The financial messaging cooperative is able to offer a global, 10 percent rebate on fees collected last year.
The Brussels-based financial messaging cooperative SWIFT will be issuing a global, 10 percent rebate on the fees it charged for messaging last year, and predicts that it will be returning approximately €32 million ($34.5 million) to those organizations using its services.
The rebate for 2015 represents “SWIFT’s continued commitment to the global banking community,” said Yawar Shah, chairman of SWIFT, in a prepared statement.
“In addition to the 10 percent rebate, SWIFT users will also realize additional cost savings over the next five years in the form of new structural price reductions,” Shah says. “It is through these strategic pricing programs that SWIFT continues to reduce costs for users and return the benefits of its economies of scale.”
The 10 percent rebate is in addition to the 2015 discount for high-volume connections, “which we estimate to have totaled €30 million [$32.3 million],” according to Francis Vanbever, SWIFT’s chief financial officer, in a prepared statement.
“In 2010, SWIFT set out a multi-year strategy to cut message prices in half by the end of 2015,” Vanbever says. “We already reached our price reduction commitment at the end of 2014, one year ahead of schedule. By the end of 2015, the total price reduction over the 5-year period reached 57 percent.”
At SWIFT’s Sibos convention in Singapore last year, SWIFT officials said that they knew the SWIFT2015 strategy would continue to yield more price reductions. The five-year effort took aim at the cooperative’s pricing for its messaging services and beat expectations because of strong traffic growth, internal cost controls and pricing schemes, paving the way for the accumulated price cut.
When the effort began in 2010, the cooperative stated that it wanted price reductions ranging from 30 percent to 50 percent to be implemented over five years. When SWIFT hit its goal of a 50 percent reduction in 2014, it was across all of SWIFT’s messaging services.
In addition to the ongoing price cuts, SWIFT increased its FIN traffic by 8.4 percent last year, “ending the year with a new high of 6.1 billion messages,” according to SWIFT. The FIN message type (MT) is SWIFT’s core store-and-forward messaging service used by more than 8,300 financial institutions across 200-plus countries to exchange financial data.
The increases in traffic during 2015 also impacted SWIFT’s interactive messaging service InterAct, which grew by 27.3 percent, officials say. The FileAct file transfer service, typically used to exchange batches of structured financial messages and large reports, grew by 3.7 percent, according to SWIFT.
For SWIFT’s new five-year plan, SWIFT2020, the cooperative will be investing in its core messaging platform and making investments in existing services.
The plan also features a “long-term, structural price reduction program” slated to get underway in January 2016. “This is the fourth strategic pricing plan SWIFT has introduced to the community in the last 15 years,” according to SWIFT. The new plan is targeting a 30 percent to 45 percent price cut by the end of December 2020.
The SWIFT2020 price cuts will be primarily aimed at messaging services, “although we will also consider targeted actions for non-messaging services,” a SWIFT spokesperson told FTF News in October.
SWIFT provides a communications platform, products and services to connect more than 10,800 banking organizations, securities institutions and corporate customers in more than 200 countries and territories, officials say. SWIFT officials also work with other industry participants on market practices, standards and issues of mutual interest.
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