FinTechAutomationSWIFT calls for greater harmonization in FX standards

SWIFT calls for greater harmonization in FX standards

SWIFT is urging on the industry to adopt a common approach and higher levels of automation to iron out inefficiencies in the FX market

SWIFT  has reiterated its call for aligned global standards in the global FX market to be introduced in order to help remove barriers that hinder the exchange of information and to enable straight through processing.

Through its reportThe value of standards in the FX markets, SWIFT is calling for greater harmonization through standards to drive down unnecessary costs, delays and risk. This includes changes to enable automation of the FX matching process.

Trade confirmation via the traditional methods

One notable obstacle that SWIFT points out in the report is trade confirmation via the traditional methods of email, fax and telephone. SWIFT says that an increased volume of trades will overwhelm this particular method of confirmation. High degrees of automation will be able to help, with software helping to approve the multitude of requests. This will make it a necessary part of the forex industry.

Juliette Kennel, Head of Securities and FX Markets, SWIFT, said: “While there is a high level of automation in FX markets already, the industry cannot be complacent and must work together to remove the remaining barriers to efficient exchange. Increased levels of automation through more use of and better use of standards will unlock higher operational, commercial and financial performance for all participants in the global FX market.

“SWIFT is adapting standards used in FX, in conjunction with industry, to lower the cost of doing business, increase returns on investment and reduce the levels of risk involved, but there is more to do. Industry must collaborate further to enhance standards by identifying the operational bottlenecks and barriers to great efficiency for all.”

Automation saving time and money repairing data

Working with the FX industry SWIFT is determined to drive through improved standards to iron out the areas that still create unnecessary costs, delays and risk that hamper the market. To meet the evolving demands of new instruments, products and regulatory requirements SWIFT continuously adapts its messaging standards to ensure the most efficient operation of the FX market.

SWIFT’s 2019 Standards Release will herald new changes to facilitate the automation of the matching process that enables an FX trade to be confirmed, saving counterparties time and money repairing data.

Further standards evolution will be required to keep pace with the commercial, operational and regulatory changes affecting the global FX market to ensure continued efficient operation.

The global FX market which trades in 180 currencies and in large volumes, cannot operate without high levels of automation, but obstacles remain that prevent it operating in the most efficient manner. With millions of confirmation messages exchanged every trading day between counterparties, discrepancies can lead to thousands of potential settlement failures.

In April, SWIFT joined forces with payment industry experts to come up with guidelines for the implementation of ISO 20022 for cross-border payments.

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