Tuesday, September 15, 2009

SWIFT TSU passes the all-important 100 mark

SWIFT's Trade Services Utility (TSU), which is a central matching utility designed to standardise the process between banks for matching purchase order and invoice information, was first announced at Sibos in Atlanta.

It was initially designed to help banks become more relevant in the open account trading space, which makes up more than 80% of cross-border trade. While the TSU attracted some early adopters, until recently it looked set to become a non-starter as few banks signed up to the utility. But oh what a difference a financial crisis and changes in the trade finance market make. 

Today SWIFT announced that the TSU passed the all-important 100 mark in terms of bank membership with recent signings including Barclays Commercial Bank, Yapi Kredi Bankasi, Banco de Crédito del Peru, Bank of China Hong Kong, Shin Kong Bank and Taishin Bank.

Those banks that recently signed up to the TSU are hoping it will be one of the key lynchpins for developing the next generation of trade finance solutions. However, the TSU still has its sceptics, with corporates saying it offers little in terms of direct value to them.

And although trade finance is sexy again given that most banks have witnessed increased trade finance activity as buyers and suppliers look to mitigate counterparty risk, working out how they can successfully re-integrate themselves into corporates' supply chains is still challenging for most banks.

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