06 July 2015

Elizabeth Lumley

Elizabeth Lumley - Startupbootcamp

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Data Management 101

A community blog about data and how to manage it

Put a Swift end to paranoia!

05 July 2010  |  5059 views  |  2

There was a bit of a Twitter storm over this utterly, mind-numbingly ridiculous item from BBC4's the World the Weekend on the, now four year old 'storm in a teacup' that is the US/Swift data privacy debate, which contained such statements as this:

Shaun Ley, BBC4 presenter: "If you pop down to the garden centre or a supermarket this afternoon, what you buy could end up being examined by the Pentagon." 

Ummmm, no. I will explain in a bit, bear with me.

And this from Baroness Sarah Ludford: "Well, rather than searching specifically for a name of a particular individual or particular data in a bank account, you would do a big trawl. A fishing expedition, as it were. Now we haven't got 100% perfection and we are still concerned that it involves the bulk transfer of data. So European banking data is transferred en block, in bulk, to the United States and it is searched there."

Not only do these two excepts portray a shocking lack of knowledge on Swift, and Swift data but on financial data management in general. 

I once commissioned a young Peter Guest, who now edits This is Africa for the Financial Times, to write a piece on this controversy in one of my former publications. He leaped at the chance, at the time, to cover the story, because he wanted to find out 'what those dammed Yankees' were up to with our European banking data. 

However, being a talented journalist, and not someone who dashes off hasty blogs, riddled with anti-American predjudice, he wrote a balanced article that listed exactly what Swift was giving to the US government, what the US government could demand and what the EU needed to ensure individual privacy. (I would include a link, but technically the publication is a rival, but anyone who knows me, knows where I've worked, just Google: Peter Guest, Swift data, 2006).

I later interviewed Lazaro Campos, CEO of Swift, for another magazine who confirmed everything in the initial article. 

Let me explain first why this issue is NOT a threat to your personal European bank account (or even your credit at the garden centre). 

The US government can only request specific transaction data (notice how I didn't say bank account data) that relates to a specific ongoing investigation into international terrorism. The US government is trying to track the trail of money laundering for terrorist cells. 

Swift does not allow the US government carte blanche access to their data stores, complete with identifing information. So, unless you are currently under investigation by the US government for a terrorist related offensive (and trust me you'd know-the orange jumpsuit would be a giveway) your personal bank account details at the Co-op are 100% safe. 

As for the statement from the Baroness: 1. the US government is looking for transaction data. They are looking for money laundering trails that lead back to terror cells. And 2. if you think for one second that your bank in Germany analyses its transactional customer database in expensive, high-standard-of-living Frankfurt and doesn't send it to an oursourcing centre in cheaper India than you live in cloud cuckoo land. 

How can banks do this, you ask? Well class, banks send transactional database data to an outsourcing centre stripped of all its identifiers and geographical markers, thus complying with EU data protection laws. Not that I'm saying this is what Swift is doing with the US government, but if it did, it wouldn't exactly be unprecedented. 

For those of you that want to see what Swift says on the matter, here is a link to their EU complaince statements. 

I leave you all in peace, love and international understanding. 

Update: The BBC R4 piece also interviewed a man named Frank Gaffney to represent the US point of view. This is who he is (thanks goes out to Dave Birch of Consult Hyperion)

He is not a member of the Obama administration, and wasn't even a member of the W. Bush administration. He is an extreme, right wing, nutcase (that is a technical term) who sees the Muslim Brotherhood (read Red Menace 50 years ago) around every corner.

Why would a respected organisation, like the BBC's Radio 4, put someone like this on to represent America and to talk about this issue? Was no one else available? No one from Swift? No one from the current US government?

I know it was the 4th of July, but I guess this guy has nothing better do to on Independence Day than to make all Americas sound like idiots on European radio.

(you can tell, I'm a bit annoyed by all this)

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Comments: (2)

A Finextra member | 06 July, 2010, 08:58

Great piece, thanks Liz. You should post this on the BBC website - or at least send the link to the World this Weekend programme team (there is a link on the BBC Radio4 website). Maybe they'll interview you next weekend to set the record straight!

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A Finextra member | 12 July, 2010, 14:55

A well written and even -handed piece about how Swift data is actually provided and used by the US government. What the baroness and BBC refer to is what can potentially happen AFTER the transactional data is received, analyzed and then a subsequent request is made for pertinent data (rad that bank accoun t information and originating data).

In truth, what the US government is looking for is not onloy what accounts are used for money luandering or terrorism support but also the mechanisms.

By that I mean how did the request to transfer the money occur, I mean those bad guys in ornage jumpsuits don;t walk into a bank and fill out a wire transfer request.  They usually access with the internet the accounts and make the requests online.  Sometimes it is through an account they own while other times it is through an account that has been hijacked.

Additional data such as the ip address and geopgraphical location is also accessed/analyzed to create a biometirc picture of the tranasaction that can be used tactically to support immediate actions or strategically to monitor those access points.

In keeping with transperency I know these details as we provide some of the technology that identifies the ownership of a digital identity - where it originated, is it a valid request, what is the geo-location of that request and is that ip associated with money laundring fraud or other criminal actions.

So the swift data first request really is the tip of the data iceberg.  But an important first step that does protect personal privacy.

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job title Startupbootcamp FinTech London MD
location London
member since 2009
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I am the London MD of Startupbootcamp FinTech and the MD and co-founder of Startupbootcamp Insurance.

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