IBM is set to announce its intention to participate as a user of the Swift banking network under the newly-agreed corporate access model.
The move by the US computer company comes as Swift prepares to launch a pilot programme for the new user community with eight major corporate treasuries and eleven banks.
IBM's decision to sign up to the scheme was announced by Swift chief executive Lenny Schrank at a press conference in Sydney, where the financial messaging network is holding its annual Sibos event.
Flanked by Yawar Shah (pictured), Swift's new chairman who led a year-long review by leading Swift shareholders into corporate demands for improved access, Schrank forecast a "significant transformation" in the corporate-to-bank space over the next few years as the network targets the top 2000 corporates worldwide.
Corporates have had access to Swift since 1988 via Treasury Counterparty and Member Administered Closed User Group (MA-CUG) models. Although these bank-sponsored payment gateways have so far been deployed by over 100 banks, and joined by over 150 corporate users, they have been criticised by the large corporate community for preserving a restrictive, proprietary relationship.
The new model, dubbed Score (Standardised Corporate Environment), will enable qualifying corporates to join a single closed user group (CUG) and interact with all participating financial institutions.
Pilot corporate participants include Alstom, Arcelor Mittal, CIBA, Danone, Gaz de france, General Electric and Microsoft. The focus of the pilot, to be launched in January 2007, will initially be on treasury and cash management. Additional bank services such as exceptions and investigations, trade services and securities services are expected to follow.
Corporates qualifying for the programme must be listed on a regulated stock exchange, effectively shutting out tightly-controlled privately-held groups like Ikea, and others in private equity hands like Sungard. Shah says the Swift corporate access group "agonised" over the objective entrance criteria, but would not be prepared to bend the rules for non-listed companies.
Corporates participating in the pilot programme are enthusiastic about their prospects. Microsoft's senior treasury product manager, Ed Barrie will present a seminar in booth L07 at the Sibos conference Tuesday outlining the company's plans to to automate its own banking communications using SwiftNet.
Barrie will outline how Microsoft corporate treasury is working to centralise its view of 1000 global bank accounts and some of the challenges facing corporations in this area.
"Unifying multiple communication channels and data formats from our banking network has been one of the challenges we faced with this project," Barrie says. "For example, not all banks support prior-day and intra-day statements in the exact same manner or deliver them using the same timing or activity event drivers. Some banks also send them in different languages and data formats, meaning each one needs to be translated differently for our SAP enterprise resource planning environment."
He says access to SwiftNet will give the firm a standardised process for communicating with banking partners leveraging industry-standard formats.
"This makes it quicker and easier for Microsoft employees to access financial information because they will no longer need to spend time searching across disparate systems, and it is a huge benefit for any corporation."
Beginning with incoming MT940 end-of-day statements, Microsoft is working to ensure that each of its banks delivers activity reports on the same platform, allowing easier connection into its SAP R/3 treasury management system. This enables the various business groups within Microsoft to share banking data and leverage information from other groups across the business.
"The benefit of connecting our network via Swift is that we reduce the number of systems and data silos currently in operation," Barrie says. "This gives us a standardised and efficient approach to our enterprise financial messaging needs. In the future, an added benefit will be that as more corporations connect to Swift, the more services, such as support of ISO 20022 XML and Exceptions & Investigation messaging, that banks will start to offer and the more companies like Microsoft can take advantage of these services."
He says Microsoft is on track to connect to 30 of its global banking partners by June 2007 and aims for over 90% coverage of its high-volume bank accounts within the next 12 months.