Vocalink

BGC

Focusing on fundamentals

BGC is the leading supplier of payment solutions to the Swedish banking community. Its mission is to strengthen the competitiveness of Swedish banks by offering a broad portfolio of services within the payments area. BGC and VocaLink have entered into an alliance, which transfers processing and development of the Swedish payments system, Bankgirot, to VocaLink.

Sweden is an advanced international economy. It joined the European Union in 1995 but, like the UK, it is not part of the eurozone. Sweden is home to some of the world's best-known technology companies, many of them leaders in their fields.

BGC knows that it must innovate continually to remain agile and, at the same time, cut costs. The strategic relationship with VocaLink facilitates both. How? It allows both companies to focus on core competencies so BGC benefits from the scope and scale of the VocaLink operation and is able to offer the Swedish banking community an expanding portfolio of payment services. These include clearing of payments, credit transfers, direct debits and electronic invoicing and there are many more planned.

Driving international standards

Although Sweden is not part of the eurozone, its banking community is taking a proactive approach to SEPA and views it as a real business opportunity. Swedish banks must defend existing business but are also keen to win new business throughout Europe. SEPA creates a very competitive environment, so there is also intense pressure to cut costs. BGC is keen to establish international standards as these reduce the amount of routing and reformatting that must be done in the payments area.

As well as benefiting from VocaLink's experience of building SEPA products, BGC benefits from the scale of the VocaLink operation which reduces processing costs for all users. VocaLink and BGC are also planning to build new products together and Mr Ölundh is watching the development of the UK's Faster Payments Service very closely, as the introduction of real-time payments offers many opportunities across multiple market channels.

Mr Ölundh suggests that BGC likes to be at the forefront of new product development but it does not view itself as a pioneer. "We prefer to watch technical developments evolve then agree to participate once the technology has been proven to work... our job is to be the collective voice of the Swedish banking community to ensure that competitive new services are developed on time together with minimal risk and cost."

In the 1990s speculative bubbles in the property and financial markets caused a financial crisis in Sweden, which resulted in banks taking a more conservative approach. The arrangements with VocaLink mean that all aspects of the service are proven before they go into operation. As Mr Ölundh explains "Working with VocaLink enables us to pool all aspects of product development: business knowledge, IT expertise, commercial risk and cost are shared by all, it's the right approach for the current business climate."

National borders have become irrelevant and banks need to look beyond domestic boundaries for solutions that meet their strategic needs. Mr Ölundh concludes, "We are glad to be working with VocaLink and the project is progressing to schedule."