SWIFT, the messaging system used by financial institutions globally to convey instructions on tens of millions of transactions each day, is testing out blockchain.
The Society for Worldwide Interbank Financial Telecommunication, or SWIFT for short, is piloting a project with the fintech company
As a global financial artery, SWIFT delivers secure messages among 11,000 companies in over 200 countries and territories, directing trillions of dollars in transactions. The operation gained much attention earlier this year as war broke out in Ukraine following Russia's invasion. The U.S. and Europe cut a number of Russian banks from SWIFT, hurting their efforts to move money and operate globally.
With the latest pilot project, SWIFT will automate corporate action workflow using Symbiont's technology platform called Assembly, it said in the post. SWIFT will use the platform's smart contracts and blockchain capabilities to "create a network effect that leverages our 11,000 plus institutions connected to SWIFT globally," it said.
Under the effort, corporate action data from SWIFT messages will be translated by SWIFT's translator tool and uploaded in Symbiont's blockchain. Symbiont's smart contract technology will then compare information shared between participants, flagging "discrepancies, contradictions or inconsistencies across custodians," Tom Zschach, chief innovation officer at SWIFT, said in the post.
Innovation push
SWIFT's work with Symbiont, a U.S. financial technology company, follows other efforts to
The private network was designed to be more secure, and its messages followed a protocol so they could be quickly understood by banks anywhere in the world. But it hasn't been immune to hacks: It's been used by cybercriminals to
"By bringing Symbiont's Assembly and smart contracts together with SWIFT's extensive network, we're able to automatically harmonize data from multiple sources of a corporate action event," Zschach said in the post. "This can lead to significant efficiencies."
The pilot is in development and with a select group of participants that will test it and provide feedback in September. If it's successful, SWIFT will extend it to cover more corporate events and assess bringing it to the wider SWIFT community.
"Via our smart contract technology, we are enabling market participants to automate the reconciliation process," said Mark Smith, co-founder and chief executive of Symbiont. "We look forward to taking the next steps in exploring what can be built on top of this high-quality-data source."
