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A Decade of Corporate Access to SWIFT

by David Watson, Head of Client Access, Global Transaction Banking, Deutsche Bank and Leif Simon, Head of Client Systems Integration Product Management, Global Transaction Banking, Deutsche Bank

SWIFT’s decision to enable corporates to connect to SWIFTNet 10 years ago marked a major change in the way that companies exchange financial information with their banks, and the degree of standardisation, efficiency and integration that can be achieved. Some banks that are members of SWIFT were initially concerned that inviting non-financial institutions to communicate with their banking partners through SWIFTNet would erode their competitive advantage derived from their proprietary web-based or host-to-host electronic banking systems. Today, however, most forward-looking banks that place their clients’ needs at the heart of their business recognise that SWIFT connectivity is an important part of their client communication portfolio, particularly when it comes to serving the needs of larger, more complex organisations.

Supporting multi-bank connectivity

Today, around 800 corporations are registered with SWIFT; however, the ability to connect to multiple banks through SWIFTNet, a single, secure and robust channel, is still relatively new. Most corporates registered so far are large multinational corporations that have multiple banking partners globally. These organisations welcome the ability to connect to all of their banks through a single channel, reducing their reliance on individual banks and their systems. While many proprietary banking systems provide excellent automation, control and richness of data, it can be challenging to maintain a number of systems that have different integration requirements, file formats, and security controls.

Achieving bank neutrality, standardisation, industry-leading security and resilience were among the initial business drivers for corporates selecting SWIFT as their bank communication channel 10 years ago and continue to be the primary factors for corporates making their decisions today. However, the range of services from which corporates can benefit has developed since that time, and continues to evolve. For example, originally corporates typically exchanged FIN messages such as MT 101and 940 (payments and bank statements) primarily for treasury or other urgent payments. This practice inevitably limited the use of SWIFTNet to treasury, whilst other parts of the business that needed to exchange information with the bank, such as accounts payable, still needed to rely on proprietary bank technology. The introduction of FileAct, which provided an ’envelope’ into which any type of file or data can be included, provided significant momentum in corporates’ adoption of SWIFTNet as all types of payment, as well as other financial messaging, could be exchanged with banks through SWIFTNet.