Treasury Today Country Profiles in association with Citi
Treasury Today November/December 2006 magazine cover Buy print copy button

November/December 2006

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Too SWIFT for some?

The recent SIBOS conference in Sydney demonstrated just how swift SWIFT has been in developing its corporate access model. Having established that corporate access to the messaging system was acceptable, SWIFT is rapidly developing means by which corporates can access the system and encouraging banks and system suppliers to do the same. In particular, the much criticised MA-CUG model has been supplemented by SCORE, as reported in this month’s news section. Going around the conference hall you would imagine that it was a corporate event, with every supplier emphasising their SWIFT connectivity.

In reality, this is still a game for the big players with high payment volumes but at the least SWIFT provides communications standards that every corporate can work to. The mantra is becoming “Let’s not compete on connectivity. Let’s compete on products and services.” With XML providing the vital link between varied inputs and a standard set of formats, the nirvana of STP (straight through processing) may be getting nearer. Our mantra is “Let’s hope that is true.”

A lot less certainty surrounds the TSU – Trade Services Utility – also being developed by SWIFT. Still in pilot and with some technical difficulties to overcome, this facility hopes to provide the back-bone for open account trade transactions. The same elusive goal pursued by Bolero and various other EDI systems over the years. Again XML may provide the key. Although SWIFT emphasises that it is a bankto- bank system, it is in reality a bank-run corporate-to-corporate system that relies on input of trade information at a very early stage – a long time before any payment is to be made. Is there a compelling reason for corporates to use this new service? Behind the scenes, several industry players expressed their doubts. But if the TSU does not succeed, the ability of the banks to move up the supply chain will be limited. This is one to watch.

Too slow for others?

Also at SIBOS it was interesting to hear Gerard Hartsink for ABN AMRO, chair of the European Payment Council, saying that governments would have to get behind the SEPA initiative and direct the payments they controlled to the new clearing systems. This provides more evidence that getting domestic payment to switch to these new systems is going to a big problem. With so many countries having relatively efficient and cheap clearing systems in place there will be little incentive for domestic payments to migrate to the new systems. SEPA will happen, but it is not going to be an easy transition.