Tuesday, April 17, 2007

US corporates unsure about SWIFT

At EuroFinance's International Treasury Management conference in Miami, Florida, one of the most advanced corporations, General Electric (GE), was eager to share its experience of how it had used SWIFTNet to rationalise the 'hotch potch' of electronic banking connections most corporations maintain with their banks.

Seth Marlowe, director, strategic initiatives, corporate treasury, operations services, GE, told conference goers it had already established 57 connections with banks via SWIFTNet and that it had another 75 to go. No other multinational corporation has invested as heavily in SWIFTNet as GE, however, Marlowe said it did so without conducting a strategic cost/benefit analysis.

Given the scale of its global operations, Marlowe said GE "had no choice but to go down this path [SWIFTNet]."However,it has not all been plain sailing. Marlowe says setting up multiple SWIFTNet Member Administered Closed User Groups (CUGs) is time consuming, but that the new SWIFT SCORE (Standardised Corporate Environment) Model made things easier in terms of the implementation process.

So are other North American corporates likely to follow GE's lead? Whilst IBM and Microsoft have announced their move to SWIFTNet, there were no show of hands by attendees at EuroFinance's conference in Miami when asked if GE's example had encouraged them to think about moving onto SWIFTNet. Over lunch one banker from Royal Bank of Scotland in the US said the cost of SWIFT was still too high for a number of companies.

It seems SWIFT still has its work cut out for it if it wants to penetrate the North American corporate market.

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