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SWIFT Outsourced

by Graham Evans, Head of Treasury Operations, Nationwide

The primary role of Nationwide Building Society’s Treasury Division is to manage its liquidity portfolio, raise wholesale funding and manage interest rate risk positions as well as process payments, confirmations and settlements. We had been looking at joining SWIFT for a long time prior to finally going live in 2010, but it never made it to the top of our agenda. We had strong internal controls including over our third-party banking systems but as we are not a high volume payer, the numbers didn’t add up for us on a strict cost benefit analysis.

Nationwide is one of the world's largest mutual financial institutions.

So what made the difference? Nationwide is one of the world’s largest mutual financial institutions. It is a household name in the UK but less well known overseas. With a balance sheet in excess of $300bn it is a major player in the UK retail financial markets. The balance sheet is predominantly denominated in sterling which has meant that Nationwide can keep its cash management simple.

However the Treasury Division operates debt programmes in several currencies and a diversified investment and liquidity portfolio provide challenges you might see typically in a multinational company.

Our drivers for change came from a number of sources. We knew that SWIFT was the answer to some of the issues we were encountering with managing cashflows in all of our different currencies. After all if it works for banks why shouldn’t it work for us?

Project background

Nationwide is a BACS, FPS, Cheque and Credit Clearing member but it is not part of CHAPS, a direct member of Crest or CLS. We previously used a number of agent banks which offer proprietary systems for connectivity and these integrated with Openlink’s Findur core platform to produce the required 400 paper instructions each day.

Verification, keying and releasing the slips could mean 1,200 steps, with a staff of only 20 people some of whom had other responsibilities. You could say that because of this manual step we didn’t have any true straight-through processing (STP) but in practice, from the time transactions had been rekeyed our STP rates were in the 90-95% range.

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