BNP Paribas is to use SWIFT’s Value Added Network (VAN) solution to connect to the Target2Securities (T2S) single settlement engine in Europe.
SWIFT is providing connectivity to the T2S platform, which is due to be introduced in a couple of years, alongside rivals such as the 4-CentralBank-Network (4CBNet) offering from SIA and Colt. BNP Paribas says it has gone with SWIFT for a number of key reasons, principally because the large European custodian bank saw it as offering the most reliable and resilient infrastructure in its assessment.
The two parties also have a long-standing good working relationship which has also been cited as a key reason why the bank intends to use SWIFT for communication with T2S, with ease-of-integration expected to be relatively simple versus other available options. The ISO 20022 messaging standard envisaged should, however, ensure harmonisation whatever option is chosen.
Thirdly, and perhaps crucially in terms of the contract award, as a major SWIFT user BNP Paribas is hopeful of getting a good volume price for T2S messaging as part of its SWIFT bundle.
Looking ahead international central securities depositories (ICSD), such as Clearstream with its global issuer hub and Euroclear will also have connect to the platform ahead of its 2015 launch.
Commenting on the BNP Paribas deal, Alain Raes, chief executive for Europe, Middle-East and Africa (EMEA) and Asia Pacific at SWIFT, said: “We are delighted to see this latest development in our relationship with BNP Paribas. This agreement shows the value of SWIFT’s VAN solution for T2S for securities services providers. We look forward to supporting BNP Paribas and all our customers during the transition to this new European settlement platform and beyond.”
According to Alain Pochet, head of clearing, custody and corporate trust services at BNP Paribas Securities Services, the bank connect directly to T2S to reap its benefits and pass them on to their clients. “We will build our services for the T2S environment on the strongest foundations,” he added, before concluding he is confident that the SWIFT T2S connectivity solution is the best choice for in terms of resilience, reliability and cost.