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<\/p>\nThe Society for Worldwide Interbank Financial Telecommunication (SWIFT), a Belgian cooperative society providing services related to the execution of financial transactions and payments between banks worldwide, is exploring the use of blockchain technology.<\/p>\n
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On September 13, SWIFT announced that it it is working with \u201cseven securities player\u201d (such as <\/em>American Century Investments, Citi, Vanguard and Northern Trust) on a project aimed at driving \u201c<\/em>efficiencies in communicating significant corporate events\u201d; the project will \u201ctrial an ambitious solution powered by Symbiont\u2019s enterprise blockchain platform.\u201d<\/p>\n Here is SWIFT explaining the motivation for this project:<\/p>\n \u201cWhen an event takes place at a publicly traded company \u2013 dividend payments, exchange offers, mergers, Dutch auctions or other corporate actions \u2013 the information needs to be quickly shared with investors, creditors and all other key stakeholders.<\/em><\/p>\n \u201cAutomation of these communications has improved in recent years, but it\u2019s still heavily dependent on manual processes that create both added costs and risks for market participants.<\/em><\/p>\n \u201cThe problem is compounded by the number of intermediaries \u2013 central securities depositories (CSDs), local and global custodians, fund managers, paying agents, etc. \u2013 which make up the investment chain. Each has to pass on information about the event and, because they follow different data standards, may communicate about it slightly differently.<\/em><\/p>\n \u201cThis creates complexity for asset managers, custodians, brokers and other recipients downstream as they receive information about the same event from multiple issuers and, in some instances, with missing, contradictory or inaccurate data. They then have to manually comb through, compare and clean the data to arrive at a single accurate picture of the event so they can make relevant decisions.<\/em>\u201c<\/p>\n Jonathan Ehrenfeld, Strategy Director at SWIFT, stated:<\/p>\n \u201cMajor asset managers will have hundreds of custodian relationships, with assets and securities scattered across a wide range of counterparties. If there\u2019s a corporate event, these asset managers and other intermediaries will receive information from all these sources, and this is where we start to see problems.<\/em><\/p>\n \u201cAccording to our analysis, manual activities \u2013 such as data cleansing, formatting and interpretation \u2013 account for around 30% of the costs involved in processing corporate actions,\u201d says Ehrenfeld. \u201cThat\u2019s why we are collaborating with our community to deliver a solution that delivers accurate corporate action data to market participants in near real time.<\/em>\u201c<\/p>\n For this trial, SWIFT is using enterprise blockchain platform \u201cAssembly\u201d from Symbiont; this platform allows financial institutions to \u201cissue, track and manage financial instruments, such as collateral, commodities, data, loans and securities.\u201d<\/p>\n SWIFT says that is is trying to \u201cfurther automate and increase the accuracy of the corporate action workflow\u201d by using Assembly\u2019s \u201csmart contracts and blockchain capabilities\u201d to \u201ccreate a network effect that leverages the 11,000+ institutions connected to SWIFT globally.\u201d<\/p>\n Tom Zschach, Chief Innovation Officer at SWIFT, had this to say about the use of Symbiont Assembly:<\/p>\n