Messaging must be tackled Swiftly

Cutting costs is a priority for banks and investment in the right connectivity solution is an important part of lowering headcount and improving the bottom line. 

It is true that most bank systems cannot cope with the increase in payment messages we are currently seeing.  The solution is to adopt a unified, standard approach to payments messaging across all message types, for all counterparties. 

This is where the concept of a Swift messaging hub comes into play.  The attraction is plain to see – connecting to SwiftNet provides an opportunity to tackle the challenges of the payments market head on, achieve end-to-end STP and reduce processing costs to an absolute minimum.

The Swift network provides a single window on the world for financial communications with partners, clients and market infrastructures.  Services such as SwiftNet Cash Reporting and SwiftNet Trade Services Utility are now available via the same infrastructure.

But connecting to SwiftNet does present some particular problems.  For example, banks connecting directly face a high total cost of ownership, low performance, restrictions on capability and, potentially, high operational risk.  All of which means the case for a consolidated streamlined approach to SwiftNet connectivity and Swift messaging is unanswerable.

A single window approach radically cuts costs by centralizing the processing of Swift payments messages and the elimination of point-to-point linkages.  A Swift messaging hub also allows banks to connect to other financial infrastructures including multiple branches, departments and back office systems, optimizing the investment in existing SwiftNet infrastructure and reducing costs. Back offices and network applications can operate independently from each other which allows banks to react more quickly to market events.

Banks are also able to tailor the messaging environment to their customers’ needs, with payments prioritized by client criteria and content – such as service level agreements, predetermined cut-off times and holidays – rather than value.  A necessity now as corporates demand better and more bespoke service.  Significantly, not only does this cut costs but it generates revenue too.

A Swift messaging hub provides banks with scalability, high performance and operational risk reduction. So in future the adoption of a consolidated approach to payments and Swift messaging will be a necessity if banks are to be competitive.   Failure to do this will at best mean that banks’ costs and risks remain high and at worst mean they are left behind by their peers.