Annual Report 2006
 | I am writing to you as Chairman of SWIFT and also as a practitioner in the industry. As Chairman, my primary focus is to ensure that SWIFT meets your needs to reduce your operating costs, increases your product offering and helps you manage risk; the same values I seek for the operations I direct at JPMorgan. |
2006 was another very successful year for our co-operative. We are well positioned for the future. While there are many achievements to note, I would like to focus my letter on three themes that underpin all that we do: succession and governance, customer reach, and compliance.
Succession and governance
In June, Jaap Kamp completed his very successful term as Chairman and seamlessly passed the baton to me. It was truly a pleasure to work with Jaap as Deputy Chairman. I would like to thank him for his inspiring leadership, his devotion to our cause, and his outstanding legacy of achievement. Jaap is fond of referring to SWIFT as our global village; he himself, without question, is the personification of the global citizen.One of the biggest responsibilities for our Board recently has been to select a new Chief Executive Officer who could maintain the momentum following Leonard Schrank's 15 successful years at the helm. Lázaro Campos' appointment as the new CEO is a clear indication of the Board's view on the future direction of SWIFT. Lázaro's 20 years of experience with SWIFT and his market expertise will ensure continuity as we implement SWIFT's 2010 strategy and maintain the focus on customers and the co-operative franchise. I look forward to working closely with Lázaro as he assumes the Chief Executive's role.
On behalf of the Board, I would like to extend my thanks to Leonard. As he has noted in his letter, SWIFT has clearly been transformed since he joined us in 1992. Under his leadership, the SWIFT community has greatly expanded to include the securities industry, market infrastructures and now, corporates. Message traffic has grown seven-fold, the entire infrastructure has been rebuilt and launched as SWIFTNet. Resilience has been raised, and prices are down. This is quite a legacy and we are all grateful for it.
As important as our Chief Executive is, another one of the keys to the ongoing success of SWIFT is its governance: The Board, Board Advisory Groups, National Member Groups and User Groups have all been instrumental in providing SWIFT its strategic direction. This unique relationship, where SWIFT's shareholders are also its customers and trusted advisers, is SWIFT's real franchise. The Board is comprised of financial institution executives with diverse backgrounds leveraging the depth of subject matter expertise that they can draw upon from their institutions. This translates into governance and guidance that the SWIFT Executive values considerably.
Customer reach
SWIFT is also unique in that its focus and desired outcome is to apply its resources to improve the profitability of its customers and not itself. We have recently broadened the footprint of SWIFT to allow corporate clients to communicate with their financial institution partners, which delivers value to a new niche of users and extends the value delivered to our shareholders overall. SWIFT has also acted to deepen penetration into its traditional market segments by facilitating indirect connectivity, allowing smaller financial institutions to gain the benefits of SWIFT. I believe our next and greatest challenge is to build on our core strength of standards and connectivity to penetrate beyond the interface and reach deeper into our customers' operating environments to deliver more services that help them reduce costs, broaden product offerings and reduce risk.Compliance
In retrospect, 2006 was a challenging year for SWIFT as we responded to some legal subpoenas and found ourselves caught between conflicting issues of international data privacy in different legal jurisdictions.As we know, SWIFT has had to comply with legally served and mandatory subpoenas from the United States Treasury, targeted against terrorist financing. It is equally important to know that in complying with legal requirements SWIFT successfully obtained limitations on the scope of the information provided to the authorities as well as unprecedented levels of control and audit, which ensure that data requested and delivered follows very strict, narrow guidelines. We are encouraged by the dialogue that has been established between Europe and the United States in order to achieve legal certainty for SWIFT and for financial institutions that balances the need for public safety with protections for data privacy that we can all subscribe to.
Let's get back to business. SWIFT enters 2007 in excellent shape, with an eye on its clients' strategic goals, and a focus on execution.
I would like to thank my fellow Board members for all the time and talent they have devoted to SWIFT over the past year. The National Member Groups and National User Groups and their chairpersons also deserve thanks for their dedication and clear interest in the good of the community. You remain essential to our continued future success.
I would also like to thank the SWIFT Executive and all the employees of SWIFT for their dedicated work, which has positioned SWIFT well to meet the needs of the community. My best wishes to Lázaro as he assumes command from Lenny of a well running, and well run co-operative.
Yawar Shah
ChairmanMarch 2007