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SwiftRef Utility to Include LEI, Reference Data

Interbank messaging organisation Swift is suggesting that its SwiftRef payments reference data utility, which went live in January, will also host legal entity identifier (LEI) reference data when it becomes available later this year, and perhaps securities reference data as well.

SwiftRef was conceived to fill a perceived market gap in accurate and up-to-date payments reference data. It went live with existing Swift directories covering reference data including business identifier codes (BICs), international bank account numbers (IBANs) and routing codes, but it is expected to expand gradually as reference data owners such as central banks, code issuers and individual banks publish and maintain their reference data on the platform.

The ultimate aim is to create a collaborative environment in which payments industry players from banks and financial institutions to payments solutions vendors and infrastructure organisations can work together to resolve payments reference data issues and improve data quality for the benefit of all.

According to Arun Aggarwal, managing director UK, Ireland and Nordics at Swift, “At the starting point of the platform it was easiest to integrate our own systems. This has provided a technology improvement, but we will expand the platform with others who will populate it with their data and have access to all the data. We will try to bring together as much payments reference data as possible and we are encouraging market participants to put their data on the platform.

“The accuracy of payments reference data and the routing, validating and vetting of payments is an industry pressure point. It was natural for Swift to leverage its expertise and neutral position as an industry body to set up a payments utility that can validate data, ensure reference data consistency and provide one place where payments reference data users can find all the data they need. We are at the heart of seamless low-cost and low-risk payments, so anything that helps the payment process to be streamlined and risk managed has to be good.”

SwiftRef is a global business unit in its own right and results from Swift’s strategic decision to separate services and products, and create more business divisions that can add value above its messaging services. As such, SwiftRef has its own dedicated team to market, sell and support the service.

If SwiftRef started life as a payments reference data utility, it is expected to grow into a much broader platform. Swift is working with the US Depository Trust & Clearing Corp. (DTTC) to be the issuer and facilities manager of the LEI, a requirement of the US Treasury’s Office of Financial Research (OFR) that is intended to stem systemic risk. Swift suggests it will bring payments and LEI reference data together in the utility.

Aggarwal acknowledges that the LEI and its infrastructure have yet to be finalised – a recommendation is due to be made to the G20 summit in June – but seems confident that Swift will play a large part in the end result. If that is the case, he says: “Once the LEI is created there will be a directory of reference data and that will find its way onto the SwiftRef platform. Ultimately, with LEI data on the platform the utility could be used to identify every participant linked to every activity such as payments or over-the-counter securities transactions. This would take a lot of time and effort to achieve, but it could be done.”

Noting that it would not be Swift’s intention to create massive change for its members without delivering benefits, Aggarwal suggests a sense of convergence, saying: “BICS are well adopted if not well loved identifiers. They work and are embedded, so they are not about to go away. There could be a gradual convergence with cross-referencing from BICs to LEIs when the LEI is ready. We could provide a downloadable cross-reference database or look-up table for firms to use in house. We have thought about how BICS and LEIs could converge over time, but not yet done anything about it.”

Further down the track, Aggarwal suggests the possibility of adding reference data for the securities industry to the platform. “Reference data is a natural place for Swift to be and build a central market utility,” he says. “SwiftRef is a generic platform so it would be possible to add solutions for all sorts of reference data. There are already reference data solutions for securities in the market and we wouldn’t compete with our members, but if we could add value and benefit the market with a solution we would then compete in the market. We have no published plans to add securities reference data to the utility, but we could do it.” Meantime, Aggarwal circles back to adding value to the industry’s payments process before taking one step at a time to expand the utility.

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