By the end of next year more than 7,000 financial institutions worldwide, including 700 in the United States, will have changed the way they communicate with one another for large, secure currency transactions via Society for Worldwide Interbank Financial Telecommunications.
Swift has set Dec. 31, 2004, as the deadline for its members to be converted from the X.25 network to the new Internet protocol SwiftNet. The society says the change is necessary to maintain safety and stability in the network, which carried over 1.8 billion messages last year.
Innovative members will use the conversion to revisit and improve their internal processes, while less-daring ones will simply replace systems - and miss a golden opportunity to improve service and streamline operations.
Members should focus on two main areas during the conversion that will help them reduce processing time and costs, as well as increase the efficiency and security of transactions.
Process. The new Swift gateway is meant to simplify members' message processing. Banks should take advantage of this chance to review the way they handle their network traffic. They can consolidate sending and receiving locations in some situations, reducing the number of potential failure points.
The project offers significant opportunities to exploit emerging technologies and services - just as the Y2K programs did a few years ago. Your technology staff or consultants will be rewriting the code, so you may as well consider improving it. Review your processing steps and design more efficient ones.
Make improvements you have seen since your company merged, consolidated, or acquired but could not implement because of resource limitations, logistics, or politics. The cost of those changes will be covered in the overall conversion.
People. Your staff will need a certain amount of training for SwiftNet. Cross-train in all aspects of its administration, error resolution, protocols, and message types.
Increase each employee's skill level, and familiarize more managers with the importance of proper formatting and instructions. Those who understand and appreciate processing basics will provide better traffic flow.
People in the trenches are the best efficiency experts and troubleshooters. Encourage them to step forward, and pay attention to them. They will identify solutions, because doing so will make their day-to-day lives easier.
SwiftNet offers members a "single window" to the society's services. In addition to the traditional financial application, they can access such services as continuous link settlement and financial information exchange. The migration is an excellent opportunity for institutions to consolidate systems.
The new services will also encourage more institutions to become members. An expanding membership will make SwiftNet more valuable and less costly per message.
Even members' customers will be able to access network services, including user groups. They can also initiate bulk file transfers, used for automated clearing house applications, from the SwiftAlliance WebStation.
To help banks successfully navigate the conversion, Swift has certified service providers, which have years of experience in its products and technologies. They can also help institutions become members and implement SwiftNet.
Smaller institutions may consider using SwiftNet via a service bureau - a cost-effective solution. That approach provides mutual benefits, with the institutions getting access and the society getting more messages flowing over its network.
