Swift pushes technology collaboration among financial institutions

Financial institutions are often better known for their complex derivative and structured product innovations than their online technology prowess. The Society for Worldwide Interbank Financial Telecommunications (Swift) aims to change that.

At last week's Sibos -- Swift's annual transaction banking conference -- the cooperative's Innotribe stream selected the cloud computing proposal eMe as the next financial communication innovation it will push. Swift will act as project manager, collaborating with stakeholders from around the financial universe to ensure the idea becomes reality.

eMe is a "digital safety deposit box" that allows users to create one online account to process e-commerce transactions across the internet.

"We help members do more with less," said Matteo Rizzi, innovation manager at Swift. "These are ideas that won't happen if taken up individually. Through Swift we can leverage the cooperative's collective intelligence to make them happen."

Swift's innovation team, headed by Kosta Peric and including Rizzi, is behind Innotribe, a collaborative innovation stream run at Sibos. Throughout the four-day conference labs were held, with "webbers" (individuals who move online innovation forward) from around the financial world working together around three main themes: cloud computing, mash-up and crowdsourcing.

All three themes are still in early phases of development. Cloud computing, the theme behind the eMe proposal, is basically (and it gets a whole lot more complex) a way to use the internet to dynamically increase server or database capacity. Mash-ups take multiple sources of outside data and put them together in one source -- think Google Maps. And crowdsourcing involves using a, typically undefined, large group to carry out tasks and solve issues, for example Wikipedia.

Asked why typically secretive and competitive banks would want to collaborate on innovations, Rizzi said: "Swift is the neutral cooperative in financial technology. If a company has a particular business strategy idea, that's not for Innotribe. We give the fast track to ideas where the collaborative piece is essential."

In addition to driving new innovations, Innotribe is focused on finding and developing the business-to-business applications for ideas that up till now may have been limited to just the retail space.

And Swift is not alone in pushing collaborative innovation. At Sibos, Citi launched its new transaction banking web platform -- CitiDirect BE. An upgrade of the bank's existing CitiDirect website, the portal's new capabilities include more sophisticated analytics, user-generated content, audio and video media channels and the bank's electronic bank account management systems.

According to sources at the bank, other financial institutions have already approached it about using of CitiDirect BE on a white labelling basis.

Other financial institutions do not want to be left behind in the web 2.0 race. Bank of America Merrill Lynch has signed an agreement with transaction banking software developer Fundtech to develop a service-oriented architecture portal for the bank's corporate customers. Both institutions emphasised their collaboration with customers and partners while developing their online portals.

Many banks also lack the web 2.0 portals that most treasurers have come to expect since they in their non-work lives are used to drop-and-drag modules and user customisation functions standard on today's iPod's and iGoogle. The desire among banks to meet such expectations may well increase their willingness to cooperate on new applications and innovations.