Cash & Liquidity ManagementPaymentsSWIFTThe SWIFTNet Revolution

The SWIFTNet Revolution

There is a revolution happening in the world of cash management – and the revolution’s name is SWIFTNet. It is something that the world of cash management hasn’t seen this for a long time. How can a new technology, such as SWIFTNet, wake up needs and dreams that were put to sleep a long time ago by both corporate treasurers and by the banks themselves?

Let’s not be mistaken! Most people would have thought that technology would have led the market in this area. But in fact this is not the case – it is in fact the totally the opposite! The market is leading the technology. When new corporate financial needs reappear, banks create new services which meet these needs. The market will guide our future actions, not new technology.

But what are the major needs that are shared by the players in the market (banks, clients, sales teams, SWIFT)?

  • First, the market demands a reduction in costs and an increase in the STP rate, both in the world of treasury and payment factory. It takes a combination of a single platform and also access to world standard formats to meet this demand.
  • Another market demand is to have a secure network between banks and corporate particularly with internet solutions.
  • Finally an acceleration in the process is demanded. Real-time transactions will be even more demanded in the near future. It concerns payment processing, status, reconciliation, account statements and intraday liquidity management.

Three Major Revolutions

With SWIFTnet, we are thus witnessing three major revolutions:

A technological revolution

To adopt SWIFTNet is to move towards revolutionizing the cash management process. Firstly, it is access to a network of which the concept is a single platform and a secure world. Then, the new world standard format will come to supplant those currently existing and, very soon afterwards players will want, as is already the case, an acceleration in the process and will want to have access to the real-time transactions.

These progressive revolutions are going to be a unique opportunity for the banks to improve the terms they offer to clients. At least for those who will be able to do so or who will want to do so. Hard choice will have to be made from now on.

A revolution of strategic order

Allowing corporates to have access to SWIFTNet, is to make ‘an old dream’ come true for numerous treasurers. Based on a unique world standard, this network allows companies to be independent from the technological and proprietary solutions, thus enabling them to manage their connection to banks directly or partially via entry points, in their own way. It thus gives them total freedom in their banking connection strategy. A slogan was invented in the recent Sibos, the SWIFT conference held in Atlanta in October 2004 “to be SWIFTNet is to be free”.

A revolution in trust between corporates and banks

Are banks going to be weakened and lose their captive clients with this new ‘freedom’ from corporate? For the banks that are passive – the answer is a definite “yes!” For those banks who do not change – again the answer to this question is “yes!” And for those banks who offer bad solutions – they too will loose clients.

But for banks who will have understood what is essential, these banks will win. Some of the essentials are

  • Solutions offers,
  • Quality,
  • Customer service,
  • Risk management,
  • Customization,
  • Innovative approach to the future.

Conclusion

These banks will win not only by consolidating their market share but also by gaining the long-term confidence of their corporate. This trust is of huge capital value and will be well worth the technological and operational investments. With SWIFTNet, we are about to witness a transformation in the world of cash management especially in the near future. This wave will be of huge importance since SWIFTNet will become more and more obvious to corporates. The future of SWIFTNet does not concern only the world of cash management but also concerns others activities such as Forex and Trade. The concept of SWIFTNet is at the core of all e-banking solutions.

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