Collaboration needed in standards across FX markets
Brussels, 12 June 2019 - SWIFT is leading industry efforts to increase automation levels in the global FX market through better standards to help remove barriers that hinder the exchange of information and to enable straight through processing.
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.
As the global leader in financial messaging, SWIFT is calling on the industry to collaborate further to identify bottlenecks, inefficiencies and manual processes that can be eradicated through a common approach and higher levels of automation. A new report published today, “The value of standards in the FX markets”, urges the FX industry to seize the opportunities presented by greater harmonisation through standards.
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.
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.”
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SWIFT is a global member owned cooperative and the world’s leading provider of secure financial messaging services. We provide our community with a platform for messaging and standards for communicating, and we offer products and services to facilitate access and integration, identification, analysis and regulatory compliance.
Our messaging platform, products and services connect more than 11,000 banking and securities organisations, market infrastructures and corporate customers in more than 200 countries and territories. While SWIFT does not hold funds or manage accounts on behalf of customers, we enable our global community of users to communicate securely, exchanging standardised financial messages in a reliable way, thereby supporting global and local financial flows, as well as trade and commerce all around the world.
As their trusted provider, we relentlessly pursue operational excellence; we support our community in addressing cyber threats; and we continually seek ways to lower costs, reduce risks and eliminate operational inefficiencies. Our products and services support our community’s access and integration, business intelligence, reference data and financial crime compliance needs. SWIFT also brings the financial community together – at global, regional and local levels – to shape market practice, define standards and debate issues of mutual interest or concern. SWIFT’s strategic five year plan, SWIFT2020, challenges SWIFT to continue investing in the security, reliability and growth of its core messaging platform, while making additional investments in existing services and delivering new and innovative solutions.
Headquartered in Belgium, SWIFT’s international governance and oversight reinforces the neutral, global character of its cooperative structure. SWIFT’s global office network ensures an active presence in all the major financial centres.