The pressure to take costs out of transaction processing is proving to be an opportunity for SWIFT, which is gaining traction in North America among corporate users. At the same time, it also recently entered into a partnership with SmartStream to bolster securities processing.
Financial Insights says a survey of 230 corporates that do most their business in North America found that half are either using, evaluating or are interested in using the SWIFT for Corporates offering. The research firm says the adoption is being driven by the financial crisis and the development of the Alliance Lite interface, which allows Web-based access to the SWIFT network for a monthly fee.
The research firm also says the offering’s open standards is attractive to corporates and is in tune with a shift by Tier 1 banks away from opposing standardization efforts. Financial Insights predicts less usage of bank payments initiation and a move to straight through processing via treasury management systems and enterprise resource planning initiatives. SWIFT’s also moving to bolster adoption of STP in the securities business by enabling the 8,830 members of the SWIFT community—including 1,455 institutions in the U.S.—to reconcile trades using SmartTrade’s Transaction Lifecycle Management in a hosted fashion over the SWIFT network.
“It’s a ‘TCO’ [total cost of ownership] play,” says Chris Church, CEO of the Americas and global head of securities for SWIFT. “The cost is reduced because the industry can take advantage of SWIFT’s infrastructure and standardization.”
Philippe Chambadal, CEO of SmartStream, says the move is designed to improve securities processing “throughput” (trade payments that go through without breaking or failing) from the current industry rate of about 70 percent to about 95 percent. “By increasing the STP rates you have a need for less people and less time for execution,” he says, adding the partnership has thus far attracted the participation of about 70 banks, money managers and hedge funds. “You can make the whole lifecycle of a trade more efficient.”