| SWIFT Bank connectivity now a more viable option for mid-sized businesses |
Many treasury managers may want to take a fresh look at SWIFT reporting and messaging services. As a uniform and potentially more efficient way to connect to all of their banks, the international bank-owned consortium has introduced service packages geared toward middle-market companies as well as large corporate companies.
“Treasurers are always looking for ways to make their operations more efficient,” says Sheryl Wilhelmy, international product group manager within U.S. Bank’s Global Treasury Management Group. “They want straight-through processes for all of their financial flows with their various banking relationships, and SWIFT is a logical solution.
“The fundamental appeal of the SWIFT channel to corporations,” Wilhelmy says, “is that it is bank-agnostic.”
In addition, for treasurers at middle-market companies, viewing payments and cash flow in real-time is essential, and SWIFT reporting can enable that.
Developments in corporate SWIFT access
SWIFT, a non-profit consortium owned by its member banks, has come a long way. For most of its 38-year history, SWIFT served only its member banks. But in 2001, SWIFT established the “Member Administered Closed User Group” (MA-CUG), which allowed select corporations (generally multinationals) to run a messaging system that banks could join.
In 2007 SWIFT introduced a new service called the Standardized Corporate Environment (SCORE). SCORE allowed large publicly held corporations to communicate directly to SWIFT member banks, and brought greater standardization of message types. Corporate eligibility for SCORE expanded two years later, allowing essentially any company, including privately held ones, to use the service.
Still, the economics didn’t make sense for middle-market companies. In response, SWIFT developed a lower-cost service called “Alliance Lite” that is more appropriate for companies with less message traffic. Even more recently, SWIFT introduced “Alliance Lite2”, which offers cloud-based connectivity.
As with other SWIFT corporate services, Alliance Lite and Alliance Lite2 enable treasurers “to communicate with their banking partners using a secure channel rather than logging into various banking sites or establishing a direct transmission connection with each of their banking partners,” Wilhelmy explains.
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Meeting lower-volume needs
The fee structure makes Alliance Lite2 potentially viable for corporations with as few as two or three banking relationships.
Geared to companies with as few as 200 messages a day and suitable for connecting customers who send and receive up to 10,000 messages per day, Alliance Lite2 supports both manual message entry and automated message flows.
The basic requirements are a PC or laptop, the Internet Explorer browser, and a broadband Internet connection. The security system involves the use of a USB token supplied by SWIFT that is associated with the user’s password. Users looking for an alternative to Internet-based connectivity can employ a SWIFT-administered virtual private network (VPN), although that approach requires additional hardware. Alliance Lite2 is designed to integrate with front- and back-end applications, payment and banking systems, as well as ERP systems.
“With SWIFT, you’re removing the front-end graphical user interface application and channeling raw data,” Wilhelmy says. “The treasury workstation or the ERP system creates the transactions and delivers them straight through to the bank.”
With SWIFT bank connectivity, treasury workstations continue to give treasury managers the ability to conduct analyses, cash flow forecasts, research and transaction investigations, as well as execute non-standard payments, Wilhelmy notes.
Is SWIFT a good fit for your business?
Contact your Treasury Management Sales Consultant to learn more about SWIFT messaging and reporting services. U.S. Bank can help analyze your needs and consult with you on the best solution.
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