Swift has been talking up the benefits of Alliance Lite (jokingly referred to by some as ‘Swift on a stick’) for some time and the vendor community is seemingly beginning to get on board with the internet-based connectivity solution, which is aimed at extending the network’s reach via low cost access. One such vendor is corporate actions solution provider XSP, who has recently completed the testing programme for Alliance Lite.
Paul Fullam, senior director of business strategy at XSP, explains why the vendor opted to participate in the testing programme: “Whilst over 50% of our clients license the XSP Swift ISO Messaging module, Alliance Lite brings a low cost, user friendly and powerful value proposition for clients and prospects with low messaging traffic, taking advantage of the Swift network. By integrating the XSP v5 platform with Alliance Lite, we assist our clients further by promoting greater STP in corporate actions processing.”
The selling point for Alliance Lite is around offering quick and easy, low cost connectivity to the Swift network, thus tackling the longstanding criticism levelled at Swift that its offering was prohibitively expensive for smaller players in the market. As evidenced by a number of discussions at Sibos last year, the focus is on getting fund managers and corporates, as well as smaller sell side institutions, to connect via Alliance Lite.
Hervé Valentin, senior business development manager at Swift, explains: “By integrating Alliance Lite with their SwiftReady accredited XSP v5 platform, clients such as asset managers can gain access to the Swift network at an affordable cost without the requirement of additional investments in hardware.”
XSP is therefore hoping to benefit by being enabled to offer Swift connectivity to clients at the smaller end of the spectrum, especially those on the buy side. To this end, Alliance Lite supports the manual entry and display of commonly used Swift messages, through a standard internet browser, as well as the integration with business applications through the AutoClient, a lightweight integration software. During the testing process, application providers such as XSP integrate their products with alliance Lite AutoClient and test their connectivity with Lite AutoClient Testing Services (LATS).
Integrating Alliance Lite with XSP’s corporate actions platform will allow global financial institutions to streamline their processing by leveraging the Swift network to communicate directly with their financial partners around the world, claims Fullam. Some of the benefits include lower processing costs and errors, increased automation and improved STP for this high risk area of operations.
Dan Retzer, managing director and chief technology officer, at XSP, adds: “Swift Alliance Lite eliminates the requirement of the hardware stack and personnel to manage the Swift gateway.”
Given the pressures on financial institutions’ budgets in the current economic climate, vendors are keen to steal a march on their competition by offering lower cost alternatives and this move is in keeping with that trend. Swift is also keenly focused on making its offering more competitive and part of its 2015 strategic discussions will be centred around this topic, according to Swift’s head of securities, Chris Church. “The focus is also on reducing the total cost of ownership (TCO) for our end clients – reducing the Swift bill at the end of it all,” he explains.
“Alliance Lite is an area in which we have lowered TCO by opening up Swift to new entrants. With regards to securities this has included the investment manager community and this will be a focus for 2010. We already have a couple of hundred customers using Alliance Lite and a number of wholesalers are white labelling it,” he elaborates.
The network has also added another new offering recently, focused on reducing the cost of maintenance for Swift connectivity. “Another new offering, Alliance Integrator allows for low cost integration of Swift standards, which means the interface to Swift is much more cost effective,” Church explains. These initiatives will form a key part of the agenda for the next five years.