Published: January 01, 2000
Society for Worldwide Interbank Financial Telecommunication (SWIFT) adoption is a common goal for many multinationals given the efficiency and flexibility achieved through the standardisation of corporate-to-bank communication channels. However, as SWIFT Corporate Access becomes ubiquitous among the world’s largest companies – over 1,100 firms use the platform – it is becoming increasingly important to differentiate between banks’ provision of SWIFT services.
At first glance, the idea of distinguishing between banks’ SWIFT capabilities seems unnecessary: the key attraction of SWIFT – in addition to its robust security and reliability – is that it facilitates bank interoperability rather than proprietary linkages. However, SWIFT is about much more than just access to a technology pipeline to transmit Financial Message Type (FIN MT) communication between corporates and banks. Companies need to work with a bank that has the experience, expertise and value-added functionality that will help enable them to achieve their goals. These criteria should be paramount when corporates fine tune their banking relationship selection process.
The benefits of choosing a bank experienced in SWIFT Corporate Access are self-evident. While thousands of banks around the world can claim to be able to send and receive FIN MT messages, only a few banks have practical experience of SWIFT implementation. Of those corporations using SWIFT, most have been implemented by a handful of banks – for example, approximately one third of all corporates on SWIFT are integrated with Bank of America Merrill Lynch.
Consequently, only a few banks can claim the ability to address the potential challenges that may arise during implementation, which can be a complex process. Those banks that have completed a large number of implementations may have greater credibility as a trusted advisor or consultant and often achieve greater success in conducting smooth implementations. Laurie McCulley, Partner, Treasury Strategies states, “In our work helping clients implement SWIFT, we know the difference a bank that’s operationally ready for SWIFT can make. Operational readiness can mean everything from the basics of bank technology infrastructure that supports SWIFT reporting and message transmission to SWIFT for Corporates documentation, a sales team that knows how to answer corporate questions about SWIFT connectivity and a dedicated implementation team to expedite the process. Choosing a bank which has a devoted team for SWIFT helps companies recognise the benefits of SWIFT connectivity much more quickly.”
The number of SWIFT Corporate Access implementations a bank has completed is a good indicator of a bank’s SWIFT experience, but it is not the only criterion that companies should use when selecting a SWIFT banking advisor.
SWIFT has introduced a Certification Programme for banks that includes a classroom-style forum led by SWIFT and a formal examination. Participants who pass the exam demonstrate that they have successfully assimilated the information acquired during SWIFT training courses or through on-the-job experience. The ‘Using SWIFT Certification Programme’ is role-based and focuses on the knowledge required for the specific role of ‘SWIFT for Corporates Specialist’.
While some banks face challenges due to limited experience of SWIFT implementations, SWIFT Certification helps assure a corporate that a bank’s staff have the required knowledge to help achieve the corporate’s SWIFT goals quickly and effectively, and minimise inconvenience and disruption during implementation.
Additionally, corporations can evaluate a bank’s SWIFT experience by assessing their involvement in industry workgroups which drive initiatives on critical topics. SWIFT standards continue to evolve and expand into new areas. Companies necessarily stand to benefit if they choose to work with a bank that is closely involved in industry dialogue, either through the ISO international standards organisation or with other industry groups. The current market interest in Electronic Bank Account Management (eBAM) has clearly highlighted the importance of collaboration in order to achieve success and advance technology.
One key industry group is the Common Global Implementation effort, which was established in 2009 by leading global banks. It was designed to spur co-operation among banks by creating a common global implementation standard for ISO 20022 messages for corporate-to-bank communications. Necessarily, those banks that contribute to groups such as this have greater experience and will be able to offer corporates a better and more informed SWIFT implementation.
Corporates should also seek out banks involved in corporate advisory groups. Increasingly, banks are working with global companies in forums that encourage an ongoing dialogue about SWIFT in order to accelerate innovation and improve corporates’ experience of working with SWIFT standards. Banks that support, sponsor and prioritise such initiatives are more likely to achieve best practices in client implementations and service delivery.
In recognition of corporates’ need to differentiate between bank providers for SWIFT services, SWIFT has recently introduced a bank readiness certification programme. Certification gives corporate customers an insight into the readiness of their banking partners, and allows them to take advantage of the benefits of their SWIFT connection.
Readiness is assessed based on a set of key criteria, some mandatory and some optional. The high-level mandatory criteria include participation in Standardised Corporate Environment (SCORE), the ability to receive FIN MT 101 and send FIN MT 940 and FIN MT 942 messages, and compliance with the FileAct Implementation Guide. Commercial criteria for certification include requirements to have trained sales staff and offer basic commercial documentation.
The readiness certification will help enable companies to clearly distinguish between those banks that simply support SWIFT standards and those that have experience of the implementation and testing processes. Readiness certification may also acknowledge banks’ ability to support new initiatives and technology that can benefit corporates.
One recent initiative is SWIFT MyStandards, which is a collaborative web-based platform designed to better manage standards and usage in the financial industry. Adoption of MyStandards may become important for bank readiness certification in the future and will help enable companies to ascertain which banks take a proactive approach to technology and work to anticipate technology upgrades that will benefit their clients.[[[PAGE]]]
Payment transactions generate huge volumes of data, which has the potential to transform corporations’ experience of SWIFT and the benefits they derive from the platform. Large volume data technology can use data management and analytics tools to make sense of unstructured data by improving the use of BIC and IBAN fields, for example, so that corporates minimise exceptions and improve their payment efficiency.
Another example, is as part of the testing process, Bank of America Merrill Lynch uses reference data to facilitate a smooth payments process and accurate regulatory reports. In addition to identification and validation of BICs and IBANs, this testing can also make it easier to identify and validate national bank codes, standing settlement instructions, SEPA routing information or other reference data.
It may be advantageous for corporates to choose to work with a bank that is proactively harnessing such information to enhance their client offering. An approach to data is not just about analytics but about a structured approach to enhance overall processing effectiveness with data that you can act upon. Choosing a partner with vision for today and tomorrow is critical as you look to harness this in your business. Consider keeping your priorities focused on deep experience, documented expertise in SWIFT implementation, leadership in industry forums, and broad commitment to technological excellence. Then you are well positioned to take advantage of the huge opportunities offered by SWIFT.
“Bank of America Merrill Lynch” is the marketing name for the global banking and global markets businesses of Bank of America Corporation.
Lending, derivatives and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp., both of which are registered as broker-dealers and members of FINRA and SIPC, and, in other jurisdictions, by locally registered entities. Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp. are registered as futures commission merchants with the CFTC and are members of the NFA. Ouvidoria Bank of America Merrill Lynch1 | DDG: 0800 886 2000 | e-mail: [email protected]
1 Bank of America Merrill Lynch Banco Múltiplo S.A. e Merrill Lynch S.A. Corretora de Títulos e Valores Mobiliários
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