Steve Kalkowski, manager of GE's cash management systems, announced yesterday that the firm will have completed its full SWIFT implementation by the end of the first quarter in 2006. By this time it aims to have the entire company - all 6,000 legal entities around the world - operating from its web-based payment system, with SWIFT messaging as a core component of the platform.
Kalkowski was speaking on a panel discussion at yesterday's Sibos conference on corporate-to-bank integration. He explained how GE was looking to change the way it did payments which would involve changing the dynamics of the relationship GE has with its payment banks.
In essence, he said, GE was looking to get out of the business of dealing with local clearing situations in all the countries it works in. It would like its banks to do this. "Banks know how to do STP much better than I do," he said.
For this to happen, incorporating SWIFT into its new payment platform gives GE a level of reliability and standardization that the individual relationships with banks does not. "There is nothing more secure or reliable than a SWIFT network," he said.
The decision to move all GE's payments messaging to SWIFT was taken two years ago and since then, Kalkowski says the project has been a great success. Failed payments have been eliminated. Reconciliation figures have improved. Software upgrades have been made easier. GE can also optimize its working capital and cut its costs as a result of the implementation.
Kalkowski estimates that the return on the investment made in the implementation is over 400%. However the real problem is in the integration of this process with the banks.
"It is really painful," he said. "The banks definitely need to move quicker. Payments are a commodity. We are looking for other products and services around that on the reconciliation side when dealing with our banks."
He called for a new level of standardization in the payments process between corporates and banks and for banks to embrace standards if they are to seek further integration. "It is in no one's interests to have multiple standards and multiple formats," he said.