Reshaping bank communication

SWIFT for corporates
Reshaping bank communication_HEADER
Karsten Kiefer author pictureAuthor: Karsten Kiefer

Forty years ago air conditioning was a feature of luxury cars. Today it comes standard on almost anything with wheels.  This same standardization is about to happen with the SWIFT network – its transformative effects on global bank communication, once limited to the only most high powered companies, now available to nearly anyone. With SWIFTs latest push to expand the SWIFT network to a broader selection of corporations, they have made it substantially easier for your company to obtain their own Business Identifier Codes (BIC). This has made it easier than ever for you to start exchanging messages over SWIFT.

The expansion of SWIFT

The SWIFT network was originally bank-exclusive, and then for some time they provided access to corporates through service bureaus (or if you were very wealthy: individual SWIFT terminals). But in recent years SWIFT has pushed very hard to expand the SWIFT Standardized Corporate Environment (SCORE) network, allowing more and more corporates to pull account statements from the SWIFT network into their central treasury.

Under this new system each corporation is provided with a BIC which acts like a mailbox in which banks can deposit account statements for the corporation. This provides companies with access to the same infrastructure as banks, and with the correct SWIFT service, lets them write their SWIFT account statements directly into their treasury system.

The big advantage of a dedicated BIC is that it belongs to the client and all information that goes through it remains private. For example, if your account information were going through a shared BIC, it’s owner (say, your bank) could, in theory, derive your complete financial situation from the account statements delivered through it.

Another advantage is that it permits you to be bank agnostic: a company with their own BIC does not have to commit to one specific main bank (an advantage in today’s banking environment). And finally, once integrated with the treasury, the SWIFT infrastructure can be easily used for other functions, such as the routing of all payment processing through a single channel or trade finance integration.

Of course, not everything is sunshine and lollipops. Once you get your BIC, you can theoretically reach every bank on the SWIFT networkright? But not every bank supports SWIFT for Corporates. Until recently, smaller institutions, local ones in particular, did not have access to the SWIFT Standardised Corporate Environment (SCORE), which means they could not send messages directly to corporate clients.

BELLIN has been working actively with SWIFT to improve the networks rules and as of 2015, direct communication with the SCORE network has become much easier for smaller banks.

Getting on board with BELLIN and SWIFT

Understanding your bank relationships – not to mention the controls, regulations, and institution specific problems with setting up bank communication – can make it difficult for many clients to make it onto the SWIFT system. This is one of the reasons why we’ve been working with SWIFT to develop the BELLIN SWIFT Service: it gives us the ability to simplify the processfor corporates who might otherwise not have the knowledge to effectively utilize the SWIFT network.

For many companies international growth has come through acquisitions or other organic processes, which have left their banking relationships without a meaningful structure. When onboarding we usually receive a list of existing bank connections, then analyze how the bank portfolio can be best arranged. Depending on which continents, countries, at what volumes a company is active and so on, we can make individualized recommendations about how to organize accounts.

After this we begin the technical onboarding process – from initial “mailbox” setup to the exchange of SWIFT messages –which normally takes no more than 40 business days. At this point, the connection has been configured and the client can receive account statements.

Finally, you need to find the right people at your banks to set up your accounts to send statements to your new BIC. We help by providing standard letters that our clients can send to their banks. How quickly banks flip the switch varies by bank: sometimes overnight, sometimes after several weeks.

With all of this, it’s quite possible for your company to be able to achieve complete global cash visibility in under 3 months.

Between the ease of onboarding through companies like BELLIN, and the new drive by SWIFT to open up the SCORE network to a broader selection of corporations, SWIFT access is easier than ever. Getting ones own BIC and connecting to ones banks – even smaller local banks – is now totally achievable, even for medium sized businesses. Soon, a corporation without a BIC may seem as unusual and Luddite as a car without air conditioning – even if it did take Volkswagon 30 years to add it to the beetle.

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