The global financial services industry is in the midst of a payments revolution. Owing to technological advancements and the rise of fintech, traditional financial institutions no longer have a monopoly on facilitating financial transactions between businesses. They are being forced to improve their payment services to accommodate the changing payment needs of modern-day businesses, keep up with shifting regulations, and meet the expectations of convenience and speed while protecting their clients against increasing cyber security threats.
This is good news for corporations that frequently transact with partners, clients, and vendors! They benefit from improved payment solutions with innovative user interfaces, optimized processing speeds, and secure transactions.
The Key to Payments Transformation
However, transforming your payment solution and processing capabilities is easier said than done. To deliver speedy, reliable, and efficient payments, banks need to first have the capacity to establish and maintain a secure payment connection with their banking counterparts, and then be able to support connections with corporate clients.
This is where the world’s leading financial messaging network provider, Swift, can play a role. Swift is one of the main channels banks and businesses around the world choose for their financial messaging. And as such, payments modernization through Swift can help the global financial community stay up-to-date with their payments processes.
The reason for Swift’s dominance in the payments industry is its evolving infrastructure that allows financial institutions the flexibility to innovate their payment solutions, adapt to changing regulations and market needs, reduce costs, improve efficiency, and ensure secure transaction processing around the globe. Swift currently has about 11,000 members in its network, with over 20,000 entities processing over 45 million financial messages daily. A large portion of those messages are payments, so that is a large volume of payments being sent around the world every day.
However, Swift connectivity market insights indicate that banks and corporations are challenged with establishing and maintaining connections with the Swift network to advance on their journey to payment transformation.
Getting the Best Out of Swift
Simply connecting using Swift connectivity to send and receive financial messages through the network is not enough for optimal transformation. If used correctly, Swift connectivity can lead to vast opportunities to drive, innovate, create, and benefit from payment solutions that make your organization stand out. And getting the best out of Swift takes time, energy, and most importantly, expensive technology systems that can unlock the full capabilities of the Swift network and bank integration.
There are two ways of going about your Swift connection. The first one is to build a traditional Swift infrastructure in-house. This option requires significant investment in in-house technology and intellectual capital, and is contingent on the ongoing availability of the requisite on-site technical expertise. Moreover, it will also require your team to keep up with Swift’s complex and constant technology updates and compliance programs, such as the annual CSP audit mandate. Going down this road will ultimately cost your organization valuable time and money that can be better spent elsewhere.
The Solution: A Modern Swift Service Bureau
A convenient option to connect to Swift is to bring on board a next-generation Swift Service Bureau. Swift Service Bureaus comprise dedicated financial technology teams and Swift experts who specialize in helping banks and corporations gain access to the Swift network. Traditionally, Swift Service Bureaus served only one purpose – connecting their client organizations to the Swift network through their infrastructure and APIs.
But as Swift has evolved along with the needs of the banking world, so have the service processes they can fulfill, and the mandates that they require. Today, some Swift Service Bureaus not only provide Swift connectivity services but also a full range of Swift-related value-added services, such as Swift consulting and Swift professional services to help organizations optimize the efficiency, speed, and reliability of their transactions. A few Swift Service Bureaus, such as Axletree, can also help organizations with integration and transformation between their core systems and the Swift network. They can also undertake CSP independent assessments so that organizations may stay accredited through technology updates, compliance requests, and mandated processes that Swift rolls out on a regular basis.
The key features of a next-generation Swift Service Bureau include:
- Cloud-based Swift connectivity with full-functionality
- Use all Swift-Certified messaging interfaces, including FIN, FileAct, InterAct and Browse
- Message integration services that enable any-to-any format translation
- Certified external assessor for the Swift customer security program
- Integration of Swift connection with in-house ERPs and treasury management systems
- Eyes on all of Swifts’ Annual Releases
- 24/7/365 Swift infrastructure monitoring and maintenance services
- Assistance in ISO 20022 migration
- Independent assessor services for annual Swift CSP assessment
- Integration of Swift GPI into the payment workflow
- Expert implementation of Swift g4C
The services provided by a modern Swift Service Bureau extend far beyond establishing and maintaining a routine Swift connection — a modern Swift Service Bureau worth its salt should also provide value-added solutions for efficient and enhanced risk management. As such, even banks and corporations with existing in-house Swift infrastructures can benefit from outsourcing certain Swift-related activities and compliance needs to the right Swift Service Bureau.
Catalyzing Payments Transformation
Outsourcing your organization’s Swift connection to a Swift Service Bureau can catalyze your payment transformation plans and bring additional benefits to the company:
- Freeing up funds: By letting a Swift Service Bureau handle their Swift needs, banks and corporates can save money that would have otherwise been spent on costs of hardware, hiring technical staff, ongoing training, and ongoing systems maintenance. Instead, these funds can be redirected towards improving an organization’s front end, integrating with other PSPs and PSOs, and expanding the functionality of their services.
- Enabling processing flexibility: Message integration services provided by Swift Service Bureaus are critical in enabling banks and businesses to remain flexible in sending and receiving payments. They can continue to transact over the Swift network even if their or their counterparty’s in-house ERP/legacy systems do not support Swift-certified messaging formats.
- Achieving payments transparency: The end-to-end Swift connectivity offered by Swift Service Bureaus unlocks full global cash flow visibility for banks and corporations to help them optimize their payment lifecycles, streamline account reconciliation, and control funds management.
North America’s go-to Swift Service Bureau
Whether you’re experienced or just beginning your journey on Swift, Axletree’s expert, Swift-certified team has the specialized knowledge on all things Swift to help you optimize how you connect with and leverage Swift’s services. Axletree was the first Swift Service Bureau for banks and corporates in North America, the first to receive the SwiftReady Connectivity Best Practice label in the Americas, and the Swift Premier Operating Practice label. We’re also the first Swift-certified Service Bureau that’s been audited by Swift itself in North America.
Since then, we have expanded basic connectivity to now include the above-mentioned integration and transformation solutions, value-added services and consulting, and CSP assessment assistance, providing our clients with peace of mind that their financial messaging operations are robust and resilient. We also provide direct connectivity to payments infrastructure and counterparties outside of Swift, providing similar benefits as mentioned above, through any channel an organization might prefer.
When it comes to Swift, Axletree is trained to deliver solutions that work for the specific use cases and requirements of both banks and corporates.
Get in touch with us today to learn more about how our Swift services can meet every one of your Swift needs.
November 15, 2022
