SwiftNet went live on 25 May as Hong Kong's financial messaging platform for Clearing House Automated Transfer System (Chats) payments as the Hong Kong Monetary Authority (HKMA) switched from its proprietary network to Swift.
The HKMA and Hong Kong Interbank Clearing Limited (HKICL) decided in 2006 that they would implement the new open platform and replace their proprietary platform.
"This is a classic example of why a market infrastructure moves from a proprietary platform to SWIFT," said Esmond Lee, Executive Director of the HKMA's Financial Infrastructure Department. "The benefits of moving to a platform already used by most of the banks were clear." Most of the real-time gross settlement (RTGS) participating banks have been using SWIFT for international payments for many years.
The HKMA added that interoperability is another key benefit of SWIFTNet. For example, incoming domestic messages received by the banks in Hong Kong can now be automatically converted into the RTGS message, just as these firms were already doing for international transactions.
According to John Laurens, Head of Global Payments and Cash Management, HSBC Asia Pacific, "HSBC sees strong value in having the Hong Kong RTGS infrastructure adopt SWIFT as its connectivity platform. Not only does it allow banks to streamline their back office environment, but it also provides Hong Kong with a future-proof infrastructure. It also allows for the seamless end-to-end transmission of information, thereby strengthening the value proposition for our customers."
Michael Cheung, head of North Asia, SWIFT, who started the SWIFT project back in 2006, added, "The implementation further establishes Hong Kong's position as a major financial centre in Asia, and provides a platform for future growth for Hong Kong-based institutions as well as institutions from across Asia to use Hong Kong's platform to grow their cross-border activity. Besides HK dollars, HK RTGS participants can use their SWIFT connection to clear US dollars, euro and renminbi through Hong Kong for more efficient linking with their foreign counterparties, who are also using SWIFT."
"The platform also provides significant oppopportunity for increased certainty, efficiency and cost reductions for SWIFT customers and firms because they are all using the same standards and platform for both their domestic and international transactions," said Mr. Cheung. "Standardisation leads to major improvements in interoperability, also as demonstrated by TARGET2 in Europe."
By mid-2010, SWIFTNet InterAct and Browse functions will be added to the platform. Customers will be able to use these two additional features to benefit from the interactive and query services available from SWIFT.
Average daily traffic expected from the SWIFTNet platform is around 100,000 messages, mainly generated from the 30,000 payment transactions that have moved to SWIFT from the former proprietary platform.