Swift looks to grow its corporate community in Asia

FinanceAsia talks to Connie Leung, Swift’s director for payments and trade markets in Asia-Pacific, and Zelda Anthony, head of new customers in the region, about the company’s push to build a regional presence.

As companies build their businesses in Asia and try to capture the growth that the region promises, FinanceAsia talks to Swift about the trends they see in regional payment services.

How is Swift’s strategy in Asia-Pacific developing?
Connie Leung:
We have been rolling out Swift for Corporations services globally during the past seven years. Initially, we focused on the larger and multinational companies (MNCs), where uptake has been strong. Today, about 11% of the nearly 700 corporations that are using Swift are located in the region. These days, we are increasingly reaching out to local companies and small and medium-size enterprises (SMEs), especially because here in Asia they are often tied to international trade.

The products that are of particular interest to Asian corporations include payables/receivables, account statements and treasury confirmations, with trade finance gaining traction as well. By adopting single connectivity over Swift and standardising the exchange of information with all their banks, companies benefit from cost reduction and enhanced visibility of their cash positions – issues which remain important to them in the post-crisis era. We have also been actively promoting the use of Swift for trade messages between banks and corporations by working closely with the Pan Asia E-commerce Alliance.

Are you trying to attract local corporations and SMEs?
Leung: Swift is working closely with our banks and partners in Asia-Pacific to create market awareness amongst these corporations, for example, with our recent series of regional forums held together with local treasury associations, our customers and partners over the past few months. This segment is particularly focused on easy-to-use solutions that reduce complexity at lower cost while giving them the benefits of connecting over Swift. For this reason, we’ve taken concrete steps to make Swift connectivity even more cost efficient, for example by introducing the new Alliance Lite interface, which was used by 30% of our new corporate customers. We also have very competitive Service Bureau offerings and our vendors’ plug and play solutions dramatically reduce integration efforts for these SMEs.

How are you addressing some of the major challenges for Swift in Asia, including for instance, lack of standardisation?
We’re seeing a visible increase in the commitment of our community in Asia to the need for standardisation and harmonisation of market practice, as demonstrated earlier this year by the very public endorsement by the PBoC [People’s Bank of China] for ISO 20022 standards in their domestic market. We’re taking a pragmatic approach to introducing standards across the region. Where there is a lack of standards, we offer a standardised communication channel such as FileAct, on which any type of domestic standard can be transported – including other character sets such as Chinese characters or Kanji. At the same time, we’re working closely with the Asian community on standardising content and formats by fostering adoption of ISO 20022, not just in China but also in Japan, India, Australia and other countries. In fact, I think we’re going to see increased global leadership from the Asians in standardisation as we move forward. This reflects the fact that Asia is perhaps different from other markets because of the pace of change and their commitment to innovation and building best-in-class infrastructure. For Swift, one of our biggest challenges – and therefore opportunities – is to be part of this cutting edge use of automation and standardisation in the industry.

How is Swift responding to Asian companies’ concerns about risk management?
Risk management certainly is at the top of the agenda for corporations today, and even though Asia is in recovery mode, the lessons of the crisis are definitely not forgotten. Companies are attracted to Swift precisely because our corporate offer, by its very nature, allows them to improve their risk management in a number of areas: operational risk (ie, improved security and reliability); liquidity risk (ie, better visibility of cash); and counterparty risk management (ie, it’s easier to switch to another bank).

What major trends have Swift identified in cash management?
Leung: In general, we’re seeing continuous improvement in cash services, where corporations are using standardised and automated Swift connectivity across the board, from cash to treasury and trade.

Innovative services such as electronic bank account management (eBam) are clearly a hot topic. Although eBam is not properly speaking cash management, it’s clear that dematerialising bank account management flows will bring significant benefits, such as speed, and certainty in the area of cash management. We are very supportive of the eBam initiative and we have worked with the community to develop standards that are now used on the Swift network between banks and corporations.

In addition, we are completing a new offering for a multibank solution for digital signatures. It is called 3SKey and will be launched at Sibos 2010. Users will be able to use 3SKey to manage their bank accounts as well as for payments or any other data flows they exchange with their banks and that need to be authenticated at the individual level. The 3SKey can be used on SwiftNet as well as proprietary or private networks.

What are the latest initiatives you are working on in trade finance in the region?
Corporate treasurers are expanding their Swift connectivity to cover other business units such as trade. The MT 798 message, for example, has been adopted to manage the LC [letter of credit] and guarantees paper work processing. In Asia, letter of credit application and advising is mostly paper and to support the MT 798, Swift works closely with our partners’ solutions to help automate their trade paper processing. By adopting the MT 798 standards, corporations can consolidate their trade finance positions with various banks through the standardized messaging.

What themes/trends do you expect to see in Sibos?
The themes we expect to tackle at Sibos for the corporations market include how risk management has changed after the crisis, a strong focus on supply chain aspects such as working capital management, eBam and Swift’s new interoperable solution for digital signature, 3SKey. We will also be running practical workshops for corporations and banks with regard to usage of Swift in the corporate-to-bank space and once again are running a ‘conference within the conference’ with the two-day Sibos forum for corporations.

How aware do you think Asian companies are about Swift and its services? How are you enhancing this?
Zelda Anthony: One reason that we are seeing a positive ramp up of awareness in Asia is because we are working actively with our bank customers who service them. After all, banks promote Swift to their customers because we help them to offer better value-added services to their corporate customers.

Corporations are a major focus area for us here in the region, and in fact I’m now part of a new team that is tasked specifically with bringing on new corporate users.


This story was first published in the September 2010 issue of FinanceAsia magazine.

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