SWIFT has always been about the banks; ‘by banks for banks’ could be its tag line. But in recent years it has been about corporates too. As SIBOS week approaches, Treasury Today talks to SWIFT Global Head of Corporates, Marc Delbaere, and finds out how treasurers can access the solutions they need.
SIBOS is here again and this year the world of banking descends upon London to ponder its most pressing affairs. Amongst many others, essential matters such as regulation, security, customer delivery and, of course, technology take centre stage for the week-long event.
From a corporate perspective, technology is particularly interesting right now, with SWIFT’s gpi ‘track and trace’ tool having taken several steps forward as it shapes up to become one of the most useful treasury tools to hit the market in years.
SIBOS is of course the SWIFT event and, for Treasury Today’s readers, who better to catch up with than the Society’s Global Head of Corporates, Marc Delbaere. Appropriately taking time out from a gpi for corporates workshop, we asked him firstly how it is that gpi has got the legs to carry it forwards, when other recent SWIFT products have not captured the corporate imagination in quite the same way.
Firstly, says Delbaere, gpi addresses the needs that corporates have been voicing for a long time. Of course, he says, it’s not enough just to recognise problems; there has to be a pathway for delivery too. “Gpi offers a means of addressing issues in international payments – especially the lack of cash visibility, the ability to predict payments outcomes, process simplification, and speed – with which corporates can deeply identify. And now they see a way of executing and achieving the value they have been asking for.”
Delbaere sees the reason for gpi gaining traction as stemming from pressure created by market forces, notably new entrants to the payments space and technology advances. “It’s really an opportunity for the banking industry to raise the bar, align forces and provide an increased level of service to their corporate customers.” In essence then, market dynamics have made it possible to get such fast and effective results for an organisation not usually noted for its rapid time-to-market.
Inclusive by nature
SWIFT is listening to its bank owners, which are in turn attuned to their corporate clients. Devising solutions for a diverse and often hyper-competitive set of interests demands strong connections between all stakeholders, says Delbaere, adding that this is his favourite part of the job; “it’s what makes it so interesting”.
SWIFT has a unique place in the market. It is a not-for-profit co-operative of banks from all over the world. It has the kind of access to the market that few other, if any, organisations have. Delbaere runs the Corporate Advisory Group comprised of senior bankers, providing a platform for participants to discuss a broad sweep of topics.
These topics will have been pre-selected as “non-competitive spaces” and include areas such as standards, client on-boarding, identity management, and KYC; areas where development offers only “collective benefit for the banking industry and its customers”.
Gaining consensus on what is differentiating and what is not – even on something as market-friendly as gpi – is not always easy, notes Delbaere. “Bankers care about the whole end-to-end customer experience. All of these elements, whether they are non-competitive or not, are part of the overall customer experience. The difficulty can be recognising a collective problem that needs resolving. The process to find a solution can take time.”
Secrets of success
That process involves planting seeds of ideas. As any good horticulturist knows, there then needs to be a lot of follow-up activity. “We have to socialise an idea over time so that it becomes natural for the group to think that it can form a collaborative way of solving the problem,” says Delbaere. “That is a fundamental part of producing a successful outcome. That is why everything that we do from a SWIFT point of view derives from taking the ‘collaborative’ angle. We are relying on our community of banks to be able to agree on common solutions.”
The second element of success demands that the solution resonates with its end-user. SWIFT has the opportunity to engage directly with its community of over 2,000 mostly large corporates. “We’re having a lot of quality discussions,” comments Delbaere. “Many see that SWIFT is a means of aligning the banks, helping them arrive at common banking solutions.”
It makes sense from a corporate point of view to encourage a community approach. Instead of having to work with individual solutions per bank, a multi-banked corporate will always prefer, as much as is possible, to have a single common experience across the piece, enabling it more easily to integrate that single experience into its own systems and processes.
For Delbaere then, the willingness of bankers to mutualise their offerings stems, in part, from their realisation that they have too many projects to which they must attend. Tackling the issues in a community manner is much more cost-effective than going it alone. But clearly it is also being driven by a corporate community that longs for common solutions. “SWIFT sits in the middle as the catalyst.”
Catalyst for change
With its apparent inclusivity, SWIFT corporate membership is rising. The more corporates it has, the greater the weight of its collective voice. Does this mean banks will start bending more to the will of the corporate community?
“Banks do aim to please their customers,” Delbaere responds. “Even if five or ten large corporates ask a bank to do something, it is a forceful voice. With 2,000 corporates – typically representing key accounts for the banks – increasingly speaking with one voice, of course it provides more impetus for the banks to ensure they are providing the best experience they can.”
Nobody wants to be put under pressure but there is also a necessary element of alignment with the requirements. SWIFT plays a major role in making sure the pressure that is legitimately coming from corporates is applied in a way that makes sense. “We recognise the corporates are a great driving force, but also that the banks wish to please their customers different demands,” notes Delbaere. “SWIFT is able to funnel some of these requests through an efficient way of collaboration, something that is appreciated by the banks.”
SWIFT may be seen as the nexus between the fintech community – whether start-up or established vendor – banks and corporates. “It is critical to hear as many voices as early as possible in the process to make sure that we are designing the most effective solutions,” explains Delbaere. “For established vendors, it makes sense for them to add extra capability, and so if there is a guarantee of quality of delivery, and the banks and corporates agree to their involvement, then we are happy to bring fintechs into the mix as an effective way of accelerating some of our initiatives.”
It is a model that has worked well for the progress of gpi. Today, corporate involvement is essential. No SWIFT-for-corporates programme would be started without the voice of the corporates having been represented “on day-one”, states Delbaere.
SWIFT currently has three major initiatives ongoing in the corporate space, all with the corporate voice being heard loud and clear. Gpi for corporates in now entering its second phase with the specification design for a real-time incoming payment tracking and notifications tool.
The second initiative, KYC for corporates (“a huge issue that is plaguing everyone”), has drawn together a balanced 25-strong corporate and bank working group. This is now seeking to define the common processes and standards for a solution that will span multiple countries and multiple banks.
The third ongoing programme for corporates, based on the long-standing 3SKey programme, aims to tackle legacy issues around identity management. “As an industry, we should be making more noise about this topic,” admits Delbaere. Accordingly, the group is aiming to dematerialise the current physical multi-bank token.
Identity management issues affect a much wider community than the other two. With SWIFT claiming over ten thousand corporate 3SKey users, many being relatively small, the programme is creating a new set of requirements, notes Delbaere.
Indeed, the proposed requirement for two physical tokens to be able to generate dematerialised tokens, whilst not an issue for large multi-banked corporates, has seen many smaller corporates raise concerns that it would negate any solution value for them. “Knowing this has fundamentally changed the design of the solution,” he says. “Had we not asked for the widest range of inputs from day one, we might have embarked on a path that led to a totally different product.”
It’s obvious that regular consultation with corporates of all sizes, through every stage of development, is the only way to make sure new SWIFT products evolve into usable tools. SWIFT’s core corporate community – and thus its most vocal programme participants – is the large multi-banked multi-nationals.
Smaller corporates are represented in the group, particularly younger companies that are developing internationally, so is there room for more direct contact with smaller players? “In general, smaller businesses are quite open to discussing the issues they are facing, and we can gain a lot of insight from the number of conversations we have,” notes Delbaere. “But I have not seen too many closed doors.”
That said, he acknowledges that SWIFT’s focus is on finding common solutions for its core community. Smaller corporates may be better served by a single bank-or country-level solution; access to the entire SWIFT network may be overkill.
But as the corporate sessions at this year’s SIBOS draw their audience, conversations and debate will no doubt shine light on more issues, drawing out nuances that SWIFT had perhaps never even considered.
As ever, the SIBOS corporate programme is less about discovering treasury trends, and more about accessing the good and the great of the global banking industry. If it forces more useful solutions like gpi, then so much the better. As Delbaere says: “It’s where corporates can have the biggest impact on the direction of the banking industry”.