Financial Technology

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Key Considerations When Looking to Move to SWIFT As the internal processes of businesses become more sophisticated and the options for connecting with bank systems more numerous, it is increasingly evident that the integration between the technology environments of corporates and banks is the weak link in the end-to-end processing of core financial transactions. No matter how detailed the information that is stored in a bank or corporate system, the information becomes worthless if it cannot be exchanged completely and consistently. Ian Bryant looks at how SWIFT connectivity can help to achieve outstanding corporate-bank communication, as well as other proven benefits and key considerations.

Key Considerations When Looking to Move to SWIFT

by Ian Bryant, Head of Client Integration Consulting, Global Transaction Banking, HSBC Bank plc 

As the internal processes of businesses become more sophisticated and the options for connecting with bank systems more numerous, it is increasingly evident that the integration between the technology environments of corporates and banks is the weak link in the end-to-end processing of core financial transactions. No matter how detailed the information that is stored in a bank or corporate system, the information becomes worthless if it cannot be exchanged completely and consistently.

SWIFT Corporate Access has gone from strength to strength in recent years, fuelled by both the global financial crisis and treasurers’ and finance managers’ continuing desire to streamline business processes. Before the crisis, there was a general inclination amongst corporate treasurers to rationalise banking partners, to increase cash management efficiency and mitigate the challenges of communicating with multiple banking partners. As awareness of counterparty risk has increased, this trend has shifted, with treasurers preferring to establish a strong, diverse banking panel with the financial strength, geographic reach and product richness to support the company’s cash and risk management objectives. Similarly, corporate treasurers and finance managers are seeking to reduce their reliance on banking partners so that they are able to adjust their banking relationships without technical impediments.

These trends have been instrumental in extending the appeal of SWIFT connectivity, not only amongst the largest multinationals that have been attracted to SWIFT in the past, but across a wider spectrum of organisations. With companies of all sizes seeking to extend their geographic reach, while anticipating and responding to changing economic conditions, many will have multi-banking requirements. This creates the question of how to integrate with these banks consistently and efficiently.

Increasingly, treasurers and finance managers are opting to access their banking partners through SWIFTNet, the financial messaging network used for communication across the banking community. According to SWIFT, the end of 2009 saw an increase in corporate users of over 30% from 2008, a trend which we have seen continuing during 2010.

Corporate treasurers and finance managers are seeking to reduce their reliance on banking partners so that they are able to adjust their banking relationships without technical impediments. 

Achieving outstanding corporate-bank connectivity is not just about harnessing the ever-changing and evolving techniques, standards and technologies, but increasingly relies on creating a superb experience for our clients who use these services — both as they transition to new methods and solutions, and their ongoing use thereafter. This demands a deep understanding of the needs, aspirations and working styles of our corporate clients so that effective and user-friendly solutions can be developed in a timely fashion. As we implement solutions around the world, we are increasingly working with corporates to create truly global connectivity services, knitting together treasury centres and shared service centres across several or all regions and using new innovations in global project management to deliver with consistently high quality worldwide.

For some time, bank-to-corporate integration has been a key focus for HSBC, SAP and SWIFT. Despite a broad range of integration solutions, each of the three organisations recognised that the existing integration capabilities could be enhanced. In particular, we wanted solutions that would work seamlessly with those of our customers and facilitate efficient processes both within and beyond our own organisations. While not all corporate banking customers use SWIFT to connect to their banks, HSBC recognised that SWIFT had become the industry standard for bank-to-bank and, increasingly, bank-to-corporate connectivity. SWIFT has an extensive footprint across corporate functions, such as cash management, trade, foreign exchange and asset management. 

HSBC therefore decided to work with SWIFT and SAP to develop a fully integrated environment for financial processing, with host-to-host or SWIFT connectivity embedded within the clients’ SAP environment.

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