On Tuesday morning at the forum, Church shared insights into what the cooperative’s member base is particularly concerned with. He pinpointed three key areas that SWIFT has deemed to be game changers and will therefore be putting more energy into them going forward.
Adoption of ISO20022
Although the ISO20022 standard is far from a new topic, Church noted that what is changing is the pace of the adoption. As such, he believes that the standard is nearing the tipping point. “We know there are over 200 sanctioned projects in play at the moment that are moving towards the adoption of ISO20022, in over 90 countries,” he said. “If that’s not a tipping point or close to it, I don’t know what is.”
Due to the rapid adoption of the standard, SWIFT is making efforts to aid in the rollout. It has launched an array of training programmes and a consulting practice. Most recently, SWIFT has been working with the Canadian Payments Association (CPA) as it builds its rollout plans in the Canadian marketplace. “There’s a lot we can do as this momentum gains pace,” Church added. “I believe we will reach that tipping point.”
Real-Time Retail Payments
While Church does not believe that real-time retail payments have reached the same tipping point as the ISO20022 standard, he does see tremendous momentum gathering there as well. Worldwide, 17 markets now have a real-time payments infrastructure in place. “This is more than just aspiration,” he said. “This is really a trend.”
There are two key drivers behind this momentum, Church continued. Modern technology is clearly driving change in the payments landscape. As a result, both businesses and consumers are demanding real-time payments. “The governments of the world recognise the technology changes and the consumer demand,” he said. “They are focusing in on this.”
Church acknowledged that for the financial institutions that make up most of SWIFT’s member base, the benefits are less clear. “But we also know it’s an area we have to focus in on. Why? Because the regulators are focusing in on it and it’s coming sometime soon,” he said.
Additionally, he stressed that real-time payments are a “changing landscape” area. “If the banks don’t keep an eye on what’s going on here, well… we’ll see what happens,” he said.
Last year, SWIFT determined that real-time payments were a logical initiative to align itself with. This commitment ultimately resulted in SWIFT being awarded the contract to build the new payments platform in Australia.
Compliance and Regulation
The third area SWIFT is focusing on is compliance with laws pertaining to financial crime. Financial institutions and corporates communicated to SWIFT several years ago that it cannot continue to just throw money and resources at this problem – the issue is immense and complex and the banks understand that it needs to be tackled a different way. “They turned to SWIFT and said, how can you bring efficient solutions to market? We need your help,” Church said.
Since that time, SWIFT has introduced sanctions screening and testing software and a compliance analytics tool to help financial institutions and corporations address financial crime risk. Most recently, SWIFT launched its Know-Your-Customer (KYC) Registry, which Church believes will be a game changer. “We built [the KYC Registry] because you said to us, ‘There isn’t a single source of standardised data that we can rely upon and we have to,’” he said.
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