SWIFT Aims to Transform the Business of Corporate Banking

SWIFT has a bold ambition. As part of the SWIFT2020 strategy, it is aiming to become the preferred secure network for multi-banked corporates globally.

Since 2008, the number of corporate groups using SWIFT has more than tripled to over 1,400. The cooperative organisation now has a market share of around 45% of the Fortune Global 500.

"Typically, we are seen as a solution for large corporates only, which is a misconception," says Alain Raes, Chief Executive, EMEA and Asia Pacific, SWIFT. "We also offer small and medium enterprises tailor-made solutions and products. Around half of the corporates who have joined us since 2014 have a turnover of less than US$1 billion, and 37% have a turnover of less than $0.5 billion."

Raes shares that to meet growing demands of corporates, SWIFT will be enriching its current offerings to extend messaging solutions in payments, treasury, trade finance, securities and regulatory reporting.

"We also plan to grow relevant value-added services in the corporates segment by introducing BPO/TSU, 3SKey, SWIFTRef, MyStandards and Financial Crime Compliance Services," adds Raes.

Growing APAC market

To expand its global footprint, SWIFT is putting more emphasis on the growing APAC market. APAC represents a huge market of long standing, and often very well known, international corporates on one hand, and fast developing domestic or regional entities on the other.

"Both categories need to further streamline and automate their banking operations. We have already seen more than 16% year on year growth in new corporates joining SWIFT in APAC, but considering the size and potential of the region, I don't see any reason why this growth should not accelerate further."

Raes says SWIFT's implementation plan will be complemented by an industrialization effort across segments by improving bank readiness, increasing bank awareness within the banking community and further optimising SWIFT's on-boarding processes, with a dedicated corporate sales team in China, Hong Kong, Korea, Japan, Singapore, Australia and India.

Alliance Lite2

"We will also be promoting the use of SWIFT certified application providers integrating Alliance Lite2 to offer easier access for corporates to connect to SWIFT. There are currently ten providers connecting 70+ new corporates."

Alliance Lite2 is a prime example of how SWIFT is evolving its proposition in line with the shifting and growing role of the corporate treasurer.

Alliance Lite2 is a web-based solution designed for corporates with capabilities for straight-through processing and automation of financial process flows. It requires minimal infrastructure to maintain, low up-front costs, low monthly fees, and shorter implementation timelines.

"Going forward, we intend to enhance the features with an entry-level 'plug and play' functionality for treasurers to manage their multi-bank treasury and cash management operations, such as account balance dashboards, reporting and payment initiations," adds Raes.

While multiple banking relationships are generally a necessity in an age of increased cross-border activity, there is a rising popularity of RTCs and in-house banks in Asia.

"In the midst of this growing trend," says Raes, "corporates often find themselves needing to move liquidity rapidly between accounts. By using SWIFT, corporates can improve operational efficiency by implementing better workflow control, consolidating the financial transactions of their group companies and managing multiple banking partners."

Supporting the digital march

Trade digitization is perhaps the most challenging issue for the corporate community today, given the number of players involved in trade processes.

According to Andre Casterman, who heads up development in the corporate and trade markets, SWIFT offers an ideal platform through which to build capabilities in transaction services in treasury and trade.

"Trade finance services are being increasingly digitised through corporate-to-corporate hubs, new entrants (such as alternative finance providers) and SWIFT/International Chamber of Commerce (ICC) standards," he says.

"It's key for exporters to be able to provide a better service for their clients (importers) by avoiding the inefficiencies related to paper-based practices. Businesses want to move away from Letters of Credit.

"Information gets the world economy moving, but if the information is only on paper, you cannot perform big data analysis, you cannott profile the data and find patterns which help to identify trade-based money laundering. Banks must move digital in this space too in order to become more agile, attract more trade flows and increase their compliance with trade-specific regulatory requirements.

"To this end, we are partnering with a number of third party platforms, such as essDOCS, to help better digitize trade information flows in the corporate-to-corporate space. This is very transformative - there is a huge business opportunity for banks to finance more trade flows, and technology is the primary enabler."

Shining a guiding light

SWIFT's ambitious plans in the corporate space are supported by the Corporate Advisory Group, which plays a central role in terms of strategy and governance.

The group, comprised of e-commerce leaders from major transaction banks and the main global banks, including Citi, JP Morgan and HSBC, meets twice yearly and influences the direction of SWIFT's thinking.

Chair of the Corporate Advisory Group and SWIFT Board member Marcus Treacher explains: "Every member of the group runs corporate-facing banking units - so they know exactly what the corporate world wants, and needs."