The Bank-to-Corporate Connectivity Market: A Market in Flux

by Gareth Lodge, April 9, 2013
Industry Trends
Global

Abstract

Corporates, driven largely by the global economic crisis, have been increasingly demanding both more and improved treasury and payments functionality. Corporates today are seeking better and faster access to accounts, and a deeper and more nuanced understanding of their liquidity positions.

Many corporates have larger and more complex treasury requirements than most banks. Highly dependent on their banks, corporates have traditionally relied on bank-supplied software to connect to their treasury functions. As with much of banks’ IT software, these connectivity options have not only been largely proprietary to each bank, but often vary in functionality and delivery format. This report, The Bank-to-Corporate Connectivity Market: A Market in Flux, reflects on the dramatic change going on in the traditionally staid world of bank-to-corporate connectivity.

“Many banks know of Swift service bureaus, yet surprisingly few have a strategy around them,” says Gareth Lodge, Senior Analyst with Celent’s Banking Group and author of the report. “Celent estimates that 80% of all corporates connecting to Swift are choosing to do so via one of these bureaus. And with Swift now offering a fully scalable solution, and entrants offering alternatives, banks simply cannot afford to not be more proactive in this space.”

This report looks at the options a corporate has, many of which are from commercial organisations. It then asks whether this is a good thing for banks because it removes a burden, or whether it may disintermediate banks from their customers.

This 28-page report contains seven figures.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

Introduction

3

The Market for Corporate Swift Connectivity

4

 

Connecting to Swift Is Not a New Phenomenon

5

The Corporate Swift Market is Growing Rapidly

7

What Is a Swift Service Bureau?

9

 

Barriers to Using Swift

9

 

It Is Rarely Just One Bank

9

 

Not Just One Standard

9

The Bureau Proposition

10

 

Basic Bureau Proposition

10

 

Extended Bureau Proposition

11

 

Advanced Bureau Proposition

12

How a Corporate Chooses a Bureau

13

 

Commercial Viability

13

 

Governance and Risk

13

 

Not All Bureaus Offer the Same Services

14

 

Location Is Not an Issue

14

This Just in …

15

 

Alliance Lite2

15

 

SAP Financial Services Network

15

 

Waiting in the Wings?

17

The Path Forward

18

 

Disintermediation or Focusing on Core Skills?

19

 

Further Investment in Proprietary Software?

19

 

Front End Portal Investment: Who Is the User?

20

 

Risk into the System?

20

 

What Are Bureaus to a Bank?

20

 

Swift, Or Not Swift? Or Both?

21

Leveraging Celent’s Expertise

22

 

Support for Financial Institutions

22

 

Support for Vendors

22

Related Celent Research

23

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