Bank of China's London subsidiary has automated a paper process for SWIFT messages and reduced paper consumption by 95%.
Like most international banks, Bank of China in London sends and receives thousands of interbank SWIFT messages to and from other financial institutions every day regarding time-sensitive transactions. The bank used to print and distribute roughly 3,000 interbank messages daily to internal departments, which was an operational risk and costly in terms of manpower and paper consumption, requiring approximately 50 pounds of paper per day. Each department kept its own paper records of the messages and manually filed them. It was difficult and time-consuming for employees to trace individual messages, or to analyze them for trends for risk and compliance needs.
The bank eliminated this paper-based process by moving its interbank messaging to an IBM system comprised of IBM Informix software and IBM Business Partner Centric iSolutions software running on IBM System x servers. Bank employees can now monitor and analyze messages using a simple browser, reducing paper consumption by 95 percent, or more than 18,000 lbs. of paper annually.
Bank of China employees in London now have access to messages through an online search capability, allowing them to monitor transactions as they are sent and received by the bank. The electronic routing and monitoring capability, along with a search engine, allows the bank to ensure transactions are processed in the proper settlement time period. Banks can face stiff penalties or high overnight interest rate charges if messages are not responded to in the same day.
"The improved access to information has been key in helping us meet compliance regulations and reduce costs," said Stephen Hinds, COO of Bank of China's London branch and subsidiary. "The availability of information across all our departments has led to further benefits such as reducing our paper consumption by 95% and allowed us to make more timely and accurate decisions."
Now all Bank of China employees in London in the loan, trading services, banking, clearing and IT departments have role-based authenticated access to their appropriate daily interbank transactions through a browser-based application. This has allowed the bank to eliminate the need to print out hard copies, which would add up to about $19,000 a year on paper alone.