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Breaking Down the Barriers to SWIFT

by Tino Kam, Head of Direct Channels for Global Transaction Services, The Royal Bank of Scotland

Once the preserve of large multinational corporations, SWIFT connectivity has become a viable option for corporate treasuries that are seeking to improve working capital management and reduce costs.

An increased awareness of counterparty risk and continuing efforts to improve working capital efficiency in order to reduce costs are combining to push SWIFT connectivity higher up the corporate treasurer’s agenda. At the same time, moves are being made by SWIFT and its member banks to open up the SWIFT network to a wider range of corporates.

The traditional obstacle to SWIFT use for all but the largest multinational corporations was cost – not only of joining the network but also of the messaging itself. However, innovations such as SWIFT’s entry-level Alliance Lite solution and free on-boarding options provided by service bureaux, such as that operated by RBS, have helped to substantially reduce the economic impact of SWIFT participation. The result is that today, around 30% of RBS’s host-to-host implementations are based on SWIFT’s FileAct and many more are in the pipeline. Moreover, many RFPs and RFIs submitted to financial institutions from the corporate sector are specifying SWIFT connectivity as a requirement.

Improving working capital efficiency

In providing a highly secure, robust and standardised single channel into multiple banks, SWIFT is an ideal solution for any corporate that is looking to improve the visibility of its funds globally or eliminate multiple proprietary electronic banking systems. These are key aims of corporate treasurers as they strive to improve working capital efficiency in order to free up funds that can be deployed in a more timely manner where and when needed across their operations.