SWIFT for Corporates: a Single Gateway to the Financial Industry

From Shanghai to São Paulo, SWIFT offers a compelling business case for corporates

by Luc Meurant, Head of Corporate Access Programme, SWIFT

In today’s financial landscape, corporate treasurers are faced with a growing number of challenges including increased pressure on cost and working capital, need for tighter control, globalisation, more stringent compliance and acquisitions. To help corporates navigate through this operational dilemma, optimise global visibility and control over cashflows and better manage risk, SWIFT together with the financial community provides a solution.

Alliance Lite allows both manual and automated operations and is cost effective and easy to use - allowing corporates to connect to SWIFT from anywhere using standard internet browser.

‘SWIFT for corporates’ allows corporates to exchange financial information (payments, treasury and securities orders, reporting) with all their financial institutions through one single, highly secure, standardised communication platform, as opposed to using multiple connections. SWIFT’s internationally-recognised standards are helping corporates to reduce costs and risk, increase funds visibility and efficiency through improved automation, leading to easier regulatory compliance. By joining SWIFT, corporates can enjoy optimal access to over 8,200 financial institutions, in 208 countries.

Today, more than 300 corporations are connected to SWIFT and the number is increasing rapidly. These companies are seeing tangible return on investment and are bringing greater efficiency to their treasury operations. Business cases developed by companies such as Dupont, Iberia, Novartis, Petronas and T-Mobile have all highlighted Return on Investment (ROI) in the range of 120 to 400%.

What is significant is the wide scope and type of these corporates: they come in all shapes and sizes - from mid-sized companies with simple cash management structures dealing with a few banks locally, to large corporations deploying sophisticated payments and collections factories. There is a strong regional mix of companies which have made the decision to connect to SWIFT, including the recent introduction of Chinese and Latin American corporations, across a range of industries including chemicals, technology, transportation and retail. Recent additions include large multinationals such as Air France, Chevron, Ebay, Google, Nokia, Samsung, Siemens, Tesco, UPS and also - increasingly - mid-sized corporates such as Alten, Autostrade, Belcorp or Decathlon.

To encourage more corporations to connect to their banks through SWIFT and meet the needs of existing users, SWIFT is working with its community to evolve the corporate offering. [[[PAGE]]]

Four main areas are high on the agenda in the coming quarters:

1. Extension of services - For cash management, corporates can use SWIFT’s file-based messaging service - FileAct - for ACH transactions, direct debits, and salary payments, internationally and domestically. This file-based service is increasingly adopted by corporates and SWIFT expects this trend to continue with new - lower - pricing available since early 2008. Beyond treasury, cash management and securities messages already in use, additional services will be available by end 2008 in the areas of trade finance and exceptions & investigations.

2. ‘Lite’ connectivity options for smaller corporates - Corporates looking for a straight-forward and hassle-free way of connecting to SWIFT have a number of options, including using a service bureau. At the end of 2008, SWIFT will launch Alliance Lite, to provide further choice. Alliance Lite allows both manual and automated operations and is cost effective and easy to use - allowing corporates to connect to SWIFT from anywhere using a standard Internet browser.

3. More standardisation - The new SCORE-compliant Member Administered-Closed User Groups (MA-CUG) programme is available for corporates not eligible for SCORE. The programme is for banks, the compliant MA-CUGs for corporates. Banks can label their MA-CUG as ‘SCORE-compliant’ by adhering to SCORE usage rules and standards. Corporates who join these labelled MA-CUGs will enjoy the same level of standardisation as with SCORE. A rulebook is available for the XML-based ISO 20022 payment standards: these standards can be used to complement the FIN and domestic/proprietary formats currently handled. A standardised bank contract template is also available, to simplify corporates’ on-boarding of their additional banks. New standards for Bank Account Management will be available as of early 2009: they will cover account opening, mandate management and account closing. Finally, SWIFT is working with an expert group to address additional standardisation requirements for personal digital signatures.

4. Back-office integration with vendors’ applications - In support of Enterprise Resource Planning (ERP), treasury workstation and payment factory applications vendors, SWIFT has launched a label programme to certify vendor applications in cash management and treasury management. To date, four vendors are labelled. Support of vendor commercialisation efforts for their SWIFTNet integration solutions will also be a priority. Examples include SAP, which is now live with its SWIFT solution in Europe and in the US, Reuters, SunGard, Wall Street Systems and XRT.

Engaging with corporates

SWIFT will continue to partner with local treasury associations and publications and exhibit at major industry events around the world including Association for Financial Professionals (AFP), EuroFinance, Treasury Management International (TMI), Treasury Today, Treasury Strategies, Universwiftnet and many others. Help from banks, vendors and consultants with more dedicated ‘SWIFT for corporates’ days will continue to be valuable outlets to help customers understand the value proposition of SWIFT and share best practice with peers.

The enthusiasm from corporates, financial institutions and vendors tells us we are delivering on our promise. With adoption figures on the rise and a financial community eager to help corporate treasurers navigate through this challenging financial environment, SWIFT for corporates offers a compelling business case for corporate treasurers.