Cash & Liquidity Management

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SWIFT Connectivity at ABB Treasury Since 2002, ABB has had a highly centralised treasury function within a relatively decentralised company. Group treasury is located in Zurich, Switzerland, with regional treasury centres in the US and Singapore. ABB recognised that accessing their banks via SWIFTNet would be beneficial, and made the decision earlier this year to connect to SWIFT, with the project initially focussing only on treasury payments, a crucial area for ABB. The decision was based primarily on security requirements, but ABB also recognised the potential to access other services from their banks through SWIFTNet in the future. The implementation of FINpayments through SWIFTNet has been a relatively straightforward process, with considerable support and advice coming from ABB’s service bureau BPP and from SWIFT. ABB went live with its first bank in October 2008 and will be live on the remaining two by year end.

SWIFT Connectivity at ABB Treasury

by Thomas Martin, Head of Operations & IT, ABB Group Treasury

ABB is a global leader in power and automation technologies that enable utility and industry customers to improve their performance while lowering environmental impact. ABB operates in more than 100 countries and has offices in 87 of those countries with 115,000 employees to give its global and local customers the support they need to develop and conduct their business successfully.

We recognised some time ago that accessing our banks via SWIFTNet would be beneficial to our business by replacing our systems with a single, secure channel.

Since 2002, ABB has had a highly centralised treasury function within a relatively decentralised company. Group Treasury is located in Zurich, Switzerland and we have regional treasury centres in the United States and Singapore. Our SWIFT connectivity project has initially been focused only on treasury payments (FIN - high value, urgent payments) rather than supplier/vendor payments, although this is a potential future development. Treasury payments are a crucial area for ABB, with over $300bn each year in payments originating from Group Treasury alone, plus payments initiated from our regional treasury centres.

Existing Payments Infrastructure

We currently use three proprietary e-banking solutions in Group Treasury, one of which is used on a multi-banking basis using MT101 forwarding. Our treasury management system (TMS), WallStreet Suite, produces different payment files that are then imported and approved within these payment systems. Although these applications adequately support our payment requirements, we wanted to implement a standardised approach to payment security. In reality, a company’s payment security is only as good as the weakest part in the payments process, which becomes more problematic when multiple systems are in place. We have been concerned that each of our e-banking solutions had different security tools. In addition, there is potentially a weak link between the file being released from our TMS and being uploaded into our e-banking systems where a file could be altered outside the security restrictions of the originating or receiving system.

The Decision for SWIFTNet

We recognised some time ago that accessing our banks via SWIFTNet would be beneficial to our business by replacing our systems with a single, secure channel, but it took a while to develop the business case. We made the decision to connect to SWIFT during the first quarter of 2008, based primarily on our security requirements but we also recognised the potential to access other services from our banks through SWIFTNet in the future, such as bank statements, confirmations and trade finance services (e.g. letters of credit and guarantees). Furthermore, the next release of our TMS will have full integration with SWIFTNet.

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