Banking shareholders at the Society for Worldwide Interbank Financial Telecommunication (Swift) have voted to open up the network to a new raft of participants including corporates, insurance companies and government institutions.
The broadening of access privileges will enable financial institutions to provide hub-and-spoke messaging communications to their corporate customers within closed user groups, says Swift. Additionally, Swift shareholders voted to extend the current category for investment management institution to also include insurance companies and government institutions active in asset management.
The move, fiercely resisted by Swift's larger member banks over the years, acknowledges that widespread acceptance of IP technologies is opening new connectivity channels between the financial and corporate sectors.
"In the search for end-to-end standards there is a real need for Swift to think beyond purely bank-to-bank communications," says Charles Bryant, head of the banking industry division, Swift.
The vote, taken at an AGM held yesterday at Swift's HQ in La Hulpe, Belgium, will enable member banks to use the FIN and new SwiftNet infrastructure for the delivery of banking and financial services to corporate customers. Such services would typically include payment initiation, payment and cash balance reporting, securities transaction initiation and confirmation, portfolio reporting, as well as a range of electronic banking products and services.
"Swift is committed to preserving the bank to corporate relationship, that strategy underpins all of our customer-facing initiatives," says Bryant. "With this decision, we’re enabling our members to build 100 percent on those relationships, providing them with an ideal platform on which they can build and deploy their value-added services."
The decision to broaden its definition of investment management institution to include the asset management arms of insurance companies and government institutions is described as a "logical next step" in Swift’s securities marketplace strategy.
"Securities players at every point in the transaction lifecycle are looking to find ways to better manage risk and handle ever increasing transaction volumes," says Francis Remacle, head of the securities industry division, Swift. "Key to achieving this is universal connectivity, with all the relevant parties at the same table, communicating in the same language. By opening Swift up to the investment arm of insurance companies and government institutions, we’ve taken a significant step forward to ensure that this happens."