SWIFT to deliver a 57% price reduction by the end of 2015
New five year plan aims to cut messaging prices by an additional 30-45 % by end of 2020
SWIFT announces today that it expects to deliver a 57% price reduction on its messaging services by the end of 2015, exceeding the original target of a 50% price reduction set out by the company in 2010 as part of its SWIFT2015 strategy.
In 2010, SWIFT’s strategy called for a 30-50% price reduction between 2010 and 2015, a goal the co-operative achieved at the high end of the commitment in 2014, one year ahead of schedule. By the end of 2015, the total price reduction over the five year period is expected to reach 57%.
“This is a reflection of SWIFT’s commitment to the banking community,” says SWIFT Chairman Yawar Shah. “The co-operative reached its price reduction commitment at the end of 2014, one year ahead of schedule, but maintained the programme, yielding a much higher reduction rate than expected. I congratulate SWIFT for this effort and look forward to the additional price cuts the community will reap over the next five years.”
SWIFT started its price reduction efforts in 1996 with a 30% decrease in messaging prices. Since 2001, these efforts have been greatly enhanced through formal price reduction commitments and well established pricing principles, including:
- Encouraging usage as opposed to maximising profit;
- Recognising the contribution of large users and their role in creating economies of scale;
- Maintaining the cooperative spirit and transparency;
- Reducing barriers to entry for smaller users;
- Responding to competitive threats; and
- Being economically sustainable.
The new strategic five year plan, SWIFT2020, challenges SWIFT to continue investing in the security, reliability and growth of its core messaging platform, whilst making additional investments in existing services and delivering new and innovative solutions. An additional part of this plan is the new long-term, structural price reduction programme that will be put in place in January 2016. This is the fourth strategic pricing plan SWIFT has introduced to the community in the last 15 years. The new plan calls for a 30-45% price reduction by the end of December 2020, taking into account the necessary investments to grow the business.
Francis Vanbever, CFO at SWIFT adds, "Strong traffic growth, rigorous cost controls and innovative pricing schemes have allowed us to overachieve on the pricing pledge we set back in 2010, enabling us to pass on significant savings to our customers. Depending on market conditions, we are committed to a new price challenge of lowering prices between 30% and 45% by 2020, whilst also addressing our non-messaging services and products with innovative and targeted price actions. We are confident that these price reduction targets can be met without compromising the aggressive investment plan outlined in our 2020 strategy”