Slide 1 TARGET2_generic_v8.ppt Name of speaker Title Institution Event name, location and date SWIFTNet for the Single Shared Platform

Slide 1 TARGET2_generic_v8.ppt

Name of speakerTitleInstitution

Event name, location and date

SWIFTNet for the Single SWIFTNet for the Single Shared PlatformShared Platform

Slide 2

Agenda

IntroductionIntroduction

A comprehensive set of services for TARGET2A comprehensive set of services for TARGET2

SWIFT connectivity for TARGET2SWIFT connectivity for TARGET2

ConclusionConclusion

TARGET2 Preparation phaseTARGET2 Preparation phase

Slide 3

Trans-European Automated Real-time Gross Settlement Express Transfer

A system of systems (1 Jan 1999)

Slide 4

Typical Cross-Border Payment flow

Payment request Payment confirmation

Bank 1 Bank 2Central Bank 1 Central Bank 2

Interlinking

RTGS 1

Domestic

RTGS 2

Domestic

Slide 5

TARGET2 - Single Shared Platform

Interlinking via FINInterlinking via FIN

Bank A Bank B

Swift Net ServicesSwift Net Services

NCBs Ancillary Systems

Slide 6

Agenda






Slide 7

Bank A Bank B

payment messagepayment messageSWIFTNetSWIFTNet FIN CopyFIN Copy

Central SWIFT interfaceCentral SWIFT interface

Payment processingPayment processingBank ABank A Bank BBank B

SWIFTNet servicesSWIFTNet services FIN/FIN CopyFIN/FIN Copy

settlement settlement

requestrequest

authorisation/ authorisation/

refusalrefusal

SWIFTNetSWIFTNet

Payment module (PM)

Information & controlInformation & control module (ICM)module (ICM)

Internal Internal payment systempayment system

SWIFT interfaceSWIFT interface

SWIFTNet InterActSWIFTNet InterAct

Real-time cash managementReal-time cash management

SWIFTNet FileActSWIFTNet FileAct

Real-time reportingReal-time reporting

SWIFTNet infrastructure for SSP

SWIFTNetSWIFTNet FINFIN

SWIFTNet BrowseSWIFTNet Browse

On-line visualisation of On-line visualisation of informationinformation

Slide 8

Bank A Bank B

Optional messages

Interbank transfers - between HAM accounts

SWIFTNet FINSWIFT interface

Internalpayment system

Payment processing

Participant interface

SWIFT interface

Internalpayment system

1

2

43

HAM

1 MT202 “simplified”

3 MT202 “simplified”

4MT900 to senderMT910 to receiver

2 Booking

4

Slide 9

Payment processing in the SSP

Credit transfers and direct debits– MT103, MT103+, MT202 are mandatory

– MT204 is optional Settlement process

– FIN Copy MT096 and MT097 (full copy)

– MT012 sender notification (optional- by participant individually)

– MT019 Abort notification Statement of RTGS accounts (optional)

– MT940 customer statement message

– MT950 statement message

– For end-of-day reporting on all transactions settled on the RTGS account Update of credit lines (optional)

– MT900 confirmation of debit

– MT910 confirmation of credit

Slide 10

Bank B1

Payment Instruction

3 Settlement response

4Final Payment Instruction received

5Sender / receiver notification and reporting (Optional)

2 Settlement request

SettlementApplication

SWIFTInterface

SWIFTNet FINPaymentorder

Y- Copy1

2

4

53

Bank A

5

SWIFTNet FIN Y-Copy

Slide 11

SWIFTNet FIN

Y- CopyBank A Bank B

Payment order(MT103, 103+, 202,204*)

Temporary queue -Settlement request awaiting response from central institution

Use of FIN Copy for RTGS Payment Order

* MT204 is optional

Slide 12

Payment order

Bank A Bank B

SettlementRequest(MT096)

Use of FIN Copy for RTGS Settlement Request

Y- Copy

SWIFT Net FIN

Slide 13

Payment order

Y- CopyBank A Bank B

SettlementRequest(MT 096)

Approved / SettledPayment order

FIN Copy for RTGS Authorisation

Authorisation (MT 097)

SWIFTNet FIN

Sender notification(MT 012)*

* Sender notification is optional per participant

Slide 14

Payment order

Bank A Bank B

SettlementRequest(MT 096)

Rejection(MT 097)

AbortNotification(MT 019)

FIN Copy Rejection

Y- Copy

SWIFT Net FIN

Slide 15

Standard FIN Copy Security using MAC/PAC

SWIFT Y- Copy

MAC: A to B

PAC: A to Central Institution

PAC: Central Institution to B

Slide 16

SWIFTNet Phase 2 and TARGET2

Design/build/testPilots

Migration

2004 2005 2006 2007 2008

2004 2005 2006 2007 2008

Infrastructure upgrade

RMA usage

Development phase

User testing

Slide 17

TARGET2 – SWIFTNet Phase 2

ObjectivesObjectives To decouple SWIFTNet Phase 2

project planning from TARGET2 project planning

Avoid massive BKE between all TARGET2 participants

Allow all involved parties (end user and CI) to migrate independently

Slide 18

Consequences for TARGET2 participants Requirement: remove obligation for BKE exchange with

all T2 correspondents Solution: Pre-agreed MAC mechanism

– will be provided as FIN CBT upgrade to minimize necessary adjustments

– Description in UDFS version 1.1– Specification by SWIFT sent to CBT providers – Provision by CBT providers in 1Q2006– T2 participant is responsible for implementation

before start of testing phase– Still allow BKE if exists or required by auditors

For TARGET2 participants TARGET2 migration is independent fromSWIFTNet Phase 2 migration and vice versa !

Slide 19

PKI/BKEMAC bypass in TARGET2

SWIFT Y- Copy

MAC: A to B

PAC1: A to Central Institution

PAC2: Central Institution to B

A B

Central Institution (SSP)

Key exists ?

no

Pre-agreed MAC

yes

Slide 20

J F M A M J J A S O N D J F M

TestingNCBs

TARGET2 WAVE1

TARGET2 WAVE2

TARGET2 WAVE3

Phase 2 deadlinesfor Wave1 cust

Phase 2 deadlinesfor Wave2 customers

Phase 2 deadlinesfor Wave3 customers

Pilo

t tes

ting

to a

llow

ear

ly s

tart

with

Pha

se 2

fo

r W

ave1

cus

tom

ers

and

NC

Bs

InfrastructureUpgrade

Contingency

Standards2007

Phase 2 overlap with TARGET2 and Standards 2007

Slide 21 SR

2007

Tes

ting

SR

2007

J F M A M J J A S O N D J F M

CBs compliancechecks

Pilo

t tes

ting

to a

llow

ear

ly s

tart

with

Pha

se 2

fo

r C

W1

cust

omer

s an

d N

CB

sTARGET2 Live

date

TARGET2Start of user

testing

InfrastructureUpgrade

Contingency

TARGET2 CW2

TARGET2 CW3

TARGET2 CW1

GR GB

PTFINL

PL DKEE

IT

BE IE

AT CYLV LT

MT

DELUSI

FRES

Recommended Phase 2Migration for T&T (at least)



Slide 22

Bank A Bank B

payment messagepayment messageSWIFTNetSWIFTNet FIN CopyFIN Copy

Central SWIFT interfaceCentral SWIFT interface

Payment processingPayment processingBank ABank A Bank BBank B

SWIFTNet servicesSWIFTNet services FIN/FIN CopyFIN/FIN Copy

settlement settlement

requestrequest

authorisation/ authorisation/

refusalrefusal

SWIFTNetSWIFTNet

Payment module (PM)

Information & controlInformation & control module (ICM)module (ICM)

Internal Internal payment systempayment system

SWIFT interfaceSWIFT interface

SWIFTNet InterActSWIFTNet InterAct

Real-time cash managementReal-time cash management

SWIFTNet FileActSWIFTNet FileAct

Real-time reportingReal-time reporting

SWIFTNet infrastructure for SSP

SWIFTNetSWIFTNet FINFIN

SWIFTNet BrowseSWIFTNet Browse

On-line visualisation of On-line visualisation of informationinformation

Slide 23

Three complementary core SWIFTNet messaging services

SWIFTNet InterAct

SWIFTNet FileAct

SWIFTNet messaging

Messaging

File transfer

Secure, reliable, and STP-oriented. Appropriate for exchange of individual structured financial messages and short reports.

Secure, reliable, and flexible. Appropriate for exchange of batches of structured financial messages and large reports

BrowsingSecure browsing with standard internet technologies. Appropriate for data exchange in thin-client browser-based financial solutions. To be used with SWIFTNet InterAct and FileAct.

SWIFTNet Browse

Slide 24

SWIFTNet Browse overview

Service user

Workstation(running SWIFTAlliance

WebStation and a standard Browser)

Web Server andSWIFTNet Link*

Service provider

SWIFTNet Browse enables secure browser-based access (over SIPN) from an operator using a standard browser and SWIFTAlliance

WebStation to a service provider’s web server

SWIFTNet

* Typically used in conjunction with SWIFTAlliance Gateway

Slide 25

SWIFTNet Browse overviewSWIFTNet Browse transparently combines two communication mechanisms

Service user

Workstation Web Server +SNL

Service provider

SWIFTNet Browse allows to initiate InterAct or FileAct exchanges via a secure browser link. By doing so sensitive data can be exchanged with all the security

and reliability inherent to the SWIFTNet platform, while preserving the benefits of a browser-based environment.

SWIFTNet

HTTP-S

InterAct/FileAct

HTTP-S channel only authenticates the system of the end user

Using non-managed Web certificates

InterAct / FileAct channel authenticates

the end userUsing managed SWIFTNet PKI certificates

Slide 26

Key characteristics of SWIFTNet Browse (when used with SWIFTNet InterAct/FileAct)

Highly secure Highly secure & reliable& reliable

Highly secure Highly secure & reliable& reliable

Integration with SWIFTNet InterAct / FileAct for security sensitive data

HTTP-S exchanges secured with web-certificates for non-sensitive / un-structured exchanges

Closed User Group control SIPN

Standard Standard technologiestechnologies

Standard Standard technologiestechnologies

Client uses standard browser to navigate HTTP-S for screens and InterAct for transactions or

FileAct for file transfers

Re-utilisation of existing SWIFTNet infrastructureSingle Single

WindowWindowSingle Single

WindowWindow

Thin clientThin clientThin clientThin client Service provider does not install software at

client side

Slide 27


SWIFTNet InterAct

SWIFTNet FileAct

SWIFTNet messaging

Messaging

File transfer


Secure, reliable, and flexible. Appropriate for exchange of batches of structured financial messages and large reports.


SWIFTNet Browse

Slide 28

Real-time query &

response

SWIFTNet InterAct is used in Real-time mode query & response

SWIFTNet InterAct Q& R: real-time exchange of information XML messages for SWIFTNet InterAct: Cash Management Standards Access to the SSP (mandatory and optional modules) through

SWIFTNet InterAct:

– Payments queue management

– Liquidity management

– Management of reservation and limits

– etc…

Used either in the context of person-to-application solutions (with SAB) or application-to-application (with SAG)

Slide 29

Key characteristics of SWIFTNet InterAct

Highly Highly securesecureHighly Highly securesecure

Secured with SWIFTNet PKI (managed certificates) Encryption, authentication and integrity control Non-repudiation Closed user group control SIPN

Highly Highly reliablereliableHighly Highly reliablereliable

Highly available operations Store-and-forward (not planned in T2) Delivery notification (not planned in T2)

Message validation (not planned in T2) XML-based

STP STP orientedoriented

STP STP orientedoriented

Short messages (max 100 K; recommended < 20 K for RT) Higher priority vs. SWIFTNet FileAct Flexible central routing Real-time messaging requires 64K lines minimum

OtherOtherOtherOther

Slide 30

The SWIFT XML Cash Management standards AdviceStatementGetAccount & ReturnAccountGetTransaction & ReturnTransaction ModifyTransaction CancelTransaction GetLimit & Return Limit ModifyLimit DeleteLimitGetReservation & ReturnReservationModifyReservationDeleteReservationGetMember & ReturnMember ModifyMember GetBusinessDayInformation & ReturnBusinessDayInformationGetCurrencyExchangeRate & ReturnCurrencyExchangeRateGetGeneralBusinessInformation & ReturnGeneralBusinessInformationLiquidityCreditTransferLiquidityDebitTransferBackUpPaymentModifyStandingOrder Receipt

21messages

21messages

Slide 31


SWIFTNet InterAct

SWIFTNet FileAct

SWIFTNet messaging

Messaging

File transfer


Secure, reliable, and flexible. Appropriate for exchange of batches of structured financial messages and large reports


SWIFTNet Browse

Slide 32

Real-time file download

SWIFTNet FileAct is used in real-time and store-and-forward mode

Typically used to reach a large number of counterparties

Store-and-forward file

transfer

Typically used in the context of person-to-application solutions (with SWIFTNet Browse)

Access to the SSP via ICM through SWIFTNet FileAct:

– Reporting

– Directory distribution Used in store & forward mode by Target2 as sender of files (TARGET2

Directory updates) Used by TARGET2 participants to pull files ( TARGET2 directory)

Slide 33

Key characteristics of SWIFTNet FileAct

Any file content (structure and character set) Files size up to 250 MbFlexibleFlexibleFlexibleFlexible

Highly Highly securesecureHighly Highly securesecure

Secured with SWIFTNet PKI (managed certificates) Encryption, authentication and integrity control Non-repudiation Closed user group control SIPN

Highly Highly reliablereliableHighly Highly reliablereliable

Highly available operations Store-and-forward Delivery notification Highly reliable file transfer protocol

Lower priority vs. SWIFTNet InterAct / SWIFTNet FIN Flexible central routing Real-time file transfer requires 64K lines minimumOtherOtherOtherOther

Slide 34

Agenda






Slide 35

Two different technical modes for using Information and Control module (ICM)

Application-to-application mode– Information and messages will be

transferred between the SSP and the individual participants’ internal application.

– Therefore the participant must:– Develop its own application– Adapt an existing application or– Purchase an appropriate

solution

User-to-application mode– The objective is to permit

direct communication between a participant’s users and ICM.

– The information is displayed in a browser running on a PC system (SWIFTAlliance Webstation)

– Participants do not need to develop a special application.

Application-to-application User-to-application

SWIFTNet InterAct

SWIFTNet FileAct

SWIFTNet InterAct

SWIFTNet Browse

(SWIFTNet FileAct)

Slide 36

Possible interface for accessing TARGET2

User-to-Application

Application-to- Application

Any user *

SAA/Eusers

- SWIFTAlliance WebStation- SWIFTAlliance Gateway WebStation concentration

SWIFTAlliance Gateway Single Window

SWIFTAlliance Starter Set

ICM access mode

ICM user profile

* Assumption: user is already SWIFTNet FIN user

Slide 37

SWIFTAlliance Starter SetEnabling the single window

SWIFTAlliance Entry

or Access

FileActInterAct Browse

SWIFT Alliance Starter Set: opens the entire single window for you

Customersolutions

SWIFTNet FIN

Marketinfrastructures

Businesssolutions

SWIFTNet FIN

SWIFTNet Link

FileAct

Businesssolutions

Browse

Customersolutions

InterAct *

Marketinfrastructures

SWIFTNet

SWIFTAlliance Starter Set

File transfer

GUI

SWIFTNet Link

SWIFTNet

* when used in conjunction with SWIFTNet Browse

Slide 38

SWIFTAlliance Starter SetSWIFTAlliance Starter Set A software that leverages the

SAE/SAA platform to provide out-of-the-box file transfer and browsing capabilities

Features

– SAS, SAA/SAE & SNL run on the same system

– Allows one concurrent operator (SAB)

– SAS is available on Windows and AIX/Solaris

– SAS include the SAB software Connectivity

– Connectivity Pack 1 to 5

[RA]

SAA/E

SABSAB

[RA]

Browse/InterAct & Manual files

Modem

SAS

Slide 39

SWIFTAlliance GatewaySWIFTAlliance GatewayWebStation ConcentrationWebStation Concentration

SABSAB

FIN interface

Limited SAG licence allowing for SAB concentration

License includes 5 concurrent users and 1 SAB Base license

SAB on the corporate desktop Upgrade to more concurrent

users:– 5->10– 5->20

Connectivity Pack 2 to 5

[RA]

[RA]

SAG

SABSABSABSAB

[RA] [RA]

Browse/InterAct &Manual files

Slide 40

SWIFTAlliance Gateway SWIFTAlliance Gateway Single WindowSingle Window

The ‘typical’ SAG Licence License price based on traffic License includes one Host Adapter

(RAHA or MQHA) + one Agent (FTA or TDA), 5 concurrent users and 1 SAB Base license

Upgrade of Agents & Host Adapters possible, price depending on traffic tier

Value added versus SAG automation

– Full SWIFTNet concentrator

– SAG in the DMZ

– Scalability, resource optimisation

– Resilience

Connectivity

– Connectivity Pack 2 to 5

DMZ

SAG

FIN Interface

FIN Interface

SABSABCLS gateway

CLS gateway

RAMQ RA [RA]

Browse, InterAct & FileActfor any services

Slide 41

SWIFTAlliance Gateway – Licensing & pricing ‘An easy step approach’

Profile 1 :“WebStation Concentration”

Benefits :-Flexible SAB deployment-From 5 till 320 concurrent users

Price :Starts at €7,992(incl SAB Base license + 5 users)YMF: €3,477

Profile 2 :“Automation “

Benefits :-Off-the-shelf application integration using Agents(FTA or TDA for < 200 InterAct or FileAct per day)-Flexible SAB deployment-From 1 till 320 concurrent users

Price :Starts at €13,320(incl SAB Base license, 1 user, 1 Agent)

YMF: €3,402

Profile 3:“Single Window”

Benefits :-Can reside in DMZ-Scalability & resource optimisation-Resilience -Off-the-shelf application integration using Agents(FTA or TDA) and Host Adapters (RAHA or MQHA)-Flexible SAB deployment-From 5 till 320 concurrent users

Price:Starts at €26,434 depending on traffic license(incl SAB Base license, 5 users, 1 Agent, 1 Host Adapter)YMF: €6,025

SWIFTAllianceStarter Set

Benefits :-FileAct out-of-the box, manual-1 concurrent user

Price :€3893 (incl SAB Base license + 1 user)YMF: €1,516

€4,099

€5,328

€13,114

EUR prices are based on SWIFT 2005 budgeted reference rate (1.22)

Slide 42

Application-to-Application to ICM

Messaging Services

SWIFTNet InterAct

SWIFTNet FileAct

Recommended interfaces

Vendor application SAG Single Window

In-house application SAG Single Window + Developer Tool-kit

Accessing the Payments Module

Messaging Services

SWIFT FIN

SWIFTNet FIN Copy

Recommended Interfaces

SWIFTAlliance Access /Entry

User-to-Application to ICM

Messaging Services

SWIFTNet Browse

SWIFTNet InterAct

SWIFTNet FileAct

Recommended interfaces

SAA/E users SAS

Others SAB

Option: SAG WebStation Concentrator

SWIFTAlliance offering for TARGET2

Slide 43

Agenda






Slide 44

Migration Timeline : example in case of going Live Date in November 2007

P r e p a r a t i o n

2006 2007 20082005

Installation

Testing

Ordering

Live

M1Ordering and

Service Subscription

M2

Installation & configuration M3

Start T2 test

Planning

Design

M4Start T2 Live

Slide 45

Project Definition and Preparation: Appoint a project team Read TARGET2 technical documentation Select access mode (DP/IP) Identify requirements to implement Target2 Upgrade your connection with your local

Network Provider (swift.com – Partners – Network Partners) if applicable

Line provisioning / Installation

Slide 46

Ordering : Software ordering and Service Subscription

If not yet done, register to swift.com online services Order additional software (SAB/SAG/SAS) or

upgrade with SWIFT (swift.com – Support – ordering)

Software delivery Complete and submit the e-MSSF by indicating single or

multiple service subscription (swift.com – Support – ordering-Target2 specific MSSF)

Complete 1 e-MSSF for Target2 Testing and 1 e-MSSF for Target2 Live

Milestone1 (M1) to be completed by April 2007

Slide 47

SWIFT.COM

Tracking - Monitoring

TARGET2 form

Validation

NCB Service Administrator

Approval page

Approval page

Implementation

22

11

33

44

55

66

77

Customer

Reporting sheet

TARGET2 Service subscription (Life cycle)

Slide 48

Installation and configurationMilestone2 (M2) to be completed before May 2007

Perform your interface upgrade and install additional software or contact a SWIFT Business Partner (swift.com – Partners – Business Partners)

Install the FIN Copy Patch available on swift.com Download Center (swift.com – Support– Download Center) for non-SWIFT interface users please contact your Interface vendor

Upgrade your interface to enable pre-agreed MAC mechanism by installing patch (swift.com – Support– Download Center)

Configure your SWIFTNet interface

Slide 49

Testing

Exchange keys with Test Target2 CID (TRGTXEP0) Activation of Target2 services in Test mode Start testing according to the test cases/scenarios as prepared by

ESCB and your NCB

Milestone3 (M3) at start of test wave: May 2007

SSPdevelopment

CB’sAcceptanceTesting

Free Testing activities

Connectivity

Testing

Certification activities

Inter-operability Testing

CountryTesting

BusinessDayTesting

Activitiesin the Productionenvironment

TARGET2 User Testing

Slide 50

Live

Exchange keys with Test TARGET2 CID (TRGTXEPM)

Activation of TARGET2 services in Live mode Start testing according to the test

cases/scenarios as prepared by ESCB and your NCB

Milestone4 (M4) at start of Live wave: November 2007

Slide 51

Where to find help ?

Detailed readiness information is

available please consult the

‘Getting Started’ document (www.swift.com – Products and Services – Market Infrastructures – TARGET2)

Please also consult the TARGET2 website (https://target2.ecb.int )

Contact your National Central Bank www.swift.com:

– Contact details of Network Providers, Business Partners

– SWIFT Customer Service Centers

– SWIFT on-line support and Frequently Asked Questions (FAQ’s)

– Updates on vendor initiatives, activities and status

Slide 52

Migrate smoothly to TARGET2 with SWIFT Training

Two different modules according to your role and requirements: Business overview of TARGET2 Technical infrastructure and file transfer

Complemented with technical training courses on the

SWIFTAlliance interfaces Available as of October 2005 Courses scheduled according to the country migration window

Objective : receive technical background information to enable

a smooth migration and implementation www.swift.com/training

Slide 53


■ TARGET today – the need to evolve ■ Scope and framework of TARGET2 including an overview of the SSP

■ Overview of the services offered by the SSP

■ SWIFT's services for TARGET2- SWIFTNet FIN, FIN Copy and CUG- SWIFTNet InterAct, FileAct and Browse

Module 1 – Business overview of TARGET2

Slide 54


The Secure IP Network, including resilient network access options for TARGET2 direct and indirect users The core SWIFTNet messaging services and their features: SWIFTNet InterAct, SWIFTNet FileAct, SWIFTNet Browse SWIFTNet security: layered security, PKI and SWIFTNet security officers FileAct on SWIFTAlliance WebStation: configuration, sending and receiving files FileAct on SWIFTAlliance Gateway: brief overview of FTA

Module 2 – Technical infrastructure and file transfer

Module 3 – Managing SWIFTAlliance Gateway

Module 4 – Managing SWIFTAlliance Starter Set (incl. WebStation)

Slide 55

TARGET2 migration milestones

2003 2004 2005 2006 2007

Customer migration process

Live

User testingGFS UDFS v1 UDFS v2

Definition phase

UDFS final

Book 4

Prepare

now

Order

services

Slide 56

SWIFT supports the migration to TARGET2

Ad-hoc participation of SWIFT to the migration task force

Your Relationship Manager add name & coordinates) is your single window to SWIFT

Your service partner (add name & coordinates) can advise you on the technical infrastructure

Slide 57 TARGET2_generic_v8.ppt

&&uestionsAnswers

Documents

Slide 1 TARGET2_generic_v8.ppt Name of speaker Title Institution Event name, location and date SWIFTNet for the Single Shared Platform