SWIFT – Working with the Corporate Treasury Community

by Marc Delbaere, Head of Corporates and Supply Chain Markets, SWIFT

In this article Marc Delbaere, the newly appointed Head of Corporates and Supply Chain Markets at SWIFT, answers some key questions on the latest trends to affect corporates, including the advent of fintech companies, and explains how SWIFT can help multi-banked corporates with particular reference to the SWIFT for Corporates program.

What are some of the latest trends impacting corporates?

There is a lot going on in in the cash management industry. Overall, the business context remains complicated. First, you have low interest rates effectively putting pressure on easy returns especially as there is very little appetite for risk on the treasury. Then, as businesses grow internationally, you need to get familiar with an increasing number of regulations. On top of that, you need to cater for cyber-crime and effectively take the right cyber-security measures.

Of course, there are also ample opportunities: there is clearly a new wave of standardisation which is leading to innovation opportunities, new concepts like virtual accounts are emerging and are being picked-up on a very large scale, and new technologies like blockchain, while still at an early stage, also have a lot of potential.

The industry answer so far has been a keen desire for simplification. Most corporates have embraced a centralised and global approach to cash management, enabling a single, consolidated view into cash positions from multiple banking partners around the world. At the end of the day, corporates want to work as efficiently as possible with their banks and across networks using the latest tools and technologies.

How will the fintech eruption impact corporates?

First of all, it is clear that technology will play a critical role to move the industry forward. Some of this technology will come from established players or be assimilated by them very quickly while some might remain in the hands of disrupting fintech players. Technology is just one part of the equation. What will matter will be to be able to bring this technology to market with the right business models, the right customer reach and the right support for market regulation. Practically, this will require alliances and partnerships and the existing financial institutions are in a very good place for this. We at SWIFT believe that fintech represents a great opportunity for the industry. With programmes like the Innotribe Startup Challenge, we are helping bridge the gap between startups/entrepreneurs and the finance industry. Now, most institutions realise that partnerships with the right fintech provider could yield positive results.

If you look at trade finance for example, the potential for digitisation is immense and I expect quite a lot of innovation in this area in the coming years.

With that, we cannot discount the perceived fears and risks that are still associated with fintech. Some banks or institutions fear they may end up on the wrong side of a provider that is operating outside of the system – maybe being a little too disruptive for the greater good. However, many startups and established fintech providers seem to realise the benefit of working collaboratively with banks, corporates and financial institutions and for that matter, being part of the system. I also see the banking community opening itself up more to these partnerships, particularly as these new technologies get tested within the industry. Generally, most, if not all, are keen to incorporate new ideas into dated processes, especially if it enhances the end user experience.

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How can SWIFT help?

In short, we want to provide all the industry simplification we can for multi-banked corporates.

SWIFT’s primary focus is helping multi-banked corporates do business more efficiently, yielding lower costs and greater revenues. We look for areas that can benefit from standards and automation. Our goal is to make the user experience between corporates and their bank partners simpler and easier to manage. We help corporates seamlessly connect with their bank partners, we focus on messaging and develop standards, such as ISO 20022 to improve processes and communications, and provide an environment for corporates to test and prepare for onboarding with new bank partners or remain connected after upgrades to new treasury management systems.

Beyond messaging, we can help corporates fulfill the bank payment obligation for goods and services, ensuring a seamless commitment between corporates. Security is a big focus for SWIFT. We offer corporates a personal identity tool that enables a secure environment across all bank partners using one token, not one for each bank partner, which in some cases could be 10 or more banks. We’ve been focusing on security for corporates over the last several years now and will continue to do so going forward. Looking ahead, there is also the potential to address other challenges, such as timely and transparent payments, access to critical payments reference data, financial crime compliance tools and helping corporates meet regulatory reporting requirements.

SWIFT’s value-add is addressing common challenges in non-competitive areas where collaboration and a utility approach can mutualise costs across an entire community. We’ve seen this in other areas, namely with the KYC Registry, but there may be opportunities to extend the concept across other industry-wide challenges.

How has the SWIFT for Corporates program grown in the last few years?

The program is progressing at a fast and steady rate. For the last years, the reach has increased by over 15% a year, onboarding approximately 250 new corporates annually. Currently, there are about 1,600 corporates from around the world on SWIFT. These range from household names to small/middle market enterprises (SME) looking to expand their footprint into international markets. We will continue to grow and support this customer base globally. We will focus our efforts on all types of corporates – large and small, but may see more emphasis on small to mid-size. SMEs will be a core growth area for SWIFT, particularly as SMEs want to build a network of bank partners and/or expand their footprint internationally. With SWIFT, SMEs can access multiple bank partners over one connection and better support cross-border/international payments.

How do you see the SWIFT for Corporates program evolving over the next 12-24 months?

It is still early days for me in this new position, but the outlook is very promising. There are many ways SWIFT can contribute and continue to help the corporate treasury community. Efficiency and security will remain a top priority and focus for us. I also see many opportunities for greater collaboration across the community. There seems to be a niche market of non-competitive areas where the treasury management community can work together to mutualise costs and tackle critical common challenges.

As a neutral partner with experience in industry collaboration, SWIFT can bring great value to corporates, extending beyond connectivity and messaging services to other areas that could further reduce costs and risks, and offer community support for compliance and regulatory requirements. It is an exciting time for this space. I look forward to working with the corporate treasury community to evaluate the best use of new technologies and to identify different ways SWIFT can continue to help this community flourish and grow.