8 SWIFT for Corporates Insights by SWIFT 6

As you can probably tell, I’ve been on a bit of a SWIFT for Corporates mission recently. The posts I’ve Got 99 Problems But SWIFT Connectivity Ain’t 1 and 10 Reasons Why SWIFT Connectivity Is Not a Magic Bullet have been extremely popular. Having completed these posts, I thought it would be interesting to revisit the key messages for corporates from the ‘SWIFT for Corporates’ session during the London SWIFT Business Forum held in April this year.

Check out the SWIFT for Corporates slideshare for the fancy pie charts and full details, but following are the key messages that corporates need to know:

1. Why are Corporates Implementing SWIFT?

  • To reduce the number of bank connectivity solutions
  • To enable straight through processing
  • To give corporates better and more timely access to data
  • To enable the implementation of industry data standards
  • To automate bank communications with multiple banks
  • To implement a bank connectivity solution that is ERP system and bank agnostic

2. Evolution of SWIFT for Corporates

  • In 2009 there were 579 corporates registered with SWIFT, in 2014 there are 1405
  • 43% of Fortune Global 500 companies use SWIFT, and an impressive 18 out of the top 25
  • Most corporates come from Europe (69%) with the remaining from the Americas (21%) and Asia Pacific (10%)
  • Corporates make up 12% of SWIFT membership

3. The Profile of Corporates using SWIFT

  • By annual turnover (USD), its still the biggest corporates that are using SWIFT – the bandings being:
    • <$ 1 billion – 42%
    • $1 – 10 billion – 30%
    • >10 billion – 28%
  • The number of bank relationships is pretty evenly split at about 25% across the following: 1-5, 6-10, 11-20, >21

4. SWIFT for Corporates – FIN Traffic

  • Most of the corporate/bank FIN traffic is received by corporates (83%), and 17% is corporate to bank
  • Of the FIN traffic:
    • Corporates send to bank, the most popular message type are MT101 (43%), MT103 (34%) and MT300 (10%)
      • Basically, your wire payments!
    • Corporates receive from their banks, the most popular are MT940 (50%), MT942 (27%) and MT900 (8.5%)
      • In short, bank statements!

5. SWIFT for Corporates – FileAct Traffic

  • Most of the corporate/bank FileAct traffic is received by corporates (72%), and 28% is corporate to bank
  • SWIFT don’t indicate the details of these FileAct transmissions – I suppose they don’t know, they just deliver on behalf of the banks & corporates . Although the request type information may offer some interesting clues about the file information type

6. SWIFT Connectivity Options

  • Hosting the SWIFT connectivity infrastructure in-house
  • Partnering with a SWIFT Service Bureau
  • Utilising the SWIFT cloud based connectivity solution, Alliance Lite2

7. The SWIFT for Corporate “Suite”

I don’t want to do a SWIFT sales pitch, I will leave that to SWIFT! But the point I want to make is that they are getting into additional business flows – beyond the traditional payments and cash management. Most notably foreign exchange, trade finance, supply chain finance, regulatory requirements and Electronic Bank Account Management (EBAM).

SWIFT are also trying to make corporate ‘on-boarding’ easier, so they have a range of products and initiatives to help corporates along the way. I may cover some of these in the future – depending on the interest out there.

8. SWIFT for Corporate Trends

  • In short, SWIFT want to register more corporates globally. In order to do this, SWIFT recognise they need to make it easier to register corporates and implement SWIFT solutions – this is great for corporates!
  • In 2014, the:
    • Biggest growth was in the Americas, up 40% on 2013
    • Most corporates registered were in Europe, 121 compared to 107 in 2013
    • Of the corporates joining SWIFT half had an annual turnover of under $1 billion
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 SWIFT for Corporates

It will be interesting to see how SWIFT develop their business case with corporates, and to see if they truly manage to entice a broader range of corporates through their proposed faster on-boarding solutions. If this happens, it presents corporates with very real opportunities to centralise, streamline and make various processes more efficient globally. What remains key though is that SWIFT continue to offer corporates a standardised and multi-bank solution across all products. The bank agnostic and global channel is the beauty of SWIFT, and as SWIFT spreads it wings into additional offerings it also remains its biggest challenge.

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