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Moving Swiftly to SWIFT With the aftershocks (we hope) of the financial crisis still shaking many firms, budgets and resource constraints are still obvious reasons - or perhaps excuses - for postponing projects that could bring advantage to the organisation. One of the projects which is, by its nature, messy and complicated, is to review and enhance bank connectivity. Although the opportunities for corporates to connect with their banks through SWIFT are developing, with steady growth in corporate take-up, should we be seeing greater interest bearing in mind the potential advantages of SWIFT connectivity? In this third edition of TMI's SWIFT Connectivity Guide, we bring you case studies from new and familiar companies which illustrate the benefits, but also the challenges, of a SWIFT strategy for corporate-to-bank communication.

Moving Swiftly to SWIFT?

by Helen Sanders, Editor

“While we are postponing, life speeds by” (Seneca 5BC – 65AD). Project Seneca’s comment two thousand years forward, and many sage commentators (mainly journalists and my father) are still shaking their heads and bemoaning the pace of life. But with the aftershocks (we hope!) of the financial crisis still shaking many firms, budgets and resource constraints are still obvious reasons – or perhaps excuses - for postponing projects that could bring advantage to the organisation.

One of the projects which is, by its nature, messy and complicated, is to review and enhance bank connectivity. Although the opportunities for corporates to connect with their banks through SWIFT are developing, with steady growth in corporate take-up, should we be seeing greater interest bearing in mind the potential advantages of SWIFT connectivity? In this third edition of TMI’s SWIFT Connectivity Guide, we bring you case studies from new and familiar companies which illustrate the benefits, but also the challenges, of a SWIFT strategy for corporate-to-bank communication.

Looking at most of the data on SWIFT connectivity for corporates, treasurers interested in SWIFT are often regaled with statistics about the number of corporates connected, the regions in which they are headquartered etc. Bob Blair, Head of Channel Management, Asia, J.P. Morgan, summarises,

“There is evidence that SWIFT is now becoming more attractive to smaller companies. The giants such as Microsoft and GE were the early adopters. Furthermore, we see increased prevalence of SWIFT in Asia Pacific, with many existing SWIFT users in the region taking greater advantage of the opportunities it presents. What characterises these organisations is that they are generally large multinational corporations with a global footprint and are seeking to achieve global cash visibility. It is misleading to talk about SWIFT adoption in regional terms as its value proposition is in its global applicability.”

Opportunities for SWIFT corporate access

With corporate forum now an integral part of Sibos, the huge conference hosted by SWIFT each year, and a gradually increasing list of blue-chip client names, what is the attraction of SWIFT for corporate treasuries and payment factories? The first is security, with SWIFT providing undoubtedly the most secure, reliable messaging network in the industry. Second, and perhaps the most obvious advantage for corporates is the ability to replace multiple banking connections with a single channel. As Andy Mellor, Manager, Product Management, Fiserv explains,

Many corporations have multiple banking relationships, and therefore multiple proprietary banking solutions, with a replication of hardware, software, disaster recovery procedures, audit and security policies etc. The cost of connecting to each bank mounts up, so standardised communications look increasingly attractive.”

There are two elements to this: firstly, the channel through which financial messages are passed; and secondly, the format in which these are presented. With SWIFTNet now providing a single channel for corporate communication with their banks, and ISO 20022 standards for financial messaging enabling greater consistency of formatting, it appears that the tools for addressing communication challenges are available to corporates. We’ll come back to standardisation, but looking firstly at the SWIFT channel, the value proposition does not extend only to large corporates. As Andy Mellor, Fiserv explains, smaller organisations too can have complex connectivity needs,

“Despite efforts to rationalise the number of banks, even moderate-sized companies frequently need to maintain complex banking arrangements, particularly in the case of direct sourcing and increasingly intricate physical supply chains. This is driving greater interest in SWIFT, although there is still a great deal of untapped potential.”

Kurt Vandebroek, Product Manager, Connectivity, SunGard AvantGard also emphasises the diverse benefits of SWIFT connectivity for different types of corporates, particularly when using a a service bureau that provides a managed service,

“Centralised, managed connectivity benefits corporations in different ways, whether a large multinational organisation or a smaller company. When it comes to large multinationals, many still face enormous connectivity challenges with multiple access points with their banks. In contrast, smaller firms have different drivers, particularly the cost and resourcing required for connectivity. ASP solutions and managed services enable connectivity to be outsourced and by consuming software as a service, the cost structure is lowered.”

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