EuroFinance Geneva - Corporates want SWIFT voting rights
"Bank-agnostic" platforms like SWIFT are being used by corporates to manage counterparty risk, but corporates are still not on the same footing as banks when it comes to voting rights on the bank-owned network.FWith the financial crisis demonstrating the pitfalls of "concentration risk" more companies are seeking "bank agnostic" platforms that enable them to switch providers more easily in order to manage counterparty risk.
The annual EuroFinance International Treasury & Cash Management Conference heard how platforms like SWIFT are being used by some corporates to manage counterparty risk, alongside other measures such as counterparty exposure thresholds, which when breached, altert the treasurer who is then able to make a decision.as to what to do.
But for corporates wanting to move to this "multibank" or "bank-agnostic" model, there are challenges, not least of which, says Gary Bischoping, vice president and treasurer, Dell, is the lack of an agreed standard among banks around things like digital signatures. "If we can get the airlines to share codes and banks don't have the ability to share codes, how far behind are we?" said Bischoping. "We should have a standard electronic signature. That is one of the pain points."
Although the banking community has opened up the SWIFT network to corporates, enabling them to communicate with multiple banks via a single interface, Philippe Hohl, senior treasury back-office manager, Logitech, Switzerland, said a lot of corporates still didn't know what SWIFT was and that corporates were still not on an equal footing with the banks. "They've allowed us to come into SWIFT, now we need to get to the point where we having a voting right," said Hohl.
SWIFT has reportedly established a Corporate Advisory Group, which will enable corporate treasurers to express their views, and we understand that banks are less sensitive than they were a couple of years ago about corporates having more of a say in how SWIFT is governed, although there are bound to be some banks that still find this a difficult pill to swallow. We can expect some announcements around this perhaps at SWIFT's forthcoming Sibos conference in Amsterdam from October 25-28.
Date Posted:6th October 2010