Swift has spent a lot of this year focused on honing its standards development message for the market and, in this vein, lead standards analyst Tom Alaerts has suggested that the industry network operator could use social media and an online platform to improve the standards development process itself. By providing a forum for open discussion about standards and for receiving feedback on various proposals, Alaerts suggests Swift can facilitate a much more efficient process for the development of financial messaging standards than is currently in place.
In a recent missive on the online swiftcommunity website, Alaerts notes that the current process for standards development is “complex” due to the proliferation of technical documents in various “edits and variants”, each tailored to different audiences. These documents are also “scattered” across different constituencies and are hard to pull together in a coherent manner, thus making an impact assessment of how a particular standards release will affect a financial institution’s systems across all its departments much more difficult.
The idea being mooted by Alaerts therefore seems in line with the standards investment roadmap initiative: to share a framework for the development of new standards in a collaborative environment in the form of a web-based platform, which Alaerts has tentatively dubbed MyStandards. Compare this to the investment roadmap, which is the beginning of a framework to determine who provides what in the securities messaging standards space and to build out interoperability between these standards. Both are aimed at fostering communication and collaboration in the industry, one between standards bodies and the other between all constituents in the space.
The idea is also reminiscent of the Avox Wiki-data online look-up tool for entity data, which provides a freely available database that can be updated by industry participants in an iterative fashion, a la Wikipedia. However, the Swift version would be shared with a select number of market participants, rather than the industry at large.
Alaerts explains of the MyStandards initiative: “The basic idea is that you can easily capture bilateral and multilateral agreements, market practices, and market infrastructure specifications in a formal, computer processable way and upload them to the MyStandards website. This will work for both MT and MX. Then you can decide with which institutions you share these specifications. Or perhaps you don’t share certain specifications when they represent capabilities of your internal systems.”
The rationale is that the formal capture of all this data will enable firms to more easily carry out impact assessments regarding new standards. MyStandards would be able to generate an impact report of a standards release for all of a firm’s bilateral and multilateral agreements, says Alaerts. For example, the system would automatically indicate which fields within a particular bilateral agreement would be affected by a new standard’s introduction, thus flagging any potential reference data challenges.
Alaerts reckons the pricing scheme for the new service (unlike Wiki-data, which is free) should allow it to be “self-sufficient” and for it to grow over time, although “basic” access would be free to all firms with a Swift User Handbook license. “This would allow for consulting all the base standards and formal specifications created by counterparties, market practice groups and market infrastructures. A payable, tier-based subscription will then give access to the advanced features such as creation of these formal specifications, standards release impact analysis, and comparison features. In any case this license will be priced attractively compared to the efficiency gain,” says Alaerts. Hopefully, this vagueness around costs will soon be clarified and firms will have a better idea of what ‘attractive’ means.
However, the idea is currently at the proof of concept stage and Swift is looking for feedback from the market about the details. The full swiftcommunity article is available to view here.
In terms of the potential future launch of the service, Alaerts notes that if there is enough “committed customer interest”, Swift could potentially launch version one with “enough useful functionality” at next year’s Sibos. Live launch would be at the end of 2011, or early 2012, and piloting would probably happen from the third quarter of next year onwards, possibly earlier when using offline tools.
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