquirers and payment processors, to the payment service providers and merchants. The card industry as a whole also has a powerful common competitor: cash. Jörg Metzelaers from Visa Europe is upbeat over a constructive cooperation between the parties involved and sees a great deal of growth potential still existing in cashless payment transactions.
MIF – The EU Commission’s perspective
Following the European Commission’s retail banking sector inquiry published in early 2007, the Commission has conducted a number of high-priority investigations in the payments sector. The timeliness of such actions was underlined by the banking industry's self-regulatory SEPA project, which is aimed at creating an integrated payments market.
Economies of scale in the card business
The propagation of payment cards has been conquering the world for the last 60 years thanks to their various usage possibilities, flexibility and convenience. In Switzerland alone, more than 600 million transactions are generated at 150,000 acceptance points by more than 10 million cards. The annual industry growth rate is higher than 8%.
The future of SEPA direct debit is now
At the end of 2009, SIX Group launched its SEPA Direct Debit Service for the European market. Thus far, banks from Switzerland, Luxembourg, Monaco, Germany and Spain have become users of the offering, which enables to collect pan-European standardized SEPA direct debits. The growth potential is considerable.
Cover payments in euro via SWIFT
As of November 22, 2010, the Swiss payment system euroSIC will be able to process the message type MT202COV. Two years ago, at its launch by SWIFT, the Swiss financial center voiced opposition to the introduction. But demand from the financial institutions has caused reconsideration.
JUNE 2010
Editorial by Beat Witschi, Head of Products, Member of PostFinance's management, and SIX Interbank Clearing Board of Directors member
Searching for the core business
Cost pressure continues to increase among financial service providers, not least because of the financial crisis. Insourcing and outsourcing, efficiency, value creation, competition, compliance, standardized services: these are central issues in Swiss payment traffic. A practical, high-carat discussion on the topic took place at the Swiss Banking Operations Forum on April 27 in Zurich.
Compulsory SEPA Direct Debit Scheme participation
Since its introduction in late 2009, the use of SEPA direct debits across Europe has been rather low. A significantly greater number of transactions is now expected as a result of the new EU pricing regulations committing all EU banks to accept SEPA direct debits. Although Switzerland isn’t directly affected by this new legislation, it will have an impact on the Swiss financial institutions nonetheless.
SEPA e-Payments for the Swiss financial center?
For about two years now, the European Payments Council has been working on a set of regulations intended to standardize Internet payment methods within the 32 SEPA countries and to ensure interoperability. In April of 2010, the Swiss Payments Council approved the first basis for making decisions regarding the possible introduction of standardized e-payments in Switzerland.
Towards enhancing the resilience of financial markets infrastructures
Financial market infrastructures proved to be quite resilient throughout the recent financial crisis. Nonetheless, there are lessons to be learned to further strengthen the infrastructures and guard against future crisis. Wide-ranging initiatives are being undertaken in the area of international standards for the infrastructures.
The International Payments Framework Association is formed
21 banks, clearing houses and associated payment service providers recently met in London to establish the International Payments Forum Association (IPFA). The purpose of the framework is to enable the exchange of multi-currency non-urgent payments between member organizations; whether through a clearing house or directly or through Member banks, utilizing the same standardized process and operating procedures.
MARCH 2010
Editorial by Philippe Lüdi, Entris Banking
Rough winds of competition among financial centers
The Swiss Bankers Association, Swiss Insurance Association, Swiss Funds Association and SIX Group, as the primary financial center players, in 2007 developed jointly a future strategy for the first time. Within the international environment, where is the financial market situated today, particularly considering the effects of the financial crisis? Dr. Urs Rüegsegger, CEO SIX Group, takes stock.
Swiss Value Chain: National Bank broadens participation
The Swiss National Bank has decided to expand access for participation in the giro, SIC and repo system by January 1, 2010 to include specific marketplace participants without a banking or securities brokering license.
News from the payment traffic committees
The time invested by the Payments Committee Switzerland in 2009 alone amounted to more than 500 work days for various standardization tasks concerning cashless payment traffic. Dozens of experts from the Swiss financial industry are involved in this and other national financial market payment traffic bodies. They will continue to have to grapple with permanent topics like the IBAN, SEPA, XML, and BCP, but with new challenges such as e-Payment issues, as well.
German/Austrian/Swiss working group cooperation proves successful
For almost two years now, an informal working group comprised of German, Austrian and Swiss representatives has been meeting regularly to address the harmonization of ISO 20022 payment message standards to be implemented for German-speaking countries.
New SWIFT architecture proves productive
With the opening of the SWIFT computer center in Switzerland at the end of 2009, payment messages from Switzerland are no longer stored in the USA unless the counterpart account is in the USA.
New continuing education for banking successfully established
Towards the end of 2004, the Swiss Bankers Association introduced a change within the banking and finance-related continuing education system. The first Swiss Finance Institute graduates in Banking Economics successfully completed the new course of study in October of 2009. During the program, payment traffic topics were also imparted using a hands-on approach.
DECEMBER 2009
Editorial by Martin Frick, CEO SIX Interbank Clearing und SIX Paynet
SEPA legal framework from the Swiss perspective: Market access through legal comparison
Since 2006, the attorney Martin Hess has been focusing on the Single Euro Payments Area (SEPA). As author of several reports for the financial centers Switzerland and Liechtenstein he is acknowledged as a Swiss SEPA expert.
How secure is payment by SEPA direct debits?
SEPA’s vision – to standardize cashless euro payments in Europe – was first realized with the launch of SEPA credit transfers in January 2008. Then, on November 2, another service was successfully started: SEPA direct debit. What role do security concerns play in the future acceptance of this payment instrument?
PSD increases competition
The EU regulations governing payment services for domestic markets – Payment Services Directive (PSD) – forms the legal basis for a modern legal framework for payments in the 30 EU/EEA countries, including Liechtenstein. Its purpose is to make payment traffic as simple, efficient and secure as possible, and to encourage competition. But the latter goal, especially, is questionable, as a new study now shows.
SWIFT access for corporate clients
The cooperative of financial institutions was founded in 1973 with the purpose of guaranteeing cross-border, secure transmission of messages between financial institutions. The success particularly drew the attention of globally active corporates interested in standardizing the interfaces and processes of their international correspondent banking networks.
Cover payments: Best practices of the new message type
On 21 November 2009 SWIFT introduced the new MT202COV format for cover payments. The move is designed to increase the transparency of international payment transactions with the aim of additionally bolstering measures designed to combat money laundering and the financing of terrorism. In concrete terms, all banks involved in the payment chain can calibrate the (additionally) provided data in the course of sanctions screening.
Good grades for CLEARIT
The readers’ survey was conducted the third time during the past nine years. And the upward trend is continuing!
