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Setting the Standard for SWIFT Connectivity

by Ben Poole, Financial Journalist, with contributions from Marcus Treacher, Global Head of GTB Client Experience/GTB eChannels, Global Transaction Banking, HSBC and Ian Bryant, Head of Client Integration Consulting, HSBC

With a number of connection methods offered by a variety of institutions, SWIFT for Corporates is more accessible than ever. What are the main factors corporates should weigh up when considering SWIFT connectivity, and how can they best overcome the challenges of implementation?

Choosing a bank provider

As there is a standard method behind SWIFT for Corporates, which is defined by SWIFT themselves in their terms and conditions, the method itself is not the area that corporates should be concentrating on when thinking about implementation. Instead, value can be found by focusing on the quality of the bank the corporate is dealing with, and the ability of that bank to get SWIFT operating for them. A basic initial checklist should include questions such as:

• Does the bank have good connection standards?

• Does the bank cover standards such as XML ISO 20022?

• Can the bank support the full range of SWIFT messages available to corporates via SWIFT connectivity?

• Are there any gaps in the bank’s legal terms and conditions?

• What kind of coverage does the bank provide?

• What service quality does the bank have?

While large banks with a global footprint, such as HSBC, can provide positive answers to the above points, in the industry as a whole there are still many variables in this regard. This is why key industry players have been working on self-certification in an attempt to make things clearer for potential corporate clients. Marcus Treacher, Global Head of Client experience at HSBC, is Chairman of the Corporate Advisory Group at SWIFT. “We came up with a policy of certification, because we had corporates complaining that, depending on the bank they dealt with, they either had a full range of SWIFT services and implementation was good, or they had a very different experience,” Treacher explains. The Corporate Advisory Group responded by encouraging banks to self-certify at one of two levels. Level one certifies that the bank can do the basics, while level two covers the basics and also the bank’s ability to provide value added services. The corporate section of the SWIFT website lists the banks who have self-certified, and is a good reference point for treasurers.

Implementing SWIFT for Corporates

If a corporate decides to go directly through a bank to access SWIFT, how does the implementation process unfold? Taking HSBC as an example, Treacher notes that they start with the business problem that the corporate has, and then work with the client to create the best transaction banking solution to enable them to get where they need to. “In that thinking process, the decision on using SWIFT and then the method of connecting to SWIFT, comes quite a long way down in the thinking process,” says Treacher.

The most important thing for the corporate and bank to establish first is which transaction services are needed, covering which high value and low value clearing solutions, and on what level of quality. The most efficient way of connecting is then looked at - does the corporate run an industry-standard enterprise management package such as SAP and Oracle Financials, and if so is there a need to connect directly to the corporate’s SAP or Oracle? If the corporate treasury department is dispersed around the world, there may be a need for the bank to work with its client to help bind these units together more tightly. Following this, the actual terms of the messages that are to be transferred between bank and client need to be understood. “If they’re choosing HSBC along with a small number of other global banks, they would need to feel comfortable that we can all speak the same language,” says Treacher.

SWIFT is a very good solution for anyone who physically wants to cable up with more than one bank. But it is important for banks to have the conversation about SWIFT for Corporates as part of an overall detailed project discussion with a client.

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