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Financial Technology

The Importance of SWIFT Connectivity in a Corporate Context There has been a noticeable acceleration in corporates accessing SWIFT to communicate with banking partners globally. We look at some of the new initiatives under way that are enhancing the experience of SWIFT for these corporations.

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The Importance of SWIFT Connectivity in a Corporate Context

by Jon Ashton, Global Head of e-Channels, Barclays Corporate

Many of our multinational corporate clients are looking to leverage a secure and robust bank-neutral channel to help them to connect to multiple banks. As such we have seen a noticeable acceleration in corporates accessing SWIFT to communicate with banking partners globally. There are a number of new initiatives under way that are enhancing the experience of SWIFT for these corporations, and, with proven expertise and support available from banks such as Barclays, SWIFT has taken its place as a valid alternative to the proprietary connectivity tools provided by the major banks.

A commitment to service

As one of the pioneers in facilitating SWIFT connectivity for our corporate clients, we have built up a wealth of expertise to help our clients get the best from SWIFT.

SWIFT connectivity will continue to bring a strong value proposition in the future.

SWIFT connectivity can be complex and resource-intensive without the right expert support: in the early days of SWIFT Corporate Access, we formed a relationship with leading SWIFT service bureau SMA Financial, so that together, we could provide a cohesive SWIFT implementation, integration and rollout service to our clients. Following SMA’s acquisition by Bottomline Technologies in October 2010, we reconfirmed and strengthened this relationship to give our clients the quality of experience they can expect to receive, both during the initial implementation of SWIFT and on an ongoing basis.

Clients are not obliged to use Bottomline as their service bureau. Some companies prefer to connect directly, and therefore maintain SWIFT gateway software internally; however, working with a credible, experienced service bureau is often a key enabler of SWIFT connectivity for corporate clients who find it difficult to maintain tools and resources for SWIFT that may be outside the company’s core competences.

SWIFT in a corporate context

It remains the case that SWIFT connectivity is preferred by a number of large multinational corporations with a variety of global banking partners. Indeed, while these companies were seeking to reduce the number of banking partners before the financial crisis, often with a view to appointing a single global bank, this trend has shifted. We are now seeing that companies operating internationally prefer to appoint a panel of banks in order to manage their counterparty risk and benefit from best in class capabilities in each country or region. Consequently, SWIFT connectivity will continue to bring a strong value proposition in the future.

Although there are potential benefits to large domestic organisations, or smaller ones with fewer banks, particularly in the security and reliability of the service, at this stage the cost benefit is not compelling for smaller or single-banked organisations. These companies typically prefer our proprietary host-to-host or web-based systems, enabling them to benefit from seamless integration, and robust security and comprehensive functionality. While it is possible that these companies will consider SWIFT in the future, it is likely that the SWIFT service bureau model will need to develop further, and overall costs reduce further to create a realistic value proposition for smaller or large domestic companies.

Deriving indirect benefits: 3SKey

Although SWIFT is typically only adopted by a limited proportion of corporate users, the experiences of these users are indirectly bringing benefits to the wider corporate community. One such example is 3SKey, SWIFT’s personal digital identity initiative that is now live. This was originally conceived to address the needs of the French market where electronic signatures at a personal rather than organisational level are mandatory. Consequently, it was essential to develop this capability to enable SWIFT to be used in France. Corporations globally recognise the value of this facility and in addition to 3SKey being available through SWIFT, we are also seeing this functionality being rolled out to clients through banks’ proprietary web-based and host-to-host channels so that companies of all sizes can benefit.

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