Can Swift stay relevant in a world of blockchain? Swift, founded in 1973 with the aim of standardizing how cross-border payments are sent, is the epitome of a middleman. It sits between many of the banks worldwide, making money off the fees it charges when its members sent transactions between one another. Since its founding, the number of Swift member banks has grown from 239 to more than 11k. Last year, the "cooperative society" sent 6.1bn financial messages on behalf of its members, earning €710m in operating revenue. Then came the blockchain, and in many ways, all that money is up for grabs. By providing a shared platform for exchanging transactions in real-time, the technology has led some industry middlemen to reevaluate their roles. With a blockchain, the potential exists for all of Swift’s members to someday send each other money instantly, instead of several days it can currently take. Swift isn’t planning to go down without a fight, according to those on the front lines working to help ensure the payment network remains relevant. Yet that doesn’t mean it’s unwilling to change. The organization is spearheading a new payments initiative, led by some of the world’s largest banks, that approximates the functionality of blockchain. Swift has also pursued a broad collaborative effort alongside startups, looking to adapt to both the technological and cultural winds of change that are shaping finance today. A new foundation At the heart of this effort is a plan to reinvent how Swift functions at its core. Released as a pilot last month, the Global Payments Initiative is aimed at boosting transparency and speeding up the time in which it takes to complete a transaction. In September, Swift CEO Gottfried Leibbrandt told an audience of 8,000 people at Sibos that his company was looking […]
