Published: September 19, 2011
While many large multinational corporations have been connected to their banking partners through SWIFTNet for a number of years, over the past year we have seen considerable new interest from mid-caps as well as large corporations. No longer the domain of the largest and most sophisticated corporations, SWIFTNet is now a viable and beneficial bank connectivity option, for single or multiple banks, both domestic and international flows. This article looks at some of the most recent trends and innovations in SWIFT connectivity for corporates, and why an increasing number of companies of all sizes and in all regions are seeking to benefit from BNP Paribas’ expertise in this area.
BNP Paribas has been a forerunner in promoting and facilitating SWIFT connectivity for our corporate clients. As a result of our long-term commitment to supporting our clients’ communication needs, BNP Paribas remains the 1st bank group worldwide in terms of number of SWIFTNet corporate customers. We are represented on the SWIFT board, participate actively in working groups and we are pioneers in adopting new standards in financial messaging.
We recognise that the right connectivity is simply a channel for financial messaging, and therefore to deliver the efficiency, control and liquidity management benefits that our corporate customers demand, connectivity needs to be part of a wider cash, treasury and payments optimisation project. Consequently, we first started to promote centralised payments in the 1990s using financial messaging standards such as EDIFACT, and we are now a global leader in setting up regional or global payment factories. We have now implemented payment factories and shared service centres worldwide, including SWIFT connectivity and the most recent ISO 20022 XML-based standards. Our clients are therefore benefiting from greater efficiency, visibility and control of their cash globally and across multiple banking partners, whilst reducing costs and standardising financial transactions and information flows across the business.
While large multinational corporations are typically early adopters of optimisation and efficiency innovations such as SWIFTNet, we wanted to extend the benefits to the wider corporate community. Consequently, we have been actively promoting SWIFT connectivity to mid-cap companies as well as large corporations, and we have seen particular interest amongst companies based in France, Belgium and Italy. To support the needs of these companies, we wanted to ensure that implementation was cost- and resource-effective, and could be completed quickly. Therefore, we have developed a ‘plug and play’ SWIFT connectivity capability, including embedded service bureau and member concentrator services. The take-up of this solution has already been substantial, and it is now in use at nearly 40 companies (out of our total number of SWIFTNet corporate customers). These companies expect both technical and implementation convenience, but also a high level of support from BNP Paribas throughout and beyond the implementation so that they can optimise their use of SWIFTNet as part of a wider cash, treasury and payments management strategy. To provide the right level of service to companies considering or implementing SWIFTNet, we have therefore established a dedicated implementation team to facilitate adoption, with a strong emphasis on post-implementation support as well as initial deployment.
Having connected to their banks using SWIFTNet, companies of all sizes are seeking to leverage their investment by extending the range of services and geographies that they are able to access. BNP Paribas is certified by SWIFT for the Bank Readiness programme*. We are now delivering services through our SWIFTNet solution across more than 30 countries, not only in Europe, North America, and the Gulf region but also in Asia, including China, India, Hong Kong and Singapore, with four more locations due to be added by the end of 2011, including Korea and Taiwan. While we see around 70% of traffic in Europe at present, volumes are increasing rapidly in Asia.
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3SKey
The range and depth of services available to corporate users of SWIFTNet is also expanding. The ability to add digital signatures to financial messages was an important development required by many corporates, particularly in countries such as France where digital signatures are a market requirement. To facilitate this enhancement, BNP Paribas has been a keen supporter of the pilot for 3SKey, SWIFT’s multi-bank personal digital identity solution. We have also become one of the first 3SKey distributors so that we are able to issue certificates to our customers. This solution can be used on the SWIFT network but also on proprietary networks or through web-based electronic banking systems, and allows corporates to sign financial messages and files sent to their banks using a single signing device. The 3SKey concept has been embraced enthusiastically by our customers, not only in France, but globally, and we have already implemented 3SKey in customers’ payment factories in Europe, and will soon do so in Asia.
Beyond cash
In addition to the security of financial messages, our customers are also seeking to leverage the SWIFT channel to access a wider variety of services. Initially, customers tend to use SWIFTNet for payments and account information, but they typically expand their usage over time. For example, while the ability to exchange deal confirmations through SWIFTNet is not new, we are gradually seeing higher take-up of this service. We are proactive in piloting additional capabilities, including exchanging trade instruments such as export letters of credit, guarantees and standby letters of credit through SWIFT which will prove a very valuable innovation for many companies operating internationally.
eBAM
Another key new development which our customers have been anticipating is eBAM (electronic bank account management) to enable corporates and their banks to exchange secure messages for opening, closing and maintaining bank accounts. Indeed, eBAM is a great opportunity for a corporate to improve at the same time the control and regulatory compliance on account management, and the rapidity and the security of exchanges with its banks.
We have been actively promoting SWIFT connectivity to mid-cap companies as well as large corporations.
The solution is now technically complete: ISO20022 XML eBAM messages, 3SKey certificate to digitally sign the instructions, and FileAct messaging specifications (header adaptations, management of documents etc.). We have been an active participant in the design since the start, drawing on advice and feedback from our customers and in testing the messages with two customers and software vendors, including digital signatures.
Today, the new challenge for eBAM is adoption. Corporates, software vendors and banks have a crucial role to play in the coming months. With this in mind we are now designing our customer solution with a panel of large international corporations to fit their needs.
While SWIFTNet has presented the opportunity for large multinationals to standardise, secure and enhance bank connectivity in the past, the potential now exists for companies of all sizes. With a variety of new opportunities in terms of both depth and breadth of services available through the SWIFT channel, we anticipate that adoption will accelerate further, fuelled by the availability of our plug and play SWIFT solution. Pierre Fersztand, Global Head of Cash Management at BNP Paribas will be presenting on SWIFT solutions for corporates at this year’s SIBOS event, and we remain committed to pioneering new innovations through SWIFT and representing our corporate customers in guiding the future development of SWIFTNet.
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