Now, the GE treasury is concentrating on bringing local banks that serve its far-flung subsidiaries onto SWIFT, Burstein reports. "We're doing live communication with 57 banks, and we have 24 more that we are in the process of bringing onboard. That will bring us enormous additional coverage in Asia, Latin America, Africa, Eastern Europe and the Middle East," he says. While GE's ROI has not been calculated recently, it was reported to be 406% in a SWIFT case study published in 2005.

GE's success is helping to draw a crowd. Over 230 corporations are now directly connected to SWIFT–about 35 of them under the new SCORE model and the rest under an older bank-sponsored arrangement, known as MA-CUG (member-administered closed user group). Even more impressive is the pipeline of companies wanting to connect. While SWIFT attracted corporate interest sooner in Europe, "we now have over 40 large corporations in North America in our pipeline," reports Andrew Hazen, SWIFT senior relationship manager.

For Toyota Financial Services in Torrance, Calif., direct access to SWIFT has paved the way to creating a true global treasury. "Our old model of proprietary bank interfaces simply wouldn't work on a global scale," notes Jeff Carter, assistant global treasurer for liquidity, sales and trading. "The only way to get an efficient global treasury is through an interface with SWIFT." So, now, Toyota will parlay SWIFT and its new Wall Street Systems treasury workstation to that efficient global setup.

All Toyota's banks in the U.S. are already reporting through SWIFT, Carter says. "Balance data is waiting for us when we come into work in the morning. There's no more polling or parsing through a workstation. We can now make real-time decisions. Our vision," he adds, "is that all Toyota data going to and coming from all banks and broker/dealers will be via SWIFT, including wires, payment instructions, ACH files, debit and credit advices, bank statements and all our trade data for securities and derivatives."

SWIFT for corporates will usher in a new era of bank competition and lower prices, Carter hopes. "Banks will have to compete on service and rely less on sticky interfaces," he says. "Once we get the independence of the direct SWIFT interface, we'll be set up to deliver our ACH and wire transfers to any of several banks. On any given day, we can use the one that offers the best price or service."

While most companies start with cash management and use SWIFT as a pipeline to collect bank balance and transaction reports, some corporations are using SWIFT to support trading activities, reports consultant Dave Robertson, a partner in the Chicago office of Treasury Strategies Inc. One corporation TSI studied had been getting trade confirmations by fax from its dealers and manually keying them into its treasury system. "They found they could get all their confirmations through SWIFT in an automated straight through process. It's working today," he reports.

Close on the heels of GE in its adoption of SWIFT has been Microsoft Corp. Not surprisingly, Microsoft–like GE–decided to build its own infrastructure to connect to SWIFT. The decision may have meant a slower start, but Ed Barrie, Microsoft's point man on the SWIFT SCORE project, reports exponential progress since the Redmond, Wash., software giant decided to initiate the project in 2005. "

We're working with another four banks right now," says Barrie, who is the group manager responsible for technology and systems used by treasury operations, capital markets and cash management, and "we expect to be communicating with between 25 to 30 banks via SWIFT within the next year, with a goal of bringing prior-day statements into our ERP system. [That way] we can see all cash balances and bank account activity across the company. We want them for every account every day, even if it has a zero balance and no recorded activity," he says. "And we want it no later than 6 a.m. local time the [next] day."

In July, Microsoft started getting MT942 intra-day statements from two banks, a start toward its goal of having every collection account, cash concentration account and investment custody account report intraday statements every day. In 2008, Microsoft will start using SWIFT to initiate wires, Barrie reports.

Now treasury can send wires from just three banks. "If we want to initiate wires from other banks, we have to work through subsidiaries. Soon, we'll be able to do it all from treasury."

But very few companies can take the resource-intensive approach to technology that a GE or Microsoft usually chooses. For most, a decision to join SWIFT will inevitably mean teaming up with a vendor. As Randy Marcrum, co-founder and managing director of Camino Consulting LLC in Atlanta, explains it, a company has two choices if they opt not to build or buy their own connection to SWIFT: You can buy translation middleware to use in conjunction with a service bureau, or you can outsource the entire function to a third party. "There is a tendency for treasury staffs to let their eyes glaze over when they hear about the technical SWIFT message formats and dismiss it as 'an IT thing'," Marcrum says. "But that is a mistake. It can be a very strategic financial issue."

For many companies, Marcrum suggests that starting by outsourcing and bringing the infrastructure in-house over time may make more sense. But the case for using a service bureau is made by Henry Bayard, vice president for strategic initiatives at EasyLink Services Corp. in Piscataway, N.J., a document management and data messaging company. "We like the service bureau model," he says. "There's no large upfront capital outlay. There is no training or hardware maintenance. The technology is completely transparent to us. And it connects us quickly to a secure global network. While we are not a large company, we are a global business." He uses Axletree Solutions Inc. in North Brunswick, N.J., as his service bureau.

While vendors are rushing to help corporations connect to SWIFT, caveat emptor, Marcrum cautions. Some systems vendors try to use SWIFT access to push installed upgrades or sell "complementary middleware," which may be over-engineered solutions, he points out. SWIFT solution boutiques like Volante Technologies Inc. in New York City, often can deliver a workable solution for a fraction of the cost of a large system upgrade or add-on, he points out.

However, the vendors may have a point in pushing the big bite approach. "We've studied the issue," Robertson says, "and found that the rewards are greatest for companies that see what's happening now as a once-in-a-generation sea change and are reengineering their operations and business processes to take full advantage of what they can do with technology in combination with SWIFT."

The real payoff is not the economies of using SWIFT, but what happens to the information after it is received. And that means that the work lies less in developing the front-end connection to SWIFT and more in "integrating your business processes on the back-end to get straight through processing," observes Michael Fossaceca, Bank of America's treasury executive for large North American corporates.

As proprietary interfaces become less important to large corporate clients, banks will have to spend less to support them and will channel investments to more value-added services, predicts Roy DeCicco, senior vice president and industry issues executive for treasury and securities at JPMorgan Chase.

But don't expect a rush to SWIFT, cautions Ray Fattell, senior vice president and head of U.S. product development in HSBC's global transaction banking unit. "Many companies are using proprietary solutions that work well, and they have no interest in changing," he reports.
For example, TreasuryVision, Citigroup's service for aggregating and reporting bank account data, has 75 active users and another 300 in the implementation pipeline, reports Manish Jain, global head of TreasuryVision and identity management. "We have only a few clients that are directly active on SWIFT and a much shorter pipeline."

The benefits of using SWIFT for payments are closely linked to having an effective payments factory, suggests Thomas Bergqvist, the European-based executive vice president of Wall Street Systems. "You wouldn't save a lot by using SWIFT to make 20 treasury payments a day. The exciting payoff comes when you centralize payments and use SWIFT to initiate payments for the whole corporation," he says.

Corporate attraction to SWIFT is also being driven by the still-evolving ISO 20022 XML messages. "The biggest benefit," Sweeney observes, "will come when we get the XML standardized messages. We're hoping that these payment messages will be totally standardized."

Five messages within the ISO 20022 standard are currently being tested in pilot mode. "We expect to go live by the end of the year," predicts Elie Lasker, SWIFT's senior business manager. The ISO messages are more granular, corporate-friendly versions of traditional FIN messages. ISO messages carry "the richer data corporate treasurers look for in a file of commercial payments," he explains.

XML is a critical step on the road to perfect STP. Without XML, messages have to be transformed as they move through different systems, Burstein explains. As a message now passes through banks, it may get reformatted several times. Once everyone transmits "pure XML," there will be few transformations and what comes out will be the same as what went in, he explains. "There is a lot of weight behind the move to XML and a lot of work being done on those standards," he adds.

But more is needed. The current version of XML standards under ISO 20022 does not permit as much remittance information to accompany a payment as the existing NACHA CTX format does, for example, so GE and others are using SWIFT FileAct to send CTX files, while they wait for the day when an XML message can contain the same rich data–or more–as the current CTX, Burstein says.

While the FIN message formats and the XML messages that may ultimately replace them can be precise and universal enough to enable STP, SWIFT FileAct will be useful in the interim. FileAct is a SWIFT boxcar that can carry all sorts of files. For example, you can image checks and send the image to a bank for deposit in a FileAct wrapper, notes Len Schwartz, corporate director for SWIFT corporate access and standards at ABN AMRO Bank. Or you can receive a lockbox transmission or positive pay exception item to view. Companies also use FileAct to transmit files in BAI, NACHA or EDI formats.

Other emerging SWIFT standards could also benefit treasuries. For example, the trade services utility–still in early stages of development–is an electronic alternative to the disappearing letter of credit, explains John Ahern, global head of trade services for financial institutions at Citi. It can do document matching automatically using SWIFT message standards, and open the door to bank financing of trade receivables on a global scale.

The exceptions and inquiries (E&I) message format won't be useful until more banks join the network, but it should allow for quick, automatic resolutions of exceptions and inquiries, using an XML global standard for bank-to-bank or corporate-to-bank messages, says Al Briand, managing director for product management and strategy head for treasury services at The Bank of New York Mellon.

More corporate applications may be coming, the stage is set for rapid adoption. "The technology is there. The security is there," says Axletree Solutions' president Mohan Murali. "Now, the biggest challenge is education."