If you use 10s or 100s of banks, a SWIFT connection direct or via your TMS provider or  a service bureau is automatically cheaper than H2H? Not necessarily, it all depends on the corporate’s particular set up, their traffic volumes and the service bundle from their transaction banks. 

Most, if not all, corporate treasury departments are trying to reduce the number of banks they use. Although this is increasing slightly where corporates are needing to have a ‘backup’ bank for key countries/types of traffic, nevertheless, most corporate treasuries are reducing the number of banks they use.

Discussion at the ACT Annual Conference in Liverpool last week on H2H v. one SWIFT connection showed that the key questions for corporate treasury departments and electronic banking connectivity suppliers need to consider in making this choice include:

• number of high volume/key banks?
• number of low volume/occasional banks?
• in security terms, how important is having just one bank connectivity channel to your management?
• how critical is being bank agnostic to your management?
• are any of the high volume banks offering special deals or extra services in their H2H service?
• if a corporate uses a H2H service how will they securely control and deliver their files to the bank because banks don’t accept liability for the file until they receive it?

The general conclusion was that, if you have (or will have) some 5-6 high volume banks, H2H connections are worth considering, particularly if the bank is offering attractive terms and other services, for the high volume banks and SWIFT for the rest. 

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CTMfile take: SWIFT is not always the most cost effective solution. Don’t forget, SWIFT figures show that in 2015 only 45% of Fortune 500 corporates were connected direct to SWIFT. H2H must make sense for many of these large corporates.