Platform for growth
Christian Sarafidis, SWIFT’s chief marketing officer, explains how SWIFT can help to reconcile competing challenges for the financial services community.
When Christian Sarafidis took on the role of SWIFT’s chief marketing officer last year, he brought with him broad on-the-ground experience from many of the different parts of the SWIFT community. “I’d had several roles at SWIFT before this, including regional and product portfolio responsibilities, which exposed me to the realities of geographic and market segmentation,” he says.
With that in mind, Sarafidis has been paying close attention to SWIFT’s business architecture model, with the aim of ensuring that each segment of the community is able to optimise its SWIFT experience. “We, as a cooperative, build platforms in order to reuse them and make them scalable for our community to leverage. We have a lot of experience in this,” he says. “But we also need to build business architecture; identifying the strategic client segments we have, understanding the way they run their back office, external channels and compliance processes. Once we have understood this, we can then develop a bundle that is appropriate to their needs. The increasing importance of platforms and how we make them available is one of the key values of SWIFT to our community.”
Sarafidis points to SWIFT’s global payments innovation (gpi) initiative as an excellent working example of this approach. “In the context of the gpi initiative, we’re building a new correspondent banking platform. Once you have a platform, you can create value yourself, but you can also enable value creation through APIs,” he explains. “We will develop an API gateway for the gpi initiative and banks will be able to develop their own value on top of this. Through APIs, every bank will be able to offer something different; that is the type of innovation we have in mind.”
Sarafidis recognises the need for continued innovation both within SWIFT and across the industry it serves. “We are really trying to make the link between the external innovation we have been supporting with Innotribe and internal initiatives,” he says. To that end, SWIFT has launched a series of industry start-up challenges with the aim of harnessing start-up expertise to address specific problems that members of the SWIFT community are grappling with.
“This is why we will be creating a dedicated cyber-security challenge,” says Sarafidis. “It will help us to bring the SWIFT community together to focus on innovative ways to combat cyber-security threats, with exploration on such areas as artificial intelligence, pattern recognition, anomaly detection, biometrics and identity management.”
The priority right now is to work with the community to help foster a secure ecosystem.
Christian Sarafidis, chief marketing officer, SWIFT
As chief marketing officer, Sarafidis is the custodian of SWIFT2020, the cooperative’s five-year strategy and, as such, is responsible for its execution. Within that context, he identifies three priorities: continuing to strengthen core SWIFT services; expanding engagement with market infrastructures; and focusing on the growing compliance requirements of the financial services industry.
In addition to SWIFT’s core messaging, interfaces and cloud services – which form the basis of the platform – SWIFT has developed a number of its own added value services in the realms of business intelligence, reference data and compliance. Sarafidis is now keen to extend collaborative engagement across the SWIFT community as a whole. “There is a call for more collaboration: with the banks; with the regulators; with thirdparties operating in the SWIFT ecosystem; and with SWIFT itself,” says Sarafidis. “We want to improve information sharing throughout the community, particularly when it comes to customer security. The priority right now is to work with the community to help foster a secure ecosystem.”
“We have launched our Customer Security Programme (CSP), involving a number of specific initiatives,” says Sarafidis. One of these focuses on the sharing of customer security intelligence. “We believe the community should have the opportunity to learn from issues affecting other members, as this knowledge will inform wider preventive action. We share anonymised information through our Security Notification Service,” says Sarafidis.
Another example of SWIFT using its unique position to foster industry collaboration is the ISO 20022 Harmonisation Programme, which aims to bring consistency to the rollout of the ISO 20022 standard by working with Financial Market Infrastructures (FMIs). “Without co-ordination, we risk diluting the enormous benefit of a common standard being deployed around the world, by payments and securities FMIs,” says Sarafidis. “SWIFT is working closely with the FMI community to share best practice and drive a common set of implementation principles.”
Innovation and distributed ledger technology
At Sibos in Singapore it was rare for an hour to pass without someone mentioning blockchain, otherwise referred to as distributed ledger technology (DLT). SWIFT continues to investigate the potential of this technology. “We’re investing a lot of time in DLT, working with all the actors,” Sarafidis says. “Engagement extends to Board level at SWIFT with an offsite held earlier this year in Silicon Valley to better understand the culture of experimentation prevalent in firms such as Uber and chain.com, in order to bring these insights back into the community and infuse this into our own research & development process.” SWIFT is also a founding partner and board member of the Linux Foundation Hyperledger Project and recently produced a white paper which sets out those requirements it believes necessary to successfully leverage this new technology.
The industry is moving on from blockchain discussions to selecting and testing use cases. We at SWIFT are involved in a number of these proof of value experiments.
Christian Sarafidis, chief marketing officer, SWIFT
Sarafidis believes there are eight critical factors for the widespread dissemination of DLT, including reliability, scalability, security, identity framework, compliance & regulatory requirements, standardisation, governance, and data controls. “Although there is still a long way to go, we’ve seen rapid progress thanks to initiatives such as the Hyperledger project,” says Sarafidis. “The industry is moving on from discussions to selecting and testing use cases. We at SWIFT are involved in a number of these proof-of-value experiments.”
SWIFT also continues to explore how business standards can ultimately help foster collaboration and enable automation by leveraging the industry’s capabilities around ISO 20022. “We are looking to extend this standard beyond messaging into the blockchain space,” says Sarafidis. “Our role is, in essence, to understand what distributed ledger technology can bring to the SWIFT ecosystem and ensure that it is fully integrated into our legacy operation.”
* This article originally appeared in Wednesday edition of SWIFT at Sibos magazine. Download your copy of the complete Wednesday edition to read the latest news from the conference!