Former Head of Standards, SWIFT
A few months from “retirement,” the SWIFT standards maven reflects on nearly four decades dedicated to improving not just securities operations, but also transforming perceptions of the Belgian-based financial messaging cooperative
“In 1974, my boss threw on my desk the draft of the SWIFT user handbook, and said, ‘We have just joined this. Could you tell me what we need to do to go live?'” recalls Jamie Shay. “That was the beginning of my love of SWIFT.” At the time, the future head of standards at SWIFT was working in operations at European American Bank (EAB), one of those quintessentially 1970s institutions: the consortium bank. Fittingly, for an American who has spent most of the last decade living and working in Brussels, EAB was originally called Belgian American Bank. This reflected the domination of its early ownership by the Belgian and French arms of Societe Generale, though its owners later included a number of other institutions that have had interesting (Deutsche Bank) or more than interesting subsequent histories (AMRO Bank, Creditanstalt and Midland Bank). Shay recalls with a wince her first visit to Europe to meet the shareholders back in 1975. “I took in seven countries in nine days,” she says. “Even then, it was an exhausting trip, and I was a lot younger than I am now.” It ended, predictably, at the SWIFT headquarters in the World Trade Center of Brussels. Shay had identified an error in the structuring of the early drafts of the SWIFT message standards and shared some insight on how it might be put right.
In 1975, of course, the SWIFT network was not due to go live for another two years. But by then that draft user handbook had inspired Shay to form a SWIFT Education Committee in New York to inform her fellow American bankers about the new international payments standards. “It was one binder with about half an inch of paper in it,” recalls Shay. “It contained the MT 100 and MT 200 and MT 300 messages. Those were the few message types that existed then. My job was to do the mapping and the specification of the messages for European American Bank, so we knew what to expect when we received an MT 100 or MT 200 or MT 300 message. But I also started doing a lot of work in the community.” The initial task of the Education Committee was simply to raise consciousness about the messages, but it soon got involved in devising and hosting training courses to teach people how to use the new messages as well. It was the beginning of a comitological (another term well understood in Brussels) dimension to her career, with seats on payments committees formed by the International Standards Organization (ISO) and the American Bankers Association as well. Though she kept the day job, this public involvement gave Jamie Shay a more than commercial interest in the success of SWIFT. “I can still remember standing next to the printer on Sept. 26, 1977, waiting for the first SWIFT messages to come through,” she says.
That printer stood in a corner of the operations department at EAB because, despite her increased public exposure, Shay was remarkably loyal to the first banking institution she joined. She even met her husband at EAB, when he came to her as SWIFT product manager to tap her knowledge on behalf of a client. Having joined the bank as a summer intern in the accounting department in 1967, she stayed nearly 20 years. Since 1967 was the Summer of Love, it all goes to show that not every young American was tuning in, turning on and dropping out. Indeed, for Jamie Shay the only thing she fell in love with that summer was the banking industry. She abandoned her original choice of a career in nursing and asked EAB for a permanent job as a reconciliations clerk. She started work on Nov. 1, 1970, at a salary of $125 a week. “It was all paper-based,” says Shay. “To this day I can touch-type on an adding machine.” It will surprise no one who knows Jamie Shay to learn that she was soon challenging her boss, and narrowly escaped being dismissed, though the incident did lead to her being invited to complete a Programming Aptitude Test (PAT). She passed the test with higher marks than anyone had ever attained in her institution before and moved from reconciliations clerk to systems analyst. During the day, Shay designed a foreign exchange system for the old IBM 360s and helped to document the operating procedures for the CHIPS and Fedwire systems. At night she studied for a business degree.
Though her knowledge had raised her market value, and her committee work had lifted her public profile, Shay did not actually leave EAB until 1985, shortly before the consortium was dissolved. Her destination proved ill chosen. She stayed only 18 months as SWIFT product manager at Chase Manhattan. “I knew from the day I started at Chase that I had made a mistake,” she says. “Culturally, it was not a good mix.” Indeed, it is hard to understand why anyone at such a staid, blue-blooded bank ever thought they could domesticate a plain-speaking rebel like Jamie Shay. (Her alter ego is Willy Nelson, the notoriously awkward American country singer, whose addiction to principle landed him in jail.) There followed ten years as an independent consultant, helping AT&T with its payment collections systems and SWIFT with its payments and securities business in the United States. Unlike Chase, the culture of SWIFT proved congenial, and Shay joined the organization as a full-time employee on March 1, 1996, with responsibility for what she calls “field support” in New York. The biggest challenge was to increase penetration of the US securities markets. SWIFT did not have a large share of the European securities industry by the mid- 1990s, let alone the American, but in North America the network also faced image problems. “There was a perception in the United States that SWIFT designed messages without working with the community – that they felt they knew better,” says Shay. “There was a degree of arrogance that the Americans did not like. This was true not only of securities, but of derivatives. One of the results was that the industry developed its own standards in areas, and FIX and FpML came about. The criticism we heard at the time was that we weren’t directly meeting the requirements of those using the messaging. But I do not think we at SWIFT were arrogant. We were misunderstood. I think it was part of the growing pains you have to go through. We certainly have had to spend a lot of time at SWIFT changing people’s opinions in the United States about who we are and what we are. The situation has improved greatly over the years.”
Jamie Shay is too modest to point to her own role in changing perceptions, but it was a substantial one. She was, after all, an American, and a figure who had worked in the wider financial community since the 1970s. Indeed, most people now assume Jamie Shay has a securities rather than a payments background. She is not unhappy about that, since there was criticism when she first took the job in 1996 of her lack of experience of the securities industry. “There were a number of people in New York who felt I did not know enough about securities to take the role,” says Shay. In fact, although she had never worked in the securities industry, she had been acquainted with securities operations since the mid-1970s, when EAB rescued Franklin National. As a consultant, she had also rewritten the SWIFT user handbook, including its securities messages. But Shay knew she would face hostility. SWIFT was not well known or well used in the US securities industry, and she did not want to give anyone an excuse to say that SWIFT did not know what it was talking about. It was the personal support of Anna Hannon, thenglobal head of SWIFT at Citibank in New York, that ensured Shay learned what she needed to know about the US securities industry. “She said to me, ‘Well, if you are going to do securities, I want to make sure you do it right, and I am going to teach you,'” recalls Shay. “I would go down to her office frequently, and she would sit me down in front of a blackboard and tell me everything she thought I needed to know – which was a lot. She also told me about the things I needed to get involved in.”
Hannon is one of three people Shay points to as mentors. The second is Martine De Weirdt, now a key member of SWIFT’s Innovation team, but in the mid-1990s her first manager at the cooperative. De Weirdt launched the Standards Forum, an annual event at Sibos that aims to bring together standards geeks and businesspeople, and which has done more than any other institution to break down the perceptions that SWIFT hands message types down from on high. “The Standards Forum was a wonderful idea,” says Shay, who took it over in 2007. “We have grown it, but we were just the keepers of Martine’s initial idea. She did a wonderful job bringing standards forward and was a great mentor for me.” Her third mentor is Frank Vandamme, the former messaging strategist at SWIFT, who is now consulting to Bolero, the trade services organization. As it happens, his contribution to Jamie Shay’s development was the exact opposite of that provided by Martine De Weirdt. “He is one of those people who can take something that is completely foreign to you and make it understandable,” says Shay. “Standards used to be just about the business, but now it is more technical than business because we model. He is able to bring that technical side down to a level those of us in business understood.”
The influence of both De Weirdt and Vandamme was evident in the approach Shay took when she became head of the standards department in September 2007. Under her leadership, the department ceased to be a standards production factory and started to help clients actually implement the standards through tools and products. “Our focus has changed completely,” she says. “There used to be a lot of complaints about how the standards that were developed were so complex. The reason for that was, as a global community and a cooperative, we took input from all the different countries. We compromised as much we could, but the fact is that we ended up with standards that were too complicated, and a lot of people could not use them. We now talk to the people who will pilot a standard, and we develop for them. That ensures the messages will be used and also means that we get them out a lot faster, because you are not spending a year agreeing on a compromise.” But the ultimate expression of the new, more user-friendly approach was the publication last year of ISO 20022 for Dummies (see “ISO 20022 for commuters,” Global Custodian, Winter 2010), an astonishingly concise account of the content and meaning of the new standard. Since it was first published at Sibos in Amsterdam in October last year, more than 17,000 hard copies and 9,000 digital copies of the booklet have been distributed.
ISO 20022 is now the foundation of the message standards SWIFT is developing in cooperation with other standards groups. Indeed, Shay is most proud of the success of her efforts to reduce the antagonism between SWIFT and the two most important rival messaging standards organizations, FIX and FpML. “If I have any legacy, it is the standards coordination group,” she says. Shay was also a key driver of the “investment roadmap,” which lays out a program for the development of message standards covering securities, derivatives and FX and is supported not only by SWIFT but by FIX, FpML, ISITC, XBRL and FISD too. This degree of cooperation between message standards bodies (if not between message standards bodies and IT vendors) is genuinely novel and owes much to Jamie Shay. When her immediate predecessor as head of standards at SWIFT, Gottfried Leibbrandt – now head of marketing at the company – joined SWIFT in 2005, the organization was in a state of undeclared war with both FIX and FpML. He was clear that the animosity had to be reduced, and it fell to Shay to deliver on that goal in detail. “Gottfried made the first phone calls on the investment roadmap, and I picked it up to see if we could come to an agreement on instruments and lifecycles,” says Shay. “Our goal was always that any joint messages would be based on ISO 20022, but at that point there was still a lot of distrust of ISO 20022. As a result of the meetings, at which we started talking to each other instead of challenging each other, both FIX and FpML decided to give ISO 20022 a closer look. It was at that point they decided to embrace ISO 20022. As a result we have come a long way.”
It is another measure of the less confrontational approach now adopted by SWIFT that, unlike the ISO 15022 messages that preceded it – they became mandatory in 2003 – SWIFT has chosen not to make ISO 20022 compulsory. As it happens, Shay was part of the team that designed the ISO 15022 messages back in 1998. The initial timetable was absurdly ambitious – to start in March 1998 and complete the message set by September that year – and the entire department was assigned to the task. Shay worked with Tim Lind, late of BBH and Omgeo as well as SWIFT, and now at Thomson Reuters, on crafting the corporate actions messages. It is hard to imagine two such different temperaments working harmoniously, and they did not. “I was the one who was really standards- minded and argued that things had to be structured and follow the rules,” says Shay. “Then there was Tim, who would say ‘We can do this, we can do that.’ Tim and I used to have huge arguments, because I claimed he knew nothing about standards, and he claimed I was too black and white. We are good friends now, but it was tough at the time because we had a working group to manage, and we were so different in our work styles and what we wanted to achieve. There was one time that we were having such a terrible fight. It was by email. We sat opposite each other sending emails like kids with texting today, copying the manager. Finally, the manager came flying in, and said, ‘What on earth is going on here?'”
Whatever their differences, they got the job done, albeit not without creating some problems for the future. “All of the settlement, reconciliation and corporate actions messages were written by the SWIFT standards department in a three-month period, so it is not surprising there have been some changes over the years since 1998,” jokes Shay. However, she is disappointed to find people in the securities industry still arguing that they have yet to be persuaded of the case for ISO 20022 so soon after the introduction of ISO 15022, insisting that ISO 20022 is a completely different proposition. “The difference with ISO 20022 is that you can integrate it across all of your applications,” she says. “If it is done right, it is going to save you money. The people that have integrated it are saving money and tell us they are. We have business cases to prove it. My fear – and it is a huge fear – is that most people who are implementing it are hard-coding it. There is no benefit to ISO 20022 if you hardcode it. You might as well keep ISO 15022 or your proprietary messages. The whole of the benefit of ISO 20022 lies in the integration. If you hard-code it, it becomes just another program. If we had time, we would visit every single customer IT department to explain to them that ISO 20022 is not about hard-coding a new syntax. ISO 20022 is not just a syntax. It is a methodology, with a dictionary attached to it that you can download and integrate.” In fact, Shay thinks SWIFT made a strategic mistake in talking about ISO 20022 as a syntax when it was first introduced, because it lodged in the minds of users that the new standard was nothing but another syntax.
But standards are no longer her key focus. Jamie Shay stepped down as head of standards at SWIFT at the end of last year. She stayed on for six months to help her successor, Juliette Kennel, in the role. Shay is now helping lead Life@SWIFT, an initiative that aims to shape the future of SWIFT with a focus on staff development, as well as assisting Martine De Weirdt with the Marketing Talent Development program. Development is a special interest of Shay’s. As head of standards, she made a conscious effort to hire younger people who could grow within the company, and so reduce its dependence on recruiting more experienced people from the securities industry. Standards, says Shay, is the right department for young people to get to know and understand SWIFT, because standards are still the raison d’кtre of the organization. “They can move into other roles in the company once they have mastered its essence in the standards department,” says Shay. “We are painfully aware at SWIFT that our company is not one that young people automatically gravitate toward. It used to be an organization for young people, and it is not any more. Every generation is different, but Generation Y is that much more different than Generation X was, and we are not set up to keep them interested and involved.” Perhaps only someone who took a job in a bank during the Summer of Love can understand what might intrigue the modern equivalents of the young Jamie Shay. She says she will stay on to help in that sphere if Martine De Weirdt finds it helpful.
But for now the task is complete. Shay returned to her native United States at the end of June this year and will retire completely from the company at the end of October on completion of the Life@SWIFT program. She is looking forward to being at home again after living in Belgium on and off since 1999, when she became head analyst on the doomed GSTPA project. (“I did the standards and nobody has ever complained about the standards,” she jokes.) As a full-time resident, Shay found Belgium was not that different from New Jersey, in the sense that Brussels is New York in microcosm. “It is multicultural, and the city is friendly, not in terms of the people but because it is easy to get around,” she says. “The people are similar to New York except that in New York people never make eye contact with people in the street. In Belgium, strangers say good morning to you.” This may help to explain why Shay is not returning to her native Northeast. Though she was raised in New Jersey, one of four daughters of a horse-mad family, Shay now bases herself in Florida. It is hard to believe that she will find the remoteness from the financial epicenter easy, or retirement a natural state, and she is tempted to agree. “Maybe I will be bored, but everybody I know who is retired loves it,” she says. “I am looking forward to a different life.” Certainly, she is still young enough to have another life or two (she only turned 60 this year) and will not lack for things to do. She will spend her time with her elderly mother, and with her 29-year-old daughter Kate, a senior art director in advertising in San Francisco. “I wish I could be more like her in terms of her outgoingness and her talent,” says Shay. “We took pottery classes together, and my finger would get in the way, and everything would be crooked, whereas everything of hers was perfect.” Perfection is of course the enemy of the good, as Shay will know better than most after 40 years of work standardizing operational procedures. She retains an interest in XBRL, where she is helping work out whether the language has applications beyond reporting and where she has been invited to retain a seat on the board. There will be some volunteering, which she would like to include helping the US government improve its use of financial standards, but Jamie Shay will always find a way to stay in touch with SWIFT. “I am always going to have something going on with SWIFT,” she says. “SWIFT has been almost my whole career, and I love SWIFT. Isn’t that stupid?”
– Dominic Hobson