Time for a Strategic Role for SWIFT's National Members Groups
Traditionally SWIFT National Member Groups have performed a reactive role to operational rather than strategic issues. They have sought to help the local communities understand changes at SWIFT, frequently at a purely technical level. Rarely have they considered the business needs of their members and how to maximise their investment in SWIFT infrastructure across multiple business lines. The definition of the role of the National Member Group (NMG) in the SWIFT User HandBook refers to them performing an advisory role, including in respect of the interpretation of membership criteria for the local communities.
The UK National Member Group (known as SWIFT (UK) Ltd) is seeking to change this approach. We believe our members deserve more. We also believe that the UK business community can benefit from a more proactive approach to the business benefits from investments in infrastructures such as SWIFT. With the UK now generating the most sent traffic from an individual country onto the SWIFT network (testimony of London’s unique financial centre position), it is imperative that as the NMG we perform a role that will meet the needs of our current and future members.
Before we could identify and progress major business changes, we recognised that we needed to change from our traditional Board structure which was based around payments banks, with a few invited members from the securities communities. Board representation is now based around the top 10 users of SWIFT in the UK, which has brought in investment and securities representatives, to join representatives from the major UK banks and smaller players in both the securities and payments arenas. In this way we have strengthened the business knowledge and understanding of the driving body within the UK SWIFT community.
These changes have been supported by an earlier restructuring of the User Community into one group, with a focus on providing information. In addition we are seeking to work more closely with the new management team within the SWIFT London offices under Michael King, to increase the effectiveness of our work.
As with many changes, ideas for future activities were generated through a lively strategic workshop, where we sought to identify the key requirements and issues for members. These were prioritised into practical activities that could be taken forward. It was particularly encouraging for me as Chairman, that all members were keen to be involved and saw practical benefits for their own institutions as well as for SWIFT in the work streams identified.
The work fits neatly into five main areas:
SWIFT currently offer services that are used within particular applications, but are in fact generic copying, matching and netting services. For example, the FIN copy service used within RTGS systems is commonly thought to relate to payments only; the Accord matching and netting service includes three-way broker matching and long term archival. By thinking laterally we could quickly see other uses for these capabilities. Two task forces have been created to explore opportunities further, one from the broker/dealer community and one from the payments community.
This work could quickly be converted to practical use as it may involve little or no new technical development.
At the present time, the majority of SWIFT members have merely sought to implement SWIFTNet by technically changing the ‘plug’. To gain real business benefits, they need to embrace the new functionality: interactive messaging, fileact and browser capabilities.
But even with these new functions, if members only think about replacing existing SWIFT services, benefits will be limited.
To go further requires, at industry level, agreement of what lies within the collaborative space, and at individual member level, engagement of the senior business decision-makers within our organisations. Identification of the collaborative space is likely to include consideration of the true costs of supporting multiple proprietary interfaces, security protocols and file formats. The business areas are focused on cost control, risk and liquidity management services and the potential new revenue opportunities. The technical areas are security, resilience and scalability.
This is easier said than done, as these costs are often buried within departmental overheads. Within our individual organisations, involving key decision-makers will allow new opportunities and services to be identified.
It is the intention of the UK Board with local SWIFT management to develop a greater understanding within the community of collaborative needs by proactive engagement within institutions as well as with infrastructure and regulatory bodies.
Standards and SWIFT go together in every-one’s mind. We identified two main strands of work under this heading.
Firstly, we are still unable to achieve true end-to-end STP, particularly when you consider the corporate-to-corporate world. We are working to identify the real prohibiting factor, with a view to creating an action plan on how to overcome these barriers.
Secondly, we felt there was a need to improve our member’s understanding of XML standards. We will shortly be undertaking a survey of whether institutions offer or are planning to offer the capability of handling XML standards. If you have not received a copy of this survey and would like to participate, a copy may be found on the SWIFT (UK) website (www.swift.com). When we have analysed the responses, we will be organising a workshop to help members gain a greater insight into the practical problems and benefits of migrating to XML.
SWIFT members do not operate in isolation. We need the vendors, who supply our technical capabilities, to be ready and able to support our needs in a timely fashion. To help improve this situation, we have asked the SWIFT management team to work more closely with the vendors to the UK users. We plan to survey members later in the year to see if any tangible improvement has been seen. This will allow more focussed activities going forward.
Market infrastructures also form a vital part of the UK financial business community and we are planning a workshop with these players, to be hosted by the Bank of England.
As with all changes, good communication of the aims, purpose and activities planned is essential. Various media will be used, such as conferences, direct mail and awareness days.
It is essential that this communication reaches the key players within our members, and we fully recognise that this will not simply be our existing contacts. Key decision makers within Product Management, Operations and Strategic Development Units need to be aware of the benefits to be gained from SWIFT if business opportunities are to be fully exploited.
The SWIFT UK National Member Group is entering an exciting phase in its development. Through the activities described here, we seek to deliver greater benefit to members and the wider UK community. If you would like to know more, please contact us through our web site.
Whilst the SWIFT UK NMG will be taking forward ideas for new products and services through the normal SWIFT channels, we will be looking to the players within the UK markets to embrace the challenge of identifying these new ideas.
We are delighted to have the support of the major SWIFT users in the UK, from SWIFT itself and from the Bank of England. We believe this is a recipe for success.