Financial messaging co-operative SWIFT has proved that user ownership and governance can still pay well. With message traffic grew up 9.5% to a total of 2.5 billion messages in SWIFTNdet FIN, the core store-and-forward messaging service, 2005 revenue climbed to Euros 559 million.
SWIFT says the growth has permitted a rebate for the fourth year running. The Brussels-based co-operative says the rebate of 7% of FIN revenue is worth Euros 23 million to customers, and a mid-year price reduction of 8% is worth Euros 14 million. SWIFT adds that it is on track to meet its pricing challenge set in May 2001, to reduce the overall price of SWIFTNet messaging by 50% between 2002 and 2006.
We delivered robust financial and operating performance in 2005 against a background of transformation, says CEO Leonard H. Schrank. We completed the migration of the SWIFT community to SWIFTNet, our new secure IP-based messaging platform and network, adding value and functionality for our customers. We began work on initiatives that will broaden and deepen our reach, including the Trade Services Utility, now in pilot mode, and enhanced corporate access through existing and proposed new models. SWIFT is playing an important role in providing standards and messaging for the Single Euro Payments Area (SEPA) and the TARGET2 RTGS (real time gross settlement) system for Euro zone countries. Under a mandate of the European Commission, we coordinated industry input to the Giovanni initiative to establish standards for a common communication protocol for securities cross-border clearing and settlement in the EU.
Schrank says the robust revenue performance did not prevent SWIFT paying attention to its costs as well. Our strong financial results mean we are in a good position to fund future growth and development, adds CFO Francis Vanbever. We have reduced our recurring cost base by 10% over two years, freeing up resources to invest in new initiatives.
Yet Schrnak says SWIFT is actually recruiting people rather than cutting jobs. We are looking to make important investments this coming year, he says. Many new positions will be based in Belgium.
SWIFT notes that, based on its 2005 messaging usage, Belgium has been promoted to the top six SWIFT countries. As a consequence, Belgium is now entitled to nominate two Board members. In 2005, Belgium sent 148.7 million FIN messages or 5.9% of SWIFTs total FIN traffic, an increase of 19.2%, driven mainly by the expansion of its large banks and securities houses.