BGC – Bankgirocentralen Impact from SEPA on BGC
Presentation, by Mats Wallén ”Domestic ACHs in SEPA” at Magyar Nemzeti Bank conference 2005-10-21
2005-10-24
Agenda 1.
Introduction Æ BGC company information Æ The Bankgiro system and products
2.
Other considerations Æ Euro referendum Æ Bankgiro euro functionality
3.
Trends that influence Sweden Æ A changing European payments market
2005-10-24
4.
BGCs strategy
5.
Summary
BGC - The Swedish Automated Clearing House Key facts Æ ÆEstablished Established 1959 1959 Æ ÆBGC BGC is is owned owned by by SEB, SEB, SHB, SHB, FSB, FSB, Nordea, Nordea, Danske Danske Bank, Bank,
SkandiaBanken, SkandiaBanken, LF LF Bank Bank and and Kaupthing Kaupthing Bank Bank Æ ÆApprox. Approx. 435 435 employees employees at at the the Stockholm Stockholm office. office. Æ ÆTurnover Turnover of of MSEK MSEK 850 850 in in 2004 2004 (approx. (approx. 92 92 MEUR) MEUR)
2005-10-24
BGC - The Swedish Automated Clearing House Products Products and and service service offering offering Æ Æ
Main Main business, business, Bankgiro Bankgiro system system Æ Æ Æ Æ
Æ Æ
BGC BGC offers offers Æ Æ Æ Æ Æ Æ
Æ Æ
aa scheme scheme for for processing processing payments payments 18 18 participating participating banks banks payment payment and and business business transaction transaction information information services services solutions solutions for for secure secure digital digital identification identification electronic electronic invoice invoice
Our Our products products enable enable Æ Æ Æ Æ
2005-10-24
secure secure and and efficient efficient business business transactions; transactions; for for our our clients clients Swedish Swedish banks, banks, enterprises enterprises and and public public institutions institutions
Transaction flow in Bankgirot Invoice 1. Payment initiation, B2B
2/4. Processing
8. Remittance advice
Customer (1. Altenative payment initiation) C2B, SMEs
Supplier 5. Debit advice + transaction report
Bankgirot 6. Clearing position and settlement details
3. Debet authorisation
6b Settlement
3b. Debit book entry
Payer’s (customer’s) bank
2005-10-24
Central bank
7. Details for credit book entry
7b. Credit book entry
Receiver’s (supplier’s) bank
Features of the Bankgirot system Æ Æ Æ Æ
Æ Æ Æ
2005-10-24
Supports direct submission from payers and BGC submits electronic credit advices to the payees High level of automation for payers and payees and the participating banks (End-to-End STP) Same day payments (main cycle over night) Supports portable accounts. Giro numbers can be re-linked overnight to a bank account with a bank selected by the customer. Facilitates flexibility to change bank relationship Several giro numbers can be linked to one bank account. Simplifies liquidity planning BGC is compliant with the SIPS 10 Core principles Payment products in SEK and EUR (from 1999)
Supports fast retail payments with settlement at the Central Bank BGCs clearing and settlement system process 28 daily settlements Æ 14 related to the Bankgiro system Æ 4 related to DCL (account to account transactions) Æ 10 related to other transaction flows Æ ATM
Æ
transactions, Cash handling (coins and notes), Card transactions (Europay), National debt office payments, Dividend payments for Swedish shareholders through the national CSD (VPC) Settlements both in SEK and EUR
2005-10-24
11.26 SEK
11.25 SEK
10.30 SEK
09.05 SEK
08.21 SEK
11.27 EUR
12.00 SEK
12.30 EUR
13.00 SEK
11.00 SEK
13.05 SEK
09.06 EUR
13.25 SEK
13.26 EUR
15.26 SEK 08.31 SEK
15.20 SEK 15.27 EUR 15.30 SEK
08.20 SEK 07.15 SEK 07.30 SEK
16.20 SEK 16.00 SEK
Other BGC products Æ Æ Æ Æ
B2C Electronic invoicing B2B Electronic invoicing PKI Services (not only for financial services) Service bureau for SWIFTNet Æ
2005-10-24
BGC also use SWIFTNet FileAct in the interaction with participating banks
Agenda 1.
Introduction Æ BGC company information and general introduction to The Swedish payments market Æ The Bankgiro system and products
2.
Other background information Æ Euro referendum Æ Bankgiro euro functionality
3.
Trends that influence Sweden Æ A changing European payments market
2005-10-24
4.
BGCs strategy
5.
Summary
Other background information Æ Æ Æ
2005-10-24
Majority voted against the introduction of euro Great skepticism among the man on the street to EU and the Commission On the other hand try to best in class to implement directives
Agenda 1.
Introduction Æ BGC company information and general introduction to The Swedish payments market Æ The Bankgiro system and products
2.
Other background information Æ Euro referendum Æ Bankgiro euro funtionality
3.
Trends that influence Sweden Æ A changing European payments market
2005-10-24
4.
BGCs strategy
5.
Summary
A changing European payments market Over arching pressure
Need for change
Reduced costs Æ
To establish the vision of the internal market Æ
Æ
Focus: one market, price for the consumer
General business economical motive to achieve efficiency by scale which will give lower costs
Govenment pressure
1. 1.Harmonizing Harmonizing of of schemes schemes Æ Æ New New Legal Legal Framework Framework create create one one harmonized framework for the harmonized framework for the European European payment payment market market
2. 2. Standards Standards Æ Æ Need Need for for standardization standardization of of formats formats and and products products
Market pressure
3. Consistent infrastructure infrastructure 3. Consistent Æ Æ
2005-10-24
Pressure Pressure to to reduce reduce the the number number of of infrastructure for transaction infrastructure for transaction processing. processing.
Trends that influence Sweden Æ
Æ Æ Æ
2005-10-24
Harmonization and adaptation of international standards in the domestic circuit Banks see increased use of IBAN in cross-border transactions No decision to natively handle IBAN in domestic systems (BG or DCL) Discussions within the banks on impact from PEDD. Some international customers are starting asking for it
Electronic transactions continue to grow in Sweden Form payments
Electronic payments
500 450 400
Million
350 300 250 200 150 100 50 0 1996 Source: BGC's statistics 2005-10-24
1997
1998
1999
2000
2001
2002
2003
2004
Agenda 1.
Introduction Æ BGC company information and general introduction to The Swedish payments market Æ The Bankgiro system and products
2.
Other background information Æ Euro referendum Æ Bankgiro euro functionality
3.
Trends that influence Sweden Æ A changing European payments market
2005-10-24
4.
BGCs strategy
5.
Summary
Challenges on BGC Transactions cost will be lower in Euro-area Average cost per 0,9 Bg-transaction 0,8 (SEK) 0,7
Reduce gap !!
0,6 0,5 0,4 0,3
Estimated processing cost within the Euro area (rich functionality)
0,2 Expected cost level for ACH with thin funtionality
0,1 0 2004
2005
2006
2007
2008
2009
2010
2011
2012 År
2005-10-24
How to reduce the gap? Adapt knowledge and culture Face Facechallenges challengesfrom fromthe the European Europeanmarket market BGC vision Focused Focusedbusiness businessdevelopment development
Increase Increaseproductivity productivityand andquality qualityin inthe thedelivery delivery Use partners to achieve flexibility and efficiency
2005-10-24
Agenda Æ
Introduction Æ BGC company information and general introduction to The Swedish payments market Æ The Bankgiro system and products
Æ
Other background information Æ Euro referendum Æ Bankgiro euro functionality Trends that influence Sweden Æ A changing European payments market BGCs strategy Summary
Æ
Æ Æ
2005-10-24
Impact from SEPA on the Swedish market 2008 European products for crossborder payments
European products in domestic system
European products
Domestic products
2003
2008
The The impact impact will will be be low low as as Euro Euro is is not not the the domestic domestic currency currency
2005-10-24
2010
Summary Æ Æ Æ Æ Æ
2005-10-24
Reduce the gap Focus on business development Increase productivity and quality Direct impact from SEPA will initially be low Be the market leader for electronic invoicing in Sweden
Q&A
[email protected] +46 8 725 66 45
2005-10-24
