1. The OPEC Fund for International Development (OFID) is on a global
mission to provide development assistance in developing countries,
that involves conducting payments transactions in 134 countries
worldwide – and in some 122 currencies, including many smaller
currencies that are not easily tradeable or convertible. Initially, 30%
of the firm’s payments were managed manually, through faxes and
simple tools such as Microsoft Excel and Access. In order to improve
efficiency, and reduce complexity, cost and risk, the institution took on
a project to improve its existing payments processes and technology.
In less than three months it implemented D+H’s SWIFT service bureau
solution. Since then, it has realized significant benefits including
savings in time and cost, which are conservatively estimated at a 20%
to 25% return-on-investment in the first year alone.
The OPEC Fund for International Development (OFID) is the development
finance institution established by the Member States of OPEC – the
Organization of Petroleum Exporting Countries – as a collective channel
of aid to emerging nations worldwide. Founded in 1976, OFID works
in cooperation with developing country partners and the international
donor community to stimulate economic growth and alleviate poverty in
disadvantaged regions of the world. It does this by providing financing
to build essential infrastructure, strengthen social services delivery and
promote productivity, competitiveness and trade.
OFID’s work is people-centered, focusing on projects that meet basic
needs – such as food, energy, clean water and sanitation, healthcare and
education – with the aim of encouraging self-reliance and inspiring hope
for the future. The ten years up to 2013 represented a decade of dramatic
change and transformation at OFID, as the institution implemented a
process of strategic repositioning, organizational strengthening and financial
CASE STUDY
Streamlining and Transforming Payments
Through SWIFT Connectivity at the OPEC
Fund for International Development
“In some cases it
might make sense
to have the infrastructure
in house. But for OFID,
moving to a SWIFT
service bureau was
definitely the right choice.
We have no doubts at all
about that.”
Jacobs Edo,
OFID’s SAP Systems Coordinator

2. Lending Payments Core 2
realignment. These activities enabled OFID to substantially
enhance the execution of its mandate, and to consolidate its
standing as a prominent and respected player in the global
development arena.
The large scale, geographical spread and critical importance
of OFID’s mission in countries around the world mean efficient
and effective payments processes are imperative for fulfilling its
goals. OFID conducts payments transactions in 145 countries
globally – and in some 122 currencies, including many exotic
currencies that are not easily tradeable or convertible. This
high number of currencies reflects the way OFID operates as a
global agency but on a local level.
Jacobs Edo, OFID’s SAP Systems Coordinator, explains: “If
OFID lends to a country to build an airport, then we will often
become part of the procurement process, paying directly to
local contractors, either in US dollars or local currency. About
80% of the time, because of the local regulations, contracts are
denominated in the local currency. So when it comes to making
disbursements, there can be challenges when currencies are
not traded on international markets.” Also, because OFID places
no restrictions on which countries it operates in, there may be
international sanctions in place.
In the past, OFID relied on short-term fixes to work around
these challenges, using a mix of global, local, intermediary and
correspondent banking relationships around the world to handle
payments. However, in recent years it had found that the costs
of taking this approach were increasing rapidly. This impact was
increased by the high degree of manual processing involved:
while over 60% of OFID’s payments used to go through various
banks’ proprietary online banking platforms, some 30% still
involved using faxes for correspondence and trading tickets.
And, until recently, OFID’s primary treasury support tools were
Microsoft Excel and Access. “Essentially, we had a treasury
system where the costs of payments were rising by the day, and
we didn’t have complete visibility into our cash position,” says
Edo. “We decided we had to take a new approach.”
The technology journey that took OFID from an opaque
and largely manual in-house payments process to the
implementation of a new state-of-the-art SWIFT service bureau
solution for all its payments started several years ago. The
initial conceptualization of a new technology base for OFID
began at senior management levels as long ago as 2006.
The momentum really started to build from 2009, when OFID
began to implement new technologies across many areas of its
operations – including defining new procurement systems and
processes, and testing out greater automation in its accounting
and human resources functions.
As OFID turned its attention towards improving its existing
payments processes and technology, it could see that radical
change would deliver major benefits – with a new way to
connect to SWIFT quickly rising to the top of the organization’s
agenda. “We understand technology is an enabler for change,”
says Edo. “And when we looked at payments, there were four
key things that we wanted to address through technology.
These were: first, financial risk management; second, bank
communication management with straight-through processing
(STP); third, governance, risk and compliance (GRC)
requirements and standardization; and fourth, integrating
treasury data with OFID’s core operational enterprise data.”
In 2012 OFID launched a comprehensive blueprinting exercise
for a new payments system, and mapped out the system
reengineering that would be required. By 2014 OFID was ready
to begin implementation, based on two principles: all payments
would be unified via a single system; and SWIFT would be the
platform for payments communication. “We were looking for a
best-in-class SWIFT connectivity solution for availability, security,
resilience, non-repudiation and guaranteed message deliveries,”
recalls Edo. “The only question was how to put this into effect.”
Edo continues: “We held some workshops and comparative
analyses, and we found it would be more efficient to go through
a SWIFT service bureau. One of the main reasons for this was
that we didn’t have the manpower and skills in-house to support
this kind of payments system on our own. Another reason
for choosing a service bureau was that we wanted a speedy
implementation – and this was the best way to achieve both.”
With the decision to adopt a SWIFT service bureau having
been made, OFID set about identifying the optimal vendor
and solution for its needs. In evaluating the various offerings,
the key criteria that OFID was seeking included a strong and
proven track record in implementing similar solutions – including
integration with SAP ERP systems – and a well-demonstrated
ability to meet OFID’s specific requirements, both on the
Streamlining and Transforming Payments
Through SWIFT Connectivity at the OPEC
Fund for International Development

3. 3
technical side and in terms of pricing. “In April 2015, D+H
came out top in our assessment and we signed the contract,”
says Edo. “And in May 2015 we gave the green light for the
implementation to begin.”
The D+H SWIFT Service Bureau (SSB) solution that OFID
decided to adopt included SWIFT connectivity via virtual private
network (VPN), straight-through processing (STP), delivery of
SWIFT messages, and ongoing support. “The benefits were
clear,” comments Edo. “We were getting a unified payments
platform that was bank-agnostic. So all payments processing –
irrespective of the house bank behind it – would use the same
technology and processes. This meant we would no longer be
constrained by having to use different message formats and
different means of communication for different banks.”
Edo continues: “One of the quick wins with the unified SWIFT
connectivity platforms was that we would gain a streamlined
payments process with all banks that would be completely
uniform in-house. Also, wherever SWIFT operates we know
we can pay direct to the live beneficiary along the line. So that
enables us to further reduce costs and eliminate delays while
fulfilling our noble mandate.”
At the same time, the round-the-clock support available from
D+H throughout the implementation and into the live operation
phase, coupled with company’s proven high rates of network
availability, meant that OFID could be sure of having access to
the right help and support whenever it needed it. “Sometimes
our payments are very urgent – particularly trade financing,
which can often be time-critical,” explains Edo. “So we wanted
a provider that was very reliable, had proven infrastructure, and
could support us 24x7.”
Less than three months on from the launch of the
implementation program, OFID’s SWIFT connectivity via the
D+H SSB was up and running, following a smooth migration
that involved no disruption to OFID’s ongoing activities. As
a result, OFID now has complete integration of its financial
operations with the support of STP payments processing
for its global clients located in all 145 countries where it
makes disbursements. According to Edo, the three-month
implementation of the SBB solution could have been delivered
even more quickly by the D+H team, but OFID needed to
integrate the bureau’s back-end into its own enterprise systems.
“We will put the two halves together so that both were up and
running at the same time,” says Edo.
OFID is already seeing the returns on its investment in the
service bureau solution start to flow through, especially in
terms of saved time and costs. On the commercial side, OFID
expects to generate a guaranteed return-on-investment of 20%
to 25% in the first year. Edo comments: “We’re on track to
achieve that level of return, and it could even be considerably
more, given the positive impacts we’re already seeing in terms
of efficiency and speed.”
A further benefit is that OFID is not having to spend heavily
on re-skilling its staff to work with the new system, since the
service bureau’s operations are transparent to the user. “In the
back end, we don’t care what’s behind the engine,” explains
Edo. “That’s all taken care of by D+H. So another cost benefit is
that we don’t need to retrain our people – which can clearly be
a major expense.”
Asked whether he would recommend a SWIFT service bureau
solution such as D+H SSB to other organizations facing similar
challenges to OFID, Edo says he would. “Clearly the right
choice of payments platform depends on each organization’s
specific needs – it’s not one-size-fits-all,” he comments. “In
some cases it might make sense to have the infrastructure in
house. But for OFID, moving to a SWIFT service bureau was
definitely the right choice. We have no doubts at all about that.”
“We’re on track to achieve that level of return,
and it could even be considerably more, given
the positive impacts we’re already seeing in
terms of efficiency and speed.
“

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