Business case
Making your business case to join SWIFT involves determining what for you and your organisation are the most pressing business needs and challenges that could be addressed using SWIFT.
Besides costs and benefits that can be quantified, there may actually be a set of additional benefits - maybe harder to quantify - that could actually be key drivers for your project. For instance security (avoidance of fraud, less manual errors), compliance (less control points, less documentation), and improved control over the trade and settlement process are typical benefits that lead investment managers to consider SWIFT.
Calculate your business case for SWIFT
As an investment manager considering adopting SWIFT, ask yourself the following questions.
- Are your trade volumes fluctuating?
Fluctuating volumes make it very hard for institutions to adequately and cost- effectively staff-up to cope with peak volumes. By using SWIFT messaging, you reduce the manual effort associated with trade processing and thus reduce your sensitivity to volume fluctuations.
“Our transaction volumes vary significantly from one day to the next. However, the effort involved in generating our SWIFT-based settlement instructions that are sent to custodians is limited given the high level of automation we have achieved in this area. We therefore barely notice the volume of settlement instructions sent from day to day.”
- Are you using several proprietary terminals?
Proprietary terminals often look like the most cost-effective way of communicating with counterparties. There is however an important hidden cost in terms of training and re-keying data. SWIFT estimates (based on feedback from a number of investment managers) that the cost of a proprietary terminal averages EUR 25,000 per year.
“Before we had SWIFT, we had proprietary terminals all over the office. Staff needed to be trained on all these different systems, and data was re-keyed all day long. Now, we simply have one system.”
- Are you still sending and receiving a lot of faxes?
Faxes are labour-intensive. Even if you are using an autofax facility, your counterparty will still be faced with manual input. This manual input increases the cost and the risk created by fax use. Now that more and more industry players are starting to surcharge for faxes received, there is an increased need to implement alternative communication channels.
“If we were to report everything over fax, we would probably need twice as many people to do this. We have increased our traffic tenfold without really increasing the headcount.”
- Do you need to talk to several different brokers and custodians, and a multitude of other counterparties?
Setting up and maintaining communication channels with a multitude of counterparties is labour-intensive and costly. If they all have their own particular way of communicating, this further increases costs and reduces efficiency. With SWIFT, you can be sure you always communicate using the same language, while adding another counterparty is done without additional effort or investment.
“The cost of SWIFT is insignificant compared to the cost of other more manual messaging means.”
- Is reputation one of the most important assets of your institution?
For most investment managers, reputation is the single most important asset. Risk reduction is therefore key to success. Guaranteed and timely delivery of your instructions and other messages will make sure that your good reputation is not negatively impacted by failing settlements or late reporting.
“Without SWIFT we would certainly need to double the number of operations staff and maybe even more. Fluctuations in business cycles cause problems because you have to hire temporary staff to handle additional volumes. This increases risk and further reduces efficiency.”
- Are you using email or the internet for confidential or time critical communication?
Email and internet are certainly the most frequently used communication channels of this day and age. The need for follow-up, the lack of standardisation and increased risk, however, put an additional burden on your operations staff. Make sure they can
focus on customer-oriented tasks instead of being bogged down by operational issues.
“SWIFT brings intangible benefits as well. By automating the operations processes, operations staff can focus on more challenging tasks. Job satisfaction increases and staff turnover drops.”
- Do you expect your trading volumes to grow significantly in the future?
If you are looking at increasing your volumes, SWIFT will enable you to automate, so that doubling your volumes does not necessarily mean doubling your staff. Automation is the key to success for increased volumes. SWIFT will help you drive automation in your organisation.
“The scalability we get through SWIFT automation is huge. We would not have been able to support our growth and stay in this business without it.”
If you answered yes to any of the above questions, SWIFT can help you. To find out what your costs and potential savings from joining SWIFT will be, contact the SWIFT Sales representative in your region. They can work with you to calculate and compare the costs of your existing environment to what it would be if you joined SWIFT.
If you are already an SWIFT user, SWIFT can work with you to find out what additional costs (if any) you will incur, and increased potential savings you can attain, through greater use of SWIFT.
 |
|