The Central Bank of Swaziland (CBS) has contracted JSE Securities Exchange-listed Global Technology to install an SFI (Standard File Interchange) Bulk Clearing Switch to automate clearing and settlement processes for the new Swaziland Automated Electronic Clearing House (SAECH) in a deal worth more than R2 million.
The system was chosen from among 10 competitive products.
CBS is the banker to the Swaziland government and other commercial banks. The contract forms part of a major systems upgrade in progress at CBS to automate and improve its systems to provide a better service to its partners and clients and reduce reliance on the South African financial backbone.
Global Technology has also implemented the Globus core banking system at CBS. The SFI Bulk Clearing switch interfaces to Globus and to Swaziland`s commercial banks` systems to update customer accounts.
CBS has formed SAECH together with the five other commercial banks - Absa, FNB, Nedcor, SwaziBank and Standard - all of which will co-operate in the running of the clearing house. The live site will be at Matsapha, hosted by Standard Bank, and the backup site in Mbabane, hosted by SwaziBank. Each clearing member bank will initially be connected via dialup lines, possibly moving to dedicated lines as volumes increase.
The system is expected to go live end of October. "This project brings the Central Bank of Swaziland into line with its regional Southern African Development Community (SADC) counterparts," says Benson Dlamini, IT director at CBS. "Our mission is to ensure the maintenance of Swaziland`s financial stability. The SAECH project will enable this by improving Swaziland`s clearing and settlement processes, while reducing the risk of error and fraud. SAECH will increase liquidity by enabling banks to settle their forward positions every day, thereby avoiding a build-up of net positions."
Dlamini says the SFI bulk clearing switch is expected to deliver all the key benefits of business process re-engineering and the related cost savings. The system will reduce human interaction with the clearing and settlement process, speeding up processes and eliminating errors. It reduces the clearing cycle between banks from the current situation of seven days to a few minutes, converting Swaziland from a physical, manual, paper-based settlement environment to a virtual, seamless, paperless one.
"Our long-term strategy is to integrate this to a much broader national project including real-time gross settlement (RTGS).
"We sought a switch with the ability to handle single and multiple settlements, and ease of use, ease of customisation, excellent security, scalability, flexibility, good local support, and easy interface to other systems," says Dlamini. "The SFI bulk clearing switch provides all things, and offers the best value for money. It is simple but it has all the functionality required by clearing and settlement organisations."
Dlamini adds that local availability of support was an important factor in the buying decision.
"SFI Bulk Clearing Switch enables virtually any organisation to centralise payments and clearing," says Global Technology`s Alec Jeffery. "This can be done on a regional, national, corporate or customer level to enable better financial control and management. "It has the added cost benefit of having being developed in SA."
The system adheres to internationally acknowledged best payments and switching practices. There are over 40 SFI users worldwide: two in Australia, two in the Caribbean and the rest in Africa. It has been written to run as a client/server application on Windows NT or Unix.
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