The financial landscape looks very different one year on from Sibos in Vienna, where the first day – coined ‘Sibos Monday’ by SWIFT CEO Lazaro Campos – was overshadowed by Lehman Brothers’ collapse. Although no more banks have been allowed to fail, some of the biggest names have dropped from sight after being swallowed by another – such as Bank of America’s UD$50bn purchase of Merrill Lynch, which was also announced on that fateful Monday.
“It was a very interesting week for Sibos to be convened,” says Marilyn Spearing, global head of trade finance and cash management corporates at Deutsche Bank and chair of SWIFT’s Corporate Access Group. “The impact of events that transpired has hit the corporates now fully, in terms of credit availability and price, across traditional means of access as well as trade. Plus, obviously, there are certain industries that are feeling the full recessionary brunt. What we are seeing is what we have always called in cash management a counter-cyclical activity – when the economy is down, treasurers look to cash solutions even more.”
SWIFT, the Brussels-based bank financial messaging standards consortium, hosts its user conference with a triennial rotation between the major regions: Americas, Europe and Asia. This year it will be held in Hong Kong, known as Asia’s world city or the ‘Big Lychee’, from 14-18 September. The event is seen as the premier conference of the year from the back office payments industry through to the front office trading systems, covering payments, securities, cash management, trade services, foreign exchange and money markets, and derivatives.
The conference’s high esteem stems from its breadth and depth in terms of industry knowledge, as well as the ability to participate in and learn from debate around the issues facing financial institutions and corporates. The opportunity for high-level networking is also a big draw.
Already over 1800 people have registered, 163 companies are committed to coming and 95% of the exhibition hall is sold. Wim Raymaekers, senior product manager at SWIFT, says that registration was only down 61 attendees compared to last year, but he warns that the number this time will be lower in comparison with Vienna, which saw 8114 attendees registered, 240 companies exhibiting and 80 firms that had specific products for corporates.
When Sibos is in Europe, it sees a bump in numbers, mainly because it is SWIFT’s home turf, but this year the main negative effect on numbers will be the financial crisis.
“In terms of attendance, my expectation is that there will be less corporates than last year,” Raymaekers says, citing the financial constraints that many firms are under, such as travel bans. But he is optimistic that Sibos will attract quite a number of prospective corporates from the Asia-Pacific region.
Brian Wedge, executive director, treasury services at JPMorgan, shares this optimism. Based on a continued increase in the numbers of large corporates asking about or implementing SWIFT, he expects that to translate into an increased number of Sibos attendees. “It may be that multinationals, not headquartered in Asia-Pacific but who have adopted SWIFT, will be represented by their local treasury staff,” he says.
Attempting to intersect with the general issues facing corporates and banks alike, the big issue debates this year in the main Sibos forum will be:
- Sibos one year on – leading through uncertainty.
- The Asian century – implications for the financial industry.
- Will transaction banking be the engine for sustainable growth?
There will also be a number of sessions dealing specifically with Asia, looking at country-specific market developments in China, Japan and India, as well as progression towards a regional economic bloc – Asean. Plus, two of particular interest to corporates coping with the downturn in global trade: ‘Demand or supply: will the shortage of trade credit reverse globalisation?’ and ‘Financing the supply chain in Asia: the weakest link?’.
Two-day Sibos Forum for Corporates
This is the third year in a row that Sibos will include a corporates’ forum – on Tuesday 15 September and Wednesday 16 September – bringing together corporates, the financial community and vendors to address issues in the corporate-to-bank space. In Vienna, 630 attendees signed up for the forum, around 32% of which were corporates.
Although corporates only made up 4.3% of the attendees in Vienna, SWIFT is determined in its efforts to include the corporate community. Currently 440 corporates are connected to SWIFT through the Standardised Corporate Environment (SCORE). The corporate forum is aimed at corporate treasurers, regional treasurers, treasury managers, finance directors, global bank cash management and transaction services managers, accounts payable and receivable managers, as well as existing SWIFT corporate users or corporates seeking to optimise their communications platforms with their financial institutions.
The corporate forum sessions are:
- Demystifying SWIFT: why, how, when.
- The financial crisis: challenges and opportunities for the corporate treasurer.
- Corporate case studies – Asian corporates.
- Providing value to your corporate clients.
- Your questions – answered: one to ones book in advance or arrange onsite.
- Corporate requirements for collaborative bank solutions -‘Corporate Treasury 3.0’.
- Corporate case studies – global implementations.
Raymaekers explains that SWIFT tries to cater to two corporate audiences. “One interest group is existing corporates on SWIFT, the experienced users, and they will get something new. The other group is prospective corporates, whose main question is still what ‘SWIFT for corporates’ is all about. These central treasury centres service multiple legal entities within the group, and deal with multiple banks and communication systems, and they ask ‘can’t this be easier, better and cheaper?’ They wonder if SWIFT can be the one gateway to all their banks,” he says.
Deutsche Bank’s Spearing agrees that the forum needs to be of value to both experienced corporates and the novices. “The Sibos forum is very broad – it has always been both an educational meeting as well as a venue for industry debate. The corporate forum is going to be similar and based on the current stage of each corporate.”
That is why the forum takes the corporate from the start of how does one connect, right through to how does it benefit. Spearing points out that one of the sessions is even called Corporate Treasury 3.0, copying US university courses where 101 is the very basics. “The forum will take people right from the start of how do you connect, and what is the value of this, right through to how do you get the efficiencies into your shared service centre and liquidity models, and be able to benefit at the core of your cash management activities in your treasury. So the theme will be the start-to-finish how might I get value from this?” she said.
“Everyone, whether corporate or bank, is under cost pressures and what will draw them in is answering the question ‘where does this fit in my master plan?’,” she adds.
JPMorgan’s Wedge says: “I think the first main theme will be continuing to ‘get the word out’ about how corporates can use and leverage SWIFT as a non-proprietary channel for bank communications. The second will be about how SWIFT and its network can and should be extended to address the specific needs of corporates.”
For the more experienced corporates, Spearing believes that one issue that will be discussed at the forum will be around the value-adds for the SCORE model and where will it go from here – corporates need to try to influence this process.
Another discussion area will be around the progress of Alliance Lite, which is the ‘cheap and simple’ connectivity option launched at last year’s Sibos. At the recent Universwiftnet in London, hosted by SWIFT, HSBC and UTSIT, the first company to use Lite, Fenice, was very positive. The low cost flat fee is attractive for corporates, which have always complained that they are priced out of connecting to SWIFT, but another big plus was the implementation: Fenice claimed that the USB stick solution was rolled out in one week with banks already using FileAct. The intricate and complex technical set-up of SWIFTnet has always been a bugbear for corporates.
What’s always popular at Sibos are case studies – and Raymaekers assures all attendees that these will make up a significant part of the forum.
Asia – Regional Specific Issues
This is the second time Sibos will visit Hong Kong: the first was in 1991, 18 years after SWIFT was born and 13 years after the first Sibos. SWIFT’s Raymaekers reports that out of the 440 corporates on SWIFT, about 10-12% are based in Asia – the likes of Samsung and Panasonic, but also multinationals, such as Nestle, Daimler and Shell, their Asia-Pacific entities and regional treasury centres. SWIFT is makinga a concerted effort to increase its presence by having a dedicated person in Asia, and the consortium is seeing a good response in terms of banks. Raymaekers believes that it is the corporates pushing their banks to offer SWIFT that is making the banks sit up and take notice.
When asked if there were regional-specific issues, Raymaekers thinks that the overarching issues for corporates aren’t much different from anywhere else – they need to know where their money is. “We met with a large multinational corporate in Japan that has about 40 units that represent 90% of their business. But those units operate very independently; they each get statements from their banks and they feed them into a system, such as a spreadsheet. So they may have visibility of their working capital but the central treasurer may only get a full picture once a week – in the current economic environment, that is no longer acceptable.”
Spearing believes that one area that is different about the Asia region is trade. “There are huge volumes of trade that are still happening and in fact intra-regional trade has sustained fairly well, given the overall declines globally. Therefore, there could be higher interest from the corporates in terms of SWIFT’s use of the SCORE model and how it could facilitate trade transactions. This is a particular area that could come to the fore.”
Addressing issues that Asian corporates specifically may bring up at this Sibos, JPMorgan’s Wedge says: “I expect that the issue of support for non-Latin character sets will be one of the issues that Asia-Pacific corporates will raise. This in turn will probably lead into discussions of FileAct and ISO 20022 standards – which can support such character sets.”
First Time Corporate Attendees
For those that have yet to experience Sibos, it can be a very overwhelming – but extremely rewarding – experience. Remembering her first Sibos, Deutsche Bank’s Spearing says that corporate attendees need a very clear idea of what they want to achieve and would benefit from booking appointments ahead of time. “It is a fantastic forum and you can achieve so much by having a clear idea of the top software providers or top banks that you want to sit down with and have a concentrated discussion. Each of these providers will have many content specialists at the event.”
“An additional pointer is to really use the networking that is available because this conference covers an enormous range of issues, including trade, cash, securities, both globally and regionally, and then the regulatory world as well,” she adds.
Wedge agrees, particularly with regards to the networking and the global experts on hand, and adds: “Finally, I would always advise any Sibos attendee to bring a good pair of shoes as we all spend much more time on our feet than we do back in our offices.”
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