by Wilco Dado, Head of Global Payments, RBS
When the Brussels-based financial messaging co-operative SWIFT opened its doors to the corporate community in 1997 (albeit in a very limited fashion), corporate interest in the network was slow to take off. However, adoption rates of the SWIFT for Corporates set of connectivity solutions in the past few years have been impressive, driven by the credit crunch and economic crisis. By the end of Q2 2010, 642 corporates had access to SWIFT’s network and between Q2 2009 and Q2 2010 corporate traffic had grown by 40.3%.
In the current economic climate, corporate treasurers are seeking to improve efficiencies and gain better visibility and control over their global cash positions at any time of the day and anywhere in the world. Increasingly, treasurers are also looking to centralise payments and receivables through automation and standardisation. Before the crisis, corporates were looking to concentrate services into one bank in order to achieve simplicity, now they are more likely to retain multiple banking relationships in order to be able to switch accounts if problems arise. SWIFT represents a non-proprietary, multi-bank solution that offers a secure channel for corporate-to-bank messaging.
For many corporates, SWIFT is an ideal solution for their cash management needs, but it is not the only solution and will not suit all companies. Moreover, there are many options for connecting via SWIFT that need to be considered.
A brief history of SWIFT and corporates
The opening up of SWIFT to the corporate community has not been without controversy – many of SWIFT’s financial institution members felt corporate access would disintermediate banks – if corporates could communicate with each other across the network they could perhaps cut financial institutions out of the loop. That is why corporate access has been developed in a measured way by SWIFT and its member banks. Even today, a significant number of banks still take a defensive approach towards offering corporate services through SWIFT.