The Society for Worldwide Interbank Financial Telecommunication (SWIFT) has announced it will adopt blockchain technology to help automate its messaging system which is used worldwide by financial institutions to communicate various messages including announcements relating to dividends payments and mergers.
As part of a pilot, SWIFT plans to increase the accuracy of the corporate action workflow by integrating a system called Assembly designed by fintech startup Symbiont Inc. Assembly uses blockchain technology and smart contracts to create a network effect that claims to harmonises data and increases efficiency.
In a post made by SWIFT, Chief Innovation Officer Tom Zschach said the integration:
can lead to significant efficiencies. Corporate action data from SWIFT messages is translated by the SWIFT Translator and uploaded in Symbiont's blockchain. Their smart contract technology can then compare information shared between participants and flag discrepancies, contradictions or inconsistencies across custodians.
SWIFT is looking to leverage the benefits of blockchain technology to unlock opportunities like the creation of a single unalterable record which provides a digital audit trail. Vanguard, Citigroup and Northern Trust are also collaborating on the pilot which aims to deliver secure coded messages to 11,000 companies in over 200 countries and territories.
SWIFT is not the only institutional company looking to integrate blockchain technology, at the start of September the Australian Securities Exchange (ASX) announced it had completed a test pilot of a blockchain settlement system to replace its existing CHESS platform.
SWIFT is trialing the Assembly program in the month of September and intends to gradually roll it out to more companies. If successful, SWIFT will extend the coverage to more corporate event types and assess the potential to introduce Assembly in the wider SWIFT community.