Lazaro Campos, CEO of SWIFT, said the organization plans to reduce the total cost of ownership (TCO), reduce messaging prices by being more efficient and become more interoperable with regard to a variety of standards today at the SWIFT Operations Forum Americas (SOFA), in New York City.
The three tenets are key to the SWIFT 2015 strategy, the organizations strategy to build up its core services through cooperation from the industry.
Reduction of TCO is a common request from customers as well as potential customers, particularly those in low-volume, high-cost emerging markets. For every cent you pay us in funding, you are paying 3 or 4 cents in the back office, Campos said. We need to change that.
With regard to a reduction of prices, SWIFT has already dropped fees by 50% from 2006-2010, Campos said; in 2011 alone fees have dropped an additional 20%, saving SWIFT customers an estimated 70 million. In that time period, SWIFT has processed 4 billion messages.
Campos said there are a few areas where SWIFT could do better, including consulting services, interface hosting, high-end interfaces, low-end connectivity and going local.
As part of the strategy, SWIFT last year launched Arkelis, a scalable platform for high-volume messaging, which Campos said has begun signing on clients.
Meanwhile, Chris Church, CEO of the Americas at SWIFT, said at the forum that the industry is clearly amidst a period of significant change. That means more risk management and more regulation, he said, which institutions such as SWIFT must embrace.
Church highlighted SWIFTs venture with DTCC and XBRL US to make the corporate actions process more efficient (see XBRL: Patch or panacea?Global Custodian, Winter 2010) and announced a pilot program would start next month with BNY Mellon, Brown Brothers Harriman, Citi, Fidelity, ITG and J.P. Morgan.
This will be a game-changer for the industry, Church said. If implemented industry wide, XBRL could result in $400 million of cost savings for the financial services industry, $230 million in cost savings for intermediaries, $172 million for investment managers, and an 80% savings in straight-through processing rates for mandatory corporate action events.