The news that SWIFT has been organising meetings between payment banks and several large Corporates in their Le Hulpe offices could be seen as great news by many hoping for streamlining in the Eurozone payments area however, does it conceal the real worries that we should be concerned with?

SWIFT as we all know is a cooperative organisation owned by its users, mainly banks. It often describes itself as non profit making as it returns some of its revenue in rebates to its customers. Non profit does not mean it does not make money! SWIFT makes huge amounts of money considering it has no competition.  The rebates are based on a pro rata formula of number of messages over the network. So in fact the banks get rewarded for more messages going over the SWIFT network (a network the banks own).

If that arrangement is at least cloudy in its monopolistic picture, the fact that SWIFT is also the agent for ISO (International Standards Organisation) to control standard messaging development and usage should give concern to all. In effect SWIFT is running both favourite horses in the same race. Also it can be a judge, deciding the length of the race and the handicap of the horses running.

The monopolistic position SWIFT is in, is not news to many people in the financial markets, who I have worked with over the years but something they accept with a shrug and have to work with. It's almost sacrilege in the standards and banking world to talk about SWIFT with the word monopoly in the same sentence. Fear abounds in the industry that derives income from the very existence of SWIFT and the desire to maintain the cash cow.   

The current push by SWIFT is for corporates to join the network using ISO20022 and its XML structure to enable a lower cost and presumably a more attractive proposition to send their messages over SWIFT. However, ISO20022 can be sent over any network. The idea should be to allow corporates to send ISO20022 over their network of choice and SWIFT should simply be one of the networks.

This current situation could be resolved by a number of changes. Firstly, SWIFT could relinquish its agent role with ISO. As surely this role should be with a totally independent body, not someone running a network?

Secondly, why doesn't SWIFT create a group with all commercial network providers working towards an agreement of interoperability? SWIFT could join up the network interests of BT and all other European providers, ATT and all other US providers and so on around the world. All could agree to carry ISO20022 from their corporates into the SWIFT banking network.

Thirdly, sell SWIFT into the market and make it a commercial supplier. Ages ago this would have been a time to talk about security. However, surely in the 21st Century we are less concerned as network security has reached a plateau of acceptance, especially given that any network has some risk but there are many ways to tackle security. Even SWIFT allows the USA security organisations to view transactions over its network. In today's world security is an ongoing battle and one that is not solved by the operation of a closed network.

Now I may have stirred up a bit of a hornets nest with raising this taboo subject but its time in financial services we all evaluated the industry structure from top to toe and SWIFT should not be sacrosanct from close scrutiny and question.