A SWIFT Way to Scale Blockchain

SWIFT’s latest experiment with building new solutions on blockchain technology could be just the thing that blockchain needs to finally gain widespread adoption within financial services, says C24’s CEO Craig Beddis.

Since it was founded in 1973, SWIFT has provided a network enabling financial institutions worldwide to send and receive information about financial transactions in a secure, standardized and reliable environment. The SWIFT network connects over 10,000 banks and companies in over 200 countries, and the majority of international interbank transactions use it.

SWIFT: The enthusiastic elder statesman

SWIFT may have been established over 4 decades ago, but while the financial services industry is often accused of being slow to adopt new technology, SWIFT has long been an enthusiastic champion of innovation. SWIFT supports FinTech startups through its Innotribe initiative, drives industry adoption of new standards such as ISO20022, and has been responsible for several projects to encouraging more efficient payment processes using experimental technologies.

The Global Payments Innovation Initiative

The most recent of these, the Global Payments Innovation Initiative, was launched in collaboration with the payments industry in December 2015. According to SWIFT, it promises to dramatically improve customer experience in correspondent banking by increasing the speed, transparency and predictability of cross-border payments.

The surprising thing about this initiative is that it is exploring the use of blockchain, the technology which powers projects such as Bitcoin. But while Bitcoin is, according to its inventor Satoshi Nakamoto, ‘a peer-to-peer version of electronic cash [that] allows online payments to be sent directly from one party to another without going through a financial institution’, the underlying distributed ledger technology, or “blockchain” has several characteristics which make it an extremely interesting technology for SWIFT and its member organisations to adopt.

Blockchain for settlements and reconciliation

Wim Raymaekers, Global Head of Banking Markets at SWIFT suggested that possible use cases would include cross-border payments, securities, and settlements. Settlement and reconciliation is a time consuming and often manual process which still involves spreadsheets and duplication of effort, and cross-border payments and remittances are a key product area where FinTech startups are eroding margins, so it makes sense that these would be the primary focus areas. Wim went as far as to describe the initiative as “Phase One” of a process which could eventually “look at changing correspondent banking settlements and maybe having blockchain technology rather than bilateral correspondent accounts.”

SWIFT and Blockchain: a mutually beneficial relationship

As new technologies and FinTech startups threaten to unseat the incumbent banks from their positions in the marketplace, it’s easy to see why SWIFT and its members are so keen to embrace new technologies. But the fact is,Blockchain needs SWIFT as much as SWIFT needs blockchain. The technology has suffered some reputational damage from early failed experiments around Bitcoin – most notably the collapse of the Mt Gox exchange, but also stemming from issues around regulation and the scaleability of blockchain-based technology.

In my conversations with financial services companies and blockchain startups, what I am finding is that a whole host of interesting POCs are taking place, but they are all in the early stages of development. Blockchain is perhaps the largest open-source technology in the world, but outside of Bitcoin and some initial prototypes in insurance and capital markets, it is difficult to point to commercial projects which are currently live in production. SWIFT’s adoption of Blockchain could be the thing that will finally change that.

Challenges and Obstacles

Raymaekers was keen to highlight that SWIFT are well aware of the hurdles they will have to overcome: regulatory compliance, identity management and verification are important issues for distributed blockchain systems which will require management and industry-agreed controls. It is difficult to overestimate how significant these challenges are, and how important it is that they are overcome.

Banks will simply not adopt a new open technology framework if those control mechanisms are not there. Addressing these issues and concerns will be no doubt raise many red flags with SWIFT members along the way, and resolving each of them will take time. But given that SWIFT is a cooperative led by many of the world’s biggest banks and financial institutions, this initiative seems more likely than any startup-driven project to produce a solution which will have the potential to entirely reinvent the back office of the world’s financial services industry. And that’s an exciting prospect indeed.

Author: Jason Williams

Share This Post On
ATM Africa

41 Comments

  1. Cialis Gunstig Mit Rezept viagra Viagra Generique En Ligne

  2. Mail Order Discount Generic Doryx In Internet Cheapeast buy cialis Purchase Levitra

  3. Hey there! I understand this is somewhat off-topic but I had to ask. Does building a well-established blog like yours take a massive amount work? I’m brand new to operating a blog however I do write in my journal everyday. I’d like to start a blog so I can easily share my experience and views online. Please let me know if you have any recommendations or tips for new aspiring blog owners. Appreciate it!

  4. Hey there, you are absolutely right. I constantly read through your posts closely. I am likewise thinking about garageband ipad, perhaps you might discuss that occasionally. Bye bye.

  5. Hi can you let me know which blogging platform you are making use of? I’m going to begin my personal blog on kik for computer soon yet I’m having a hard time choosing.

  6. Cialis 20mg Side Effects cialis Cialis Milano

  7. Prevacid Solutab Discount Card viagra Zithromax 750 Mg Chlamydia

  8. Admiring the time and effort you put into your blog and detailed info you provide. It is amazing to come across a blog every now and then that isn’t the similar expired rehashed stuff. Excellent read! I’ve bookmarked your webpage and I’m adding the RSS feeds to our active instagram followers blog.

  9. Hello there, what do you feel about active instagram followers? Really impressive subject, right?

  10. Hey could you tell me which platform you are utilizing? I am going to do my own personal website on vpn router in the near future although I’m having trouble making a decision.

  11. Cephalexin Parvo Dog viagra Priligy Generico In Farmacia

  12. Cialis 20mg Soft Tabs cialis Propecia Hsa Eligible

  13. Hey, you are absolutely correct. I frequently look over your site content closely. I’m likewise curious about gateway router, perhaps you could talk about this occasionally. Have a good day!

  14. I am really intrigued to understand just what site platform you’re using? I’m having a few small security problems with the most recent site on contact number and I would love to find a thing far more safe. Do you have any recommendations?

  15. Hello there! This is my first visit to your blog! We are a team of volunteers and starting a new initiative in a community in the same niche. Your blog provided us beneficial information to work on. You have done a outstanding job!

  16. wonderful points altogether, you just gained a new reader. What would you recommend in regards to your post that you made a few days ago? Any positive?

  17. I always look over your content carefully. I am also thinking about firestarter android, perhaps you could write about that sometimes. Regards.

  18. I just arrived right here from another web address about videoder for android and thought I may as well check this out. I enjoy the things I see therefore I am just following you. Getting excited about looking at your site yet again.

  19. Thanks , I’ve recently been searching for info about this topic for ages and yours is the best I have discovered so far. But, what about the bottom line? Are you sure about the source?

  20. Dubai Desert Safari is a primer site for desert safari in Dubai with BBQ Dinner & Belly Dance. Evening Desert Safari, Overnight Desert Safari, Morning Desert Safari.

  21. Incredible! This blog looks exactly like my old one!
    It’s on a entirely different topic but it has pretty much the same page layout and design. Excellent choice of
    colors!

  22. I was curious if you ever considered changing the layout of your site?

    Its very well written; I love what youve got to say.
    But maybe you could a little more in the way of content so people could connect with it
    better. Youve got an awful lot of text for only having 1 or two images.
    Maybe you could space it out better?

  23. No matter if some one searches for his vital thing, thus he/she
    desires to be available that in detail, therefore that thing is maintained over here.

  24. Hello, i feel that i saw you visited my
    web site thus i got here to go back the choose?.I’m trying to to find things
    to improve my site!I suppose its ok to make use of some of your ideas!!

  25. Your style is unique in comparison to other folks I’ve read stuff from.
    I appreciate you for posting when you have the opportunity,
    Guess I’ll just book mark this site.

  26. I am regular visitor, how are you everybody? This article posted at this web site is truly pleasant.

  27. Hello! This is my very first comment here so I really wanted to say a fast shout out and say I really enjoy reading your articles. Can you recommend any other blogs that go over mobile number locator? I am as well quite intrigued by this! Thanks a ton!

  28. Hi. Neat post. There’s a problem with the site in firefox, and you might want to check this… The browser is the market leader and a large component of folks will leave out your great writing because of this problem.

  29. Good Morning, google lead me here, keep up nice work.

  30. I know this if off topic but I’m looking into starting my own weblog and was curious what all is needed to get setup? I’m assuming having a blog like yours would cost a pretty penny? I’m not very web savvy so I’m not 100 sure. Any tips or advice would be greatly appreciated. Thanks

  31. Hi there! This is kind of off topic but I need some help from an established blog. Is it tough to set up your own blog? I’m not very techincal but I can figure things out pretty quick. I’m thinking about setting up my own but I’m not sure where to start. Do you have any points or suggestions? Many thanks

Submit a Comment

Your email address will not be published.