Swift: Banks Should Cooperate
Banks had been too complacent in dealing with technological threats in the past, said Swift. Fintechs and tech giants are offering faster, more transparent, and lower-cost solutions for money transfers.
Banks must buck up given fintech or consumer technology startups offering faster, cheaper, and easier money transfers, Alexandre Kech, Swift's head of securities and foreign exchange market told finews.asia in an interview.
«Today, it is not acceptable to make clients wait more than a day for a payment to be executed, without the possibility to track where it is,» said Kech. Currently, about half of the transactions done with Swift GPI are completed within 30 minutes. This starts from the sender's account to the final beneficiary account, with full availability of funds.
Take a Bet
With blockchain technology still evolving, financial institutions may need to take a bet on which blockchain standards to adopt – R3, Hyperledger, or others. It is almost like picking a Microsoft operating system or a Mac operating system back in 2000, when the systems were not yet compatible.
«I would not want to be a CIO at this point in time,» said Kech, pointing to the myriad of private initiatives currently launching. After picking one standard, the next question that could befuddle bank CIOs is how to make them inter-operable, he added.
Advice for Banks
Whichever standards banks choose to adopt, they must continue to experiment in order to stay ahead. «Maybe they realize that blockchain is better, or maybe a API solution is better. By testing, one can find out the use cases,» said Kech.
Secondly, banks should cooperate with others in order to test their solutions effectively. «Work with fintechs, work with a community of competitors, or work with us. Swift can be that platform for cooperative testing,» said Kech.
If It Ain't Broke, Don't Fix It
However, there is no need to overhaul systems for the sake of innovating, noted Kech. As long as the existing environments can continue to provide risk reductions, automation, or cost savings, banks can just tweak what is working.
