Corporates Take a Firm Stand on Day Two of Corporate Forum

16 September 2009

The second day of the corporate forum at Sibos saw corporates getting rather feisty, making demands of the SWIFT community that need to be met to ensure further collaboration.

Day two of the corporate forum at Sibos saw the corporate participants boldly taking a stand, making demands of the SWIFT community in order to move real collaboration forward. It was quite clear that, as customers, they are fed up with the proprietary or individualised aspects of banking solutions - specifically with regards to the way that standards are implemented differently at each bank, effectively defeating the purpose of a single standard.

In the session entitled ‘Corporate Requirements for Collaborative Bank Solutions’, David Blair, vice president treasury at Huawei, a global telecom provider, bluntly stated that corporates must play a role in forcing standards acceptance by refusing to accept variants from banks. Vipul Shah, senior director and head of financial services, PayPal/eBay, also agreed, saying that proprietary solutions are “like cement" and reduce competition.

Even the bankers sitting beside them on the panel, Neal Livingston, global head of client access, transaction banking at Standard Chartered Bank, and John Laurens, head of payments and cash management Asia-Pacific, HSBC, agreed, with Laurens adding that only demand from the corporate community will give the impetus for a breakthrough in the XML standard development and adoption.

Christina Easton, senior manager, global cash operations, Microsoft Treasury, took this message and re-iterated it in a later case study session discussing global implementations of SWIFT. Relating to Microsoft’s decision to move to the XML standard, she said: “We have told our potential banking partners that if they are not able to use XML format for messages in the next 12 months, then we will not open an account with you.” Obviously, Microsoft has the global strength to make its banks listen, but the general mood is that if corporates take a firm stand, then the banks will be forced to re-think how they normally operate.

Microsoft, which has a centralised treasury in Redmond, Washington, and oversees 108 subsidiaries, is a relative newcomer to SWIFT, joining in 2005. Today it has 99% electronic visibility (e-visibility) over its cash flows, and is still expanding its usage of SWIFT. In a video interview with gtnews, Easton mentioned that treasury was looking at CAMT XML message types, as well as looking at its billing analysis sent over FileAct. Microsoft also plans to have treasury payments go through SWIFT in the future and is implementing a pilot programme for electronic bank account management (eBAM).

Both Easton and Blair were also forthcoming in terms of what they thought the next steps for SWIFT were. Blair was keen to have the ability to send direct messages to benefiting banks, instead of waiting for the message to travel through a number of corresponding banks. He also hoped that SWIFT’s Trade Services Utility (TSU) for open account trading takes off to - again - solve the problem of every industry having its own standards, but acknowledged that the challenge is that 98% of corporates haven’t heard about it. “The banks have defined the collaborative space, but if this is to work, SWIFT will have to talk to the corporates too,” Blair said.

Easton had a longer wish list, even though she believes that SWIFT is doing a good job ‘evangelising’ connectivity capabilities. She thinks that now is the time for SWIFT and the banks to address merchant services and acquiring, which is currently very difficult for treasury - she proposed a type of Merchant Services Utility (MSU). Maybe even more immediately, Easton suggested that SWIFT should develop a playbook to understand different message types and how they can benefit from business process improvements; benchmark SWIFT service agreements and number of pages; provide more guidance around the platform ecosystem and the partners that corporates are able to use; and, finally, develop a more proscriptive guidance for corporates that are beginning implementation so that they start with more detail of what is involved.

At the end of the day, the banks that make up the SWIFT community have to heed the words of Ignacio Escudero, vice president, global cash management sales, BBVA: “Developing SWIFT corporate connectivity means much more than being connected to SWIFT.”

First published on www.gtnews.com