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The Third Movement in the SWIFT SCORE With market conditions changing daily, treasurers are caught in a whirlwind to ensure the business has the finance it needs, liquidity is maintained and that they have a firm handle on risk. Banks are changing the way that they assess the risk of their corporate customers, but are we doing the same with our banks? Disaster mitigation and recovery of all sorts has never been more important in treasury than today.

The Third Movement in the SWIFT SCORE

by Helen Sanders, Editor

With market conditions changing daily, treasurers are caught in a whirlwind to ensure the business has the finance it needs, liquidity is maintained and that they have a firm handle on risk. Banks are changing the way that they assess the risk of their corporate customers, but are we doing the same with our banks? Disaster mitigation and recovery of all sorts has never been more important in treasury than today, not least to ensure that we are working with the right banks and in the event that a bank is unable to process transactions for whatever reason, our business is not unduly affected. With so many pressing concerns, should the issue of bank connectivity be put aside until the market stabilises? Definitely not – in fact, the events which have dominated the headlines over recent weeks should elevate connectivity on treasurers’ list of priorities.

By using SWIFT, treasurers have a back-up solution in the event of business interruption of any sort.

Sibos this year was well attended by corporate treasurers, including those from companies already connected to SWIFT and those considering it. The first day of Sibos coincided with the fall of Lehmans but even then, no-one quite anticipated the level of contagion which would affect the market. Consequently, although unfolding market events were discussed at the plenary sessions, the SWIFT Corporate Forum, a two-day event within Sibos, was more focused on the operational benefits of SWIFT connectivity, including security, operational risk, efficiencies and the cost of maintaining technology. Only a few weeks on, I think that speakers would have a slightly different emphasis. Yes, these things are all important, and the panel discussions and case studies all presented a sound business case for SWIFT connectivity. Today, however, the business case is compelling not only at an operational level, but also at a strategic level. This is what I would refer to as the third movement for SWIFT connectivity. SWIFT’s first overture to corporates was a little halting and tentative with TR-CO and MA-CUGs. The second movement with the introduction of SCORE marked a crescendo but the pace of corporate take-up remained fairly andante. Sibos 2008 in Vienna was the start of the third movement. Looking ahead, I would expect to see a period of accelerating corporate take-up now that the business case has become more compelling than ever before.

Ensuring ‘Business as Usual’

I talked to Chris Furness, Managing Director – Transaction Banking at Standard Chartered who emphasises,

“During the current period of uncertainty, corporates need to have a disaster recovery plan in relation to their financial service providers. By using SWIFT, treasurers have a back-up solution in the event of business interruption of any sort. In the worst case, this could be the collapse of a financial partner; more likely, a service provider may not be in a position to process payments, in which case a company needs to be able to switch to another banking provider quickly to make payments to avoid damage to their own reputation."

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