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Swift rebates EUR33 million as Miller cuts up rough on costs

11 October 2004  |  4468 views  |  0 Swift

For the third year running, industry co-operative Swift is to rebate network users. The 10% return on 2004 FIN traffic is expected to result in a total payout to member banks of EUR33 million.

At this year's Sibo conference in Atlanta, Leonard Schrank, Swift CEO, said the network is also on track to meet targets for cutting prices by 50% over the 2002-2006 period.

Cutting costs is a big priority for Swift users. Speaking at yesterday's plenary session, Heidi Miller, CEO, treasury and securities services executive, JPMorgan Chase, challenged the network to extend its ubiquity and justify its continued existence during an era of free Internet traffic. Although Swift messages had fallen in price by 57% over ten years, Miller questioned the value of rebates on messages that make up only a fraction of IT costs.

"If the Internet is ubiquitous and free, why should we pay Swift for messaging?" she asked.

Much of Swift's future value lies in its next-generation messaging system and the success or otherwise of efforts to extend its community of users.

Speaking to the press earlier today, Schrank announced that 95% of members had completed the migration to SwiftNet, with 85% of all FIN traffic now passing over the IP-based messaging platform. But he warned that penalties for late X.25 decommissioning are now in force.

With migration almost complete, Swift is keen to concentrate on the benefits of moving to the interactive network for members and prospective new users and will discuss ways of using SwiftNet to increase business at Sibos.

Recent research by TowerGroup suggests that the top US financial institutions are still evaluating how best to use SwiftNet.

"Overall, top US institutions gave Swift high marks on the SwiftNet migration process and the new platform's infrastructure," says Breffni McGuire, senior analyst in the global payments research service at TowerGroup. "Perhaps most important from this perspective, some survey respondents have already seen performance throughput improvements on the new platform."

Whilst traffic volume on the messaging network is increasing overall, says Schrank, uptake by the investment management community is slower. The Swift CEO admits that "there is a long way to go to get them to adopt the system".

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