01
Dec 2016

Does SWIFT Make Sense for me?

0

“Does SWIFT make sense for me?” This is a question many companies, including members of the BELLIN Community, haven’t found an answer to yet. We often come across treasurers who are unsure if a SWIFT Code for their company would be the best solution for them and their treasury. Misconceptions about SWIFT, for example, the allegedly high price and limited reach, are deep-rooted. Our experience however clearly shows that it pays to get your own SWIFT Code. Over 80 clients from Asia, Europe, and North America have already opted for the BELLIN SWIFT Service and use it in their companies all over the world. So let’s take a closer look at what has motivated them.

Workarounds never deliver a 100% solution

We don’t like giving up what we’re used to! That’s why some treasurers would rather attempt to modify the setup they have than try something new. Using EBICS for payments outside of EBICS countries (mainly DE and FR) is only a makeshift solution. EBICS technology was never meant to be used globally – but some companies still try and use it in all kinds of countries. This does work to some extent – but there are clear limits. Some of the (generally very heterogeneous) payment formats that are required for certain countries, for specific types of payments and for transmitting specific information, cannot be transferred to the target bank. Meanwhile, some messages cannot be received via EBICS. The consequence are tiresome, never-ending projects, and solutions that at best address 80% or 90% of the actual problem.

All group companies should be connected eventually

We all know that SWIFT also enables secure payments in more “exotic” countries: but what is exotic? Payments in Eastern Europe, Russia, and Ukraine currently pose a great challenge to banks. China, Japan, Latin America… “Difficult” countries are a dime a dozen! Most businesses, not just “global players,” have at least one such country in their portfolio. In order to meet the objective of integrating all payments from all group companies in one treasury platform, you also need to connect to the banks in these countries. What is the point of starting off with a customized solution, only to opt for SWIFT later on for the remaining banks? With a bit more foresight, SWIFT can enable a reliable, transparent, bank-independent and future-proof connection from the very start, saving time, money and manpower.

Considering the future in global banking communication

What will banking communication look like in 5 years? No one can really predict the answer to that question. What appears certain is that the technology-driven revolution that has created new opportunities for corporates and banks is unlikely to slow down anytime soon. Digital ways of transmitting not just payment but also other data to banks have become standard. For example, since 2015 we’ve been offering the possibility to open Letters of Credit and to exchange electronic deal confirmations for Money Market and FX deals via the BELLIN Matching Service. From there, it is a small leap to even more information exchange with banks. Having started with the collection of account statements worldwide, you could move on to exchanging confirmation messages via the same connection, use SWIFT for MT101 payments, for the opening of Letters of Credit or guarantees and finally for introducing ISO20022 messages via FileAct in all group companies – the icing on the cake.

Creating a SWIFT connection “basis” is the first and biggest step; from there on out, the mean cost per activity keeps dropping, given the many different possible uses. Isn’t this proof enough that SWIFT is indeed relevant for treasury? This is definitely something else you should bear in mind when making the decision whether or not to use SWIFT and when considering costs.

To date, over 80 businesses in the BELLIN Community have opted for the joint BELLIN/SWIFT solution – this represents more than 20% of all businesses in EMEA who’ve started using SWIFT in the last few years. Many BELLIN Community treasurers, as well as our experts who accompanied the standardized process, can provide first-hand accounts. So why not contact us and find out how you could profit from a SWIFT connection?

Add new comment

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
CAPTCHA

This question is for testing whether or not you are a human visitor and to prevent automated spam submissions.