HSBC, SAP and payments body SWIFT have signed a significant agreement to join forces and improve connectivity for the bank's clients that use SAP enterprise resource planning systems.

The companies will jointly create the next generation of HSBC Connect to SAP, the bank’s corporate-to-bank integration and treasury offering for SAP-based firms. The goal is to develop a fully integrated environment for financial processing, offering greater flexibility, better information, reduced risk, easier implementation of future services and lower costs.

"Addressing the potentially high costs associated with maintaining multiple system interfaces for conducting electronic transactions, we aim to create a flexible multi-bank solution based on SWIFT’s open standards," said the companies after signing the deal.

The three parties plan to initially develop functionality for HSBC-SAP clients, with the goal of later expanding to broader markets as well.

“The ability to connect seamlessly with not just one bank, but several banking partners, is quickly becoming a priority in the corporate space,” said Marcus Treacher, head of e-commerce for global transaction banking at HSBC.

Connectivity will be rolled out in three phases: payment and select treasury services, then trade finance and remaining treasury services, and finally regulatory reporting services.

Companies use many different system interfaces to manage electronic transactions between their banking partners’ and corporate suppliers’ systems, as well as between their own ERP systems. Often based on a wide variety of protocols, proprietary standards and technologies, maintaining these point-to-point interfaces can be costly, HSBC said.

“Our cooperation with two industry leaders supports SWIFT’s goal to reduce its customers’ total cost of ownership (TCO) by enabling them to expand their use of SWIFT and deliver innovative services to their end-customers,” said Alain Raes, chief executive for SWIFT Europe.

The new HSBC Connect to SAP solution comprises the SAP Bank Communication Management application and the SAP NetWeaver technology platform, as well as a pre-configured SWIFT component for optimised access to the SWIFT network. The new connector is expected to be available in the third quarter of this year.

Meanwhile, HSBC last November appointed a new chief executive of retail banking and wealth management, who will be in charge of an IT standardisation programme in those divisions. Paul Thurston, currently head of HSBC UK, will take the new role on 1 March. HSBC’s chief technology and services officer, Ken Harvey, will report to him on the initiative, called One HSBC.