Pioneers like GE, IBM and Microsoft built and maintained their own communications infrastructure for connecting directly to SWIFT. But now most companies that join SWIFT outsource the complex noncore activity of running an electronic post office and are choosing a service bureau to do it for them.
Roughly 70% of corporate SWIFT joiners choose a service bureau to avoid the high upfront investment and ongoing operations costs of maintaining their own SWIFT connectivity infrastructure, claims Mary Ellen Putnam, vice president of the international business unit at one prominent service bureau, Las Vegas-based BankServ. "About 80% of the SWIFT costs are associated with having to dedicate resources to implementation, disaster recovery and upgrading the system," Putnam says. "A service bureau can help eliminate 50% to 60% of this cost."
The focus for most treasury shoppers will be finding a service bureau that offers the value-added services they want. Expect standard connectivity from any SWIFT-certified service bureau and shop for value-added services and maybe price, advises J.P. Morgan's Wedge. Value-added services include consulting, format translation and some degree of business functionality such as reconcilement, he notes. Service bureaus may also offer translation to get data into and out of XML, he says.
Many service bureaus are independent, but others are adjuncts to a core business like consulting or treasury software. SunGard, for example, packages its service bureau with its treasury workstations. Most of its service bureau clients also use SunGard software, Wimley reports, although SunGard can and does sell the service to a few companies that use other treasury workstations.