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Sibos 2010: rebuilding trust

In yesterday’s blog, I focused on what regulation means for the payments industry. This time it is another of the key themes being discussed at Sibos that takes the focus: rebuilding trust.

The breakdown of confidence in the wholesale banking market has created a significant customer funding gap in many countries. While banks look to lower costs, their corporate customers have also been impacted by the global slowdown, and thus want their banking partners to enable better, more up-to-date information and reporting for intra-day liquidity management. The banks themselves also feel the need to improve their risk management capabilities in order to avoid some of the pitfalls that led them into the current crisis in the first place, while continuing to offer credit.

While budgets tighten, there is an ongoing need to invest to meet banks’ compliance requirements and, just as the banks need to boost risk management for their own internal purposes, their corporate customers are also demanding this as a value-add for their wholesale payments services. Corporates need to get a complete picture of their exposure in order to be able to manage their overall risk and, in the event of there being a problem with a specific payment or account, they want to have it fixed centrally, rather than engage in separate processes for each payment type.

Corporate treasurers are themselves calling for better liquidity management services to be offered by the banks from which they receive wholesale payments services. They need, at the end of each business day, to decide what high-value payments must be made immediately, what accounts payable and payroll matters must be reviewed and resolved, and how any excess cash should then be invested. Once these allocations have been made, reports need to be generated and settlements and confirmations reviewed. Corporate treasurers are therefore increasingly asking their banking partners for features in their payments services such as data consolidation, standardization and integration with their general ledger and ERP systems, as well as the provision of analytical tools to help them understand their end-of-day options more quickly.

A consistent payments architecture within the bank can facilitate the provision of such value-adds, aiding with data and application integration, as well as promoting the use of common services. For instance, data from multiple payment types can reside in a central repository, making it easier to report back to a general ledger or an ERP system, as well as providing simpler, faster information to the corporate treasurer at the end of the business day. Meanwhile, the new, value-added functions can draw on common services, making it faster to formulate them and get them into production.


Comments: (1)

A Finextra member
A Finextra member 29 October, 2010, 06:05Be the first to give this comment the thumbs up 0 likes

We at SWIFT can only agree with what you are writing about corporate treasurers calling for better liquidity management services. We ran surveys last year while conducting awareness sessions around Asia regarding the SWIFT for corporates solution and the message was loud and clear: corporates are thinking a lot about how to improve liquidity management and therefore how the SWIFT for Corporates solution can help them to improve their cash visibility. In fact this is now a major driver for corporates joining SWIFT.

We are working closely with our banks and partners in Asia-Pacific to market our SWIFT for Corporates solution to help with cash visibility. It enables corporates to have one connection to communicate with all their banks instead of multiple online banking applications. The corporates can receive bank account statements from those banks in a standard format so that the bank account information from all bank accounts can be uploaded automatically into their treasury management or ERP system thereby enabling corporates to see where there cash is internationally. Having the information available in the treasury management or ERP system them helps them to  take the appropriate liquidity management decisions to use the cash more effectively.

 In addition to cash visibility, the survey showed that corporates are also looking to re-engineer their treasury operations by increasing automation, security and compliance as well as to improve operational processes through standardisation, rationalisation and interoperability. The SWIFT for corporates solution helps in these areas through providing a single window solution to communicate with all banks including the security and standardisation you would expect from SWIFT.

Zelda Anthony, Head of New Customers, SWIFT Asia Pacific

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