SWIFT to expand business in BD

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Mohammad Ali | Published: August 20, 2014 00:00:00 | Updated: November 30, 2024 06:01:00

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SWIFT, a cooperative society facilitating secure financial transactions worldwide, looks forward to expanding its footprint in Bangladesh in a bigger way, facilitating development of a strong and sustainable financial industry here.
 "Through collaboration with the local industry, we are looking forward to continue and expand our support for a very strong financial industry," Alain Raes, Chief Executive of the EMEA and Asia Pacific of SWIFT, told the FE in an interview recently.
Mr Alain was in Dhaka to attend a programme celebrating 20 years of SWIFT's collaboration with the Bangladesh financial industry.
Headquartered in Belgium, SWIFT (Society for Worldwide Interbank Financial Telecommunication) is owned by the financial institutions; it supports the institutions worldwide to send and receive financial transaction-related information safely.
Some 56 Bangladeshi financial intuitions-- mostly banks and one or two broker dealers-- are currently using the SWIFT network, he said, adding that about 8 million transactions were received and sent by the local financial institutions under the SWIFT network last year.
Nearly 32.7 per cent growth was recorded in the country's foreign exchange transactions through the SWIFT network because of mainly increase in the payment of trade finance.
 "About 99 per cent of the local financial institutions' transactions through SWIFT are cross-border, and more than half cross-border transactions (sent by the institutions) is relating to the trade finance," Mr Alain said.
Mr Alain strongly recommended the local financial institutions to use single network to settle both the domestic and cross-border financial transactions, saying that it would increase their efficiency and facilitate to build a strong financial industry.
 "A payment is a payment whether it is domestic or cross-border. So, why the banks will use different platforms to do exactly same thing when they can apply same 'proven' system?," he said, adding that single network will simultaneously enhance efficiency and ensure cost-effectiveness.
The SWIFT network is capable to handle all types of transactions that include domestic and cross-border, low value and high value. At present, "Bangladesh is using a little fraction of all functioning of SWIFT," said Mr Alain, who is a Belgian and joined SWIFT in 1990.
Regarding security of SWIFT transactions, Mr Alain said, "We built our security over the long time in international experiences. And using same protocol for security issue, the banks can also ensure their efficiency, cost-effectiveness and sustainability; different protocols for same service will bring no value, rather add cost and inefficiency."
 ".. it will also indirectly increase attractiveness of the local financial industry to rest of the world; because the international financial institutions are clearly looking for better efficiency, automation, standard and security," the official said.
In order to keep developing the economic sustainability in the country like Bangladesh, "strong financial industry is needed"; a key criterion to ensure it is to have robust, solid and efficient financial infrastructure, which exacts, among others, standard automation.
The central banks and also the financial institutions were looking forward to modernise the financial infrastructure; the network and security of SWIFT will help them enable to develop the strong and sustainable local financial industry.
Regarding the cost of using SWIFT network, Mr Alain said, "The price of SWIFT services was designed in such a way that the more transaction volume will go up, the less you pay for the transactions.
There are about 10,000 banks (including central bank), other financial institutions, corporations and stock exchanges connected with SWIFT in 212 countries.
 "SWIFT network basically collects data regarding the financial transactions from one bank and vehicles it to another bank safely, securely and automatically," he said.
Aside from automating the high-value cross-border payments, its main service, SWIFT also facilitates other types of financial transactions such as asset, trade finance, securities and remittance; its services were expanded to other business segments namely broker dealers, asset managers, stock exchanges.
Responding to another query, Mr Alain said, "We are not looking for maximizing our profit, rather for maximizing the research, efficiency and skill of our members." Though it is a non-profit cooperative society, "We must keep making money, because we need keep investing in our infrastructure, systems, network," and meeting other necessary expenditure, he added.
 "SWIFT Member and User Group Bangladesh", the Bangladesh part of SWIFT, was re-cast recently by adopting a constitution, under which its first ever polls was held electing a committee led by a bank's CEO.
About the new committee, Mr Alain said that they were looking for a representative and single body, which could represent interests of the Bangladesh financial industry.
He cited four main areas that should be part of the agenda of the new committee. These are: supporting new domestic financial infrastructures, connecting more corporate bodies with SWIFT network for expanding corporate automation, helping the banks to be compliant and reduce their cost, working on the trade finance coincide with changes of world trade finance.