The exceptions and investigations (E&I) platform introduces new message types to automate the processing of errors in payment instructions. The pilot of the platform was completed in May and the system went live on 8 September.
Eleven new banks and two corporates have now joined the five pilot banks as early adopters of the platform. Together they represent around 24% of the SWIFT payments volume. ôThe coverage is particularly strong in the US where the early adopters account for 30% of all US dollar clearing volumes,ö says Catherine Banneux, the person in charge of SWIFTNetÆs E&I solution. ôThis might not be enough to allow us to migrate from the MT message to MX but I would say it is a critical mass and is certainly enough to encourage other people to do something about it.ö
At Sibos 2006, early adopters have been explaining to other banks how they are now exchanging information with their clients in a more timely manner. Proponents of the E&I solution say that it offers recognisable business benefits because handling enquiries and errors in payments transactions is a costly and time-consuming game. The feeling is that unless banks can bring these costs down, they will be unable to maintain their profit margins into the future.
When Swift first looked into the world of error handling by cash management banks back in 2003, it found that between 1% and 2% of all payment instructions give rise to some sort of exception. And only 4% of these enquiries are being resolved via automatic means. ôWhen you consider that 57% of queries and investigations could be automated, there is clearly a big efficiency gap,ö says Banneux.
She says it is too early to determine exactly how much money early adopters are saving by implementing the platform, the fact that they have made a business case for the solution indicates that it has significant benefits. ôThese days there are so many IT projects competing for attention within banks, so when a solution like E&I rises to the top of the IT budget, it clearly says something. I reckon it will be one year before we get a clear demonstration of the cost savings.ö
At a session dedicated to E&I at Sibos 2006, attendees estimated that by the end of 2007 a total of 40% of payment volumes would be using the platform. ôSome are estimating that it will be even higher,ö says Banneux.
She says that over the next 12 months SWIFT plans to make new announcements about the next stage in the E&I evolution. This might include the extension of the platform to cover lower value payments and possibly its application in other industries such as trade finance, cheque processing and securities.
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