At Sibos this year, perhaps the most overused word was "standards". Standards form a vital part in all our lives, from ensuring that electricity flows from the same plug sockets, to making sure cars in one country all drive on the same side of the road.
In the international financial payments and settlements arena, standards are a vital component to ensuring interoperability, moving towards STP and reducing overall systemic risk.
Reflecting the crucial role that standards play in SWIFT's business, this year's Sibos has had a special focus on the area. For the first time a Standards Forum was held alongside the usual conference and exhibition.
Members of international standards setting bodies such as ISO, the UN's CEFACT, the Object Management Group came together with those involved in financial standards such as IFX, FIX and FPML. Also present at the forum were standards setters from other sectors such as RosettaNet for semiconductors and OAG for the auto sector, to discuss the new challenges that the financial world faces in setting new standards.
"Last year at Sibos in Singapore, standards were a topic in every session and therefore this year we decided to hold our first Standards Forum," says Frank Vandamme, head of tool, products and methodology, standards at SWIFT. "We wanted to bring the people from the standards world to come and discuss standards in general."
Standards are vital for the future of SWIFT as they have been for its past. SWIFT was born to replace the telex with a standard for electronic payments messaging and standards have been at the core of what SWIFT does since its genesis back in the 1970s. "SWIFT is three things: a community of users; the messaging network between those users; and the third pillar is standards," says Vandamme.
As with everything else about SWIFT, the cooperative takes a collaborative approach to setting standards. The business users from its members call on SWIFT to convene a working group to set up discussions about establishing new particular standards. "We work with our community to see where there is a need for a new standard," says Vandamme. "Then we build a business case for it. There has to be a business case before there can be any development. The business community tells us what they need. We have the skills to facilitate it but we need their input."
Within SWIFT the standards teams work across two industry groups, one for payments and trade and one for securities and treasury. "There is lots of legacy out there and new initiatives coming out all the time so it is a very patchy landscape," says Vandamme. "And this makes it difficult to move forward."
A key area that SWIFT is looking for developing new standards is in the corporate to bank payments market. SWIFT, in consultation with its members, has developed the Core Payments Kernel standard to help improve what is a very fractured system at present. This kernel will standardize the payment information that corporates make to their banks, so the same information can be used everywhere. "This is a new effort, but there is very high interest in this," says Vandamme.
