Wednesday, October 11, 2006

Alternatives to SWIFT

While SWIFT has the habit, like a number of so-called global banks, of beating its own drum and portraying itself as a truly global network, it is easy to overlook the fact that not every bank is on SWIFT and not every bank or corporate necessarily wants to use or join SWIFT.

The Sibos conference has been dominated by the usual PR fluff with IBM announcing that it would join the SWIFT network under the new corporate participant category. SWIFT CEO Leonard Schrank made it clear on the opening day of the conference that it has no ambitions beyond getting the top 200 corporates on the SWIFT network, so what about those other corporates, and the banks that find SWIFT an expensive option for their connectivity needs?

"We have to live with SWIFT," says Jerry Luckett, director, product & strategy, core banking, Misys Banking Systems, commenting that the migration to SWIFTNet was expensive for a number of its members. But Luckett believes it is important for customers to have alternatives to SWIFT.

The alternative to SWIFT brigade seems to be gaining momentum and Luckett believes it could be fuelled by banks rebuilding their payments infrastructure.

Following on from Schrank's comments on day one of the Sibos conference that SWIFT would deliver a further 50% reduction in costs to its members within five years, some say banks could have that 50% cost reduction now if they used alternative IP networks like BT Radianz (this is not a plug for BT Radianz by the way).

In what some see as a potential move to position itself as an alternative payments network provider, UK clearing house Voca will announce today (Wednesday)the opening of a SWIFTNet channel for banks to connect to its Payments Platform for bulk and real-time payments. Voca will establish a market infrastructure Closed User Group using SWIFTNet as a "multi-purpose channel" for its SWIFTNet Transmission Service, which supports its SEPA offering and its new real-time payment service scheduled to go live in November 2007.

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