by Martin Bina, Treasury Operations Manager, EMEA, Caterpillar Inc.
Caterpillar first selected SWIFTNet for bank connectivity in 2007, and was one of the early corporate adopters of SWIFT Corporate Access under the SCORE (Standard Corporate Environment) model. In this article, Martin Bina, EMEA Treasury Operations Manager at Caterpillar discusses the company’s experiences to date. Before implementing SWIFT, Caterpillar had various arrangements for communicating with its banking partners in its six treasury centres, and proprietary tools for accounts payable at business unit level. In the European treasury centre, for example, we used our main cash bank’s multi-bank platform through which our key banks reported. Our main cash bank also acted as a third party payment agent for treasury payments. While this arrangement worked very successfully, we recognised the need to establish a standard approach to connectivity across the business, including both treasury and accounts payable. We were building a financial shared service centre for accounts payable, to create a common processing environment both for existing business units and new entities brought into the company through acquisition, and it was relevant to consider SWIFT as a component within the standardised, common infrastructure.
Caterpillar’s connectivity objectives can be summarised by ‘three S’s’: Simple; Standard and Secure. SWIFT connectivity was the logical and obvious choice to achieve these three goals, with the introduction of the SCORE (Standardised Corporate Environment) model in 2007 as the catalyst. We had been familiar with SWIFT Corporate Access for some time, but the value proposition for Caterpillar had been unclear: we did not have the trading volume to justify accessing SWIFT for confirmations (TRCO – Treasury Counterparty model) and MA-CUGs (member administered closed user groups) were too complex. SCORE appeared to be more straightforward and standardised, so we decided to look more closely at the opportunity that SWIFT presented. We recognised that not only would we be able to connect easily to our treasury management system (TMS) but also to our ERP as part of our global roll-out, enabling ‘plug and play’ access to key banking partners.
We recognised the need to establish a standard approach to connectivity across the business, including both treasury and accounts payable.
First steps to SWIFT connectivity
We first approached our primary cash bank to discuss our potential SWIFT project, and found them extremely supportive. We did a great deal of the preparation work with the bank team, and essentially worked with them as consultants on the project. Once we had decided to proceed, we approached the top ten to twelve of our major banks to ascertain their willingness to connect through SWIFT, and which formats they supported, with a view to using ISO 20022 standards wherever possible. We had mixed responses, with one bank not yet supporting SCORE, although they have since joined. However, despite varying levels of experience with SWIFT Corporate Access, we found that most were progressive and responsive.
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