SWIFT eyes expansion in Chinese market

SWIFT is a global provider of secure financial messaging services. By enabling its customers to automate and standardize financial transactions, SWIFT can help companies lower their costs, reduce their operational risks and eliminate inefficiencies in their operations.

As more and more Chinese banks increasingly focus on their message security and IT systems, China Daily reporter Hu Yuanyuan spoke with Lzaro Campos, who was named Chief Executive Officer of SWIFT in April.

SWIFT currently provides secure, standardized financial messaging services and interface software to more than 8,100 financial institutions in 208 countries and territories, according to the company. Its customers include banks, broker-dealers and investment managers, and corporate and market infrastructure providers in the fields of payment, treasury, securities and trade.

Q: What have you identified as your most urgent tasks, particularly in China-related businesses, since becoming SWIFT's CEO?

A: My primary issue is to decentralize and reorganize SWIFT to give each of the three regions - the Americas, Europe, Middle East and Afirca (EMEA), and Asia - more control over the entire customer experience. Each regional executive would be responsible for all of the relationship management activities, commercial development activities, customer support, and local and regional market management.

I do not want any customer to be waiting for a headquarters' decision, so I am putting decision-making as close to the customer as I can, hoping the regions will be more active and effective at letting us know what customers really need.

Q: Will that reshuffle strengthen your presence in China?

A: Yes. In fact, China is the only country in which SWIFT has three representative offices. We have been in Hong Kong for 27 years. We set up a representative office in Beijing in 1998, and we started an operation in Shanghai late this year.

Hong Kong will serve as our regional hub, where we have strong technical and standard resources. As of 2009, we will have an operational command center in Hong Kong. So, for a few hours of the day, the entire SWIFT global network will be managed out of Hong Kong. In other words, more and more resources are coming to China.

Q: You said before that in addition to the payments business area you would like securities, forex and derivatives messages to be your new growth engines. Are these areas also your business focus in China?

A: Securities messaging is now part of our mainstream business. It's not only a very important part of our business, but the one that is growing rapidly. If our objectives for simplicity and cost-effectiveness are successful, we will see a significant number of niche players joining SWIFT. So, I can see growth in the securities business both in transactions and market share, and also the types of players we are able to attract. For the Chinese market, securities firms are also the new customers we are targeting, especially when China's stock market is seeing a more bullish-than-ever period.

In fact, securities traffic now makes up almost half of SWIFT's business, helped by the recent volatility in the stock markets. SWIFT is no longer just a payments messaging company but also is a transactional business involved in all asset classes that banks trade in. It is from securities, forex and derivatives messages that SWIFT's future growth will come.

Q: How about your development in the Chinese market so far? Who are your major rivals?

A: In China, we currently have 208 financial institutions, mainly banks, connecting to our system; 110 of these are foreign banks and the remainder are Chinese domestic financial institutions. To give you a comparison, in the United States, which has the largest amount of message traffic, we currently have 600 financial institutions using SWIFT. So, I see that our growth and development in China is quite smooth, and there is the scope to do more for Chinese domestic financial institutions. We would like to double the number of financial institutions using SWIFT in China over the next two to three years, as China's financial sector becomes increasing international.

The biggest threats to us are telecom companies deciding to set up their own systems with banks.

Q: Where does China stand within your international business portfolio?

A: As a country, China is No 26 in terms of financial messages sent. In commercial trade, China is No 1 in terms of incoming traffic, which means China receives more trade messages than any other country in the world.

(China Daily 11/28/2007 page15)