Roundtable SWIFT Standards


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Roundtable SWIFT Standards

  1. 1. Roundtable: SWIFT MYSTANDARDSMAy 2012 In association with A tool for change To coincide with the launch of the MyStandards product, SWIFT and Banking Technology combined to bring together some of the people involved in the pilot development to PARTICIPANTS discuss how the product has evolved and where they see it going post-launch. MyStandards, officially launched this month, A central part of the development was Marc Delbaere, head of is a development that goes to “the heart of the involvement of the user with a the research & development, what SWIFT is doing to reduce the cost of range of banks and other interested parties SWIFT Standards managing the implementation of standards”, brought in from the beginning and others according to no less a person than SWIFT joining as development progressed to the chief executive Lázaro Campos. open pilot stage. Bank of New York Mellon, Stew Cofer, SWIFT He may well have been understating the Citi, Clearstream, JP Morgan, RBC Dexia, product manager, case: initial reports from pilot users at Sibos SIX, Bundesbank and the UK Payments JPMorgan Treasury Services in Toronto last year were very positive, and Council all contributed to the project, as did as the launch takes place in New York, a the Securities Market Practice Groups. momentum is gathering behind the initiative. Stew Cofer, SWIFT product manager, David Broadway, So what is MyStandards? The service JPMorgan Treasury Services: “We were senior technical adviser, is intended to provide a comprehensive approached early 2011 to participate in Investment Management mechanism for financial institutions to the pilot. We had some queries about Association, and co-chair communicate service information with it’s scope and ambition, but immediately of the Securities Market their customers, as well as improve recognised the value and had some ideas Practice Group Investment internal management of standards and for initial use. Our customers increasingly Funds Working Group market practices. purchase services from multiple financial According to Marc Delbaere, the initiator institutions as they grow; it follows that they and business owner of MyStandards, the increasingly benefit from better standards original product idea started some two management. These multi-banked clients years ago. “It started towards the end are honest and share with us the pain they of 2009 when we did a full analysis of all experience from variations generated from of the pain-points in the industry around different interpretations of standards by their standards,” he says. “We were looking at service providers; they are a driving reason the complete end-to-end chain of what was we are so involved in standards creation happening, from defining standards through and enrichment across many business to implementation, and we realised that areas. MyStandards seemed a natural step SWIFT had a somewhat restricted view of in the right direction. Initially, we sponsored what was happening.” content into MyStandards from a cash Delbaere says that SWIFT identified two management and a securities perspective.” issues that needed to be addressed. “One One of the things that is clear is that of the early things we recognised was MyStandards will address different needs for that harmonising global market practices different groups, and for many the attraction was the tip of the iceberg and the reality is less to do with the change management was that the industry, in dealing with all issue than with the ability to communicate of these specifications and standards, standards information quickly and uniformly had all sorts of other constraints, such as to clients. local regulation or limitations of back-end “For JP Morgan it was less to do with the systems. That was one of the things we first problem and more with the second. For wanted to fix,” he says. “The other was an organisation of our size, annual standards change management. These standards changes are well tended. The communication change over time and every time element was attractive because we are part something changes, since we don’t have of a community that recognises the current fully integrated change management from process could improve, specifically in the source of the standards to integration getting the standards into applied business in systems, this causes massive costs language in a uniform way,” says Cofer. “For across the industry. We wanted to treat us the appetite for being involved was based CHAIRMAN change as something more consumable on our clients’ need to understand applied David Bannister, editor, – all the way down from when business use across their service providers. Like many Banking Technology people decide to change something, to institutions we have robust documentation, (moderator) where you need to implement the change on boarding processes, and interfaces with in your systems. Really, those were the the industry. JPMorgan is probably like main two drivers to the project.” a lot of institutions in that when we write36 I
  2. 2. Photos: David Bannister internally. “But what was unusual was the amount of customer inclusion, very, very early in the process,” he says. “The first things we showed were sometimes very sketchy, but it showed where it might go. That was the deal, to be able to set up expectations at the right level and make sure that we were going in the right direction.” Cofer says that it worked from his perspective: “We really have seen SWIFT address almost everything that we asked them to do.” David Broadway, senior technical adviser at the Investment Management Association, and co-chair of the SMPG’s Investment Funds Working Group, was one of those“We used to compare national market practices who came to the development later, andmanually on a spreadsheet, lining up the he agrees that the iterative development has been central. “The first time I sawcountries and doing a gap analysis manually but MyStandards was at an SMPG meeting ain MyStandards it pulls it up and in 10 seconds or year ago when it was introduced informally. We started using an early version of thewhatever, it does the analysis.” editor component to capture the discussions David Broadway, IMA around the messages we were working on at the time,” he says. “At that stage we weredocumentation, standards are the starting and crucial to the development – in fact, doing it as part of the beta test and in thatpoint. The result after we, competitors collaboration changed the direction of the that process we identified bugs which theincluded, all strive for the best way to apply development substantially. facilitators took back to their colleagues atthese is some good documentation; yet “In the beginning we had a fairly good Swift. It was the first step, but we actuallyour customers still feel the inconsistency. idea of the problem we were trying to solve, did use it – and the work we captured at thatI’ll claim some small bragging rights here but if you look at the evolution of the product stage we were then able to use.”– being the first to contribute a practice/ from what we thought we would build to Broadway says that while the serviceusage guideline to MyStandards in the pilot what we ended up building, there is quite isn’t yet fully mature, this constanthas put us in a great position on this point. a significant difference – there’s perhaps a redevelopment gives him confidence that itWe were very impressed at the output and 30% difference between the feature set that will develop further. “It has a little way to gowere able to give SWIFT requirements that we planned and what has turned out,” says in terms of what I have seen, but I alreadywould directly benefit our customers in very Delbaere. “The way that happened was that know that there are future developmentsspecific use cases. To be fair, most of what we were sharing stories and screen mock- coming along, which is part of the iterativean institution might need was part of the plan ups with the customers from the start and approach. For example, I joined the processfrom day one.” there was a lot of interaction. They were in November and was on a conference call This, he says, will allow easier telling us, ‘we will have more of that and less in January and all of the things I’d come upmanagement and dissemination of that of that’ and this continuous feedback was with had already been dealt with.documentation. invaluable.” Broadway says that his funds market The involvement of potential users early SWIFT, like most IT-centric operations, practice group currently has PDFsin the process was a departure for SWIFT, uses Agile development methodologies describing market processes, supported > I 37
  3. 3. Roundtable: SWIFT MYSTANDARDSMAy 2012 In association with A tool for changeby spreadsheets describing the componentusage. “What we want to do next isto replace those spreadsheets withMyStandards representations of them, andthat will be a massive improvement on whatwe have today in terms of what we see whenwe try to capture market practice and theconsistency of what’s presented as output.” This immediately eases the task facedby national market practice groups whenit comes to comparing their processes. on the investment funds side, but withoutCurrently each group will have captured the the ability to capture processes in the sameprocesses slightly differently and formatted place and amend them to create yourthe spreadsheets differently. The consistent own specifications – to make an optionalMyStandards approach will ease this “The component mandatory, for instance – fortools are there within MyStandards to do it all the purposes of market practices. It is about the more standardised the messages areon screen and that delivers extra capabilities doing what you want to do in context, far between them, the better for everyone.”that we don’t have today,” he says. better than we’ve ever been able to do.” Delbaere says that the diversity of the Cofer adds that by taking this approach Cofer agrees: “You can’t compliment the industry was something that SWIFT wasthere are benefits for the wider industry. interactive nature and visual presentation of aware of right at the beginning. “When we“This is where Swift did a great job – you’re MyStandards enough. There’s just nothing started, we realised we were looking at ain the funds space, and I’m in the treasury like it.” very diverse environment, and there wouldservices space, but those suggestions really Competition versus collaboration is be different needs as different businessbenefit every other business area that might something that is talked a lot about, but areas were dealing with standards in veryuse MyStandards,” he says. “Swift has MyStandards could raise issues in some different ways. At the end, when you abstracttaken that perspective across the standards minds about where the boundaries are: it, the fundamental problems are all thelandscape, so we got a lot of benefit that we surely if you have more efficient processes same. Can you describe what you are doinghadn’t asked for.” than the bank next door, it is a competitive today? That’s not easy, and everyone does These benefits will only be fully realised advantage that you’ll want to protect? it differently, so just providing that capabilitywhen there is a greater uptake, These Cofer says that this might once have is helpful,” he says. “From a product pointbenefits will only be fully realised when been the case, but no more. “Efficiency is of view, what do people care about? Theythere is a greater uptake, however. “The always an advantage – but what if everyone care about what they do today, and what theinformation has to be in there, of course,” was equally efficient in a agreed way?” he drivers for change are, and that is what wesays Broadway. “Swift has been working says. “I think a gap did perhaps exist for best started with.”to load existing SMPG and NMPG practice documentation, but MyStandards Best practice groups are one way todocumentation into MyStandards – we still will change that forever. No matter what the address these needs but the other wayneed to do some validation at this stage – adoption rate is, there has already emerged is just to create a community, says Cofer.but although it won’t be in the public domain a good way to describe standards. I’m very “MyStandards is very good at taking oneuntil we validate it, there is an existing body pro MyStandards at the moment, especially part of the process and uploading it, whichof work.” for an institution since the content that is in is the ‘My’ part of MyStandards. But you In the early days this implementation there now generates, with a click, your own will only get more engagement wherewill be at different speeds as different client documentation in a variety of formats.” people have an input on the reasons for thestakeholders are at different stages of The existence of a central source of changes.”adoption of standards – most of the SMPG information will be one of the drivers to Cofer divides the potential users ofand NMPG working groups date back to the wider adoption that will also remove this as a MyStandards into three groups. “The firstmove from older standards to ISO15022, for competitive issue. “The information is being are those who consume the standards thatinstance, and are just starting the transition used by one consumer, but contributed by already exist and we have seen immediateto ISO 20022, while the more recently many, and no institution is going to want value from that: instead of looking at aformed funds group was set up with ISO to not be one of the many, though there handbook, we interact with a click and20022 in mind. is no motivation to be the only one on see the standards instead of digging “We came from a slightly different starting MyStandards,” he adds. through user handbooks,” he says. “Theplace,” says Broadway. “The people that Broadway says that this is already the second group are those who are addinghave been doing market practice in 15022 case in other areas. “In the securities world their information; “contributors” such aswill see a very different representation in it is a many-to-many relationship between large institutions, market practice groups,MyStandards to what they are used to – it’s institutions. You can compete on services, and SWIFT itself. Cofer says there aremore hierarchical, and in my experience but the way you want information to flow challenges here as you are “see actual useyou can visualise the message far more is to everyone – each institution, such as and interpretation versus the standardseasily than with flat tables. We’ve had the a custodian or an investment manager, is in the cold light of day”. The third group,hierarchical presentation with ISO 20022 connected to many counterparties, and “the wider community” can examine the38 I
  4. 4. Photos: Kosh Narandynamic that exists between standards and Delbaere says that SWIFT has been we are pushing the client benefit – is thatinterpretations. “It allows them to understand addressing this. “It is a difficult problem,” he the people uploading market practices arewhat one institution does in relationship to a says. “We have tried to keep administration part of the same community as people whostandard as opposed to another institution and privacy features as simple as possible are consuming them. The challenge is stillor how one market behaves differently than but I am sure we will continue to get business applicability so the consumersanother from the same base standard,” requirements in this area.” can put the standards into practice in anhe said. “Previously, when a multi-banked easily understood, consistent manner.client wanted one way of doing things with Even though this is a role SWIFT can’t play,all of its banks, they often chose to meeting “You can’t compliment they have provided a fantastic platform towith all of their banking providers at once to advance and simplify the conversation.”realise their goal; in-person, real-time “co- the interactive nature With the launch of MyStandards thisopetition”. With MyStandards you’d have and visual presentation month, SWIFT is introducing a powerfulthe results of that meeting on your screen tool that has a number of roles to play inwithout the meeting at all.” of MyStandards enough. the future harmonisation of the industry, Delbaere agrees: “It also allows you to There’s just nothing like it.” while also improving efficiency and reducingsay: this is what we do today and if you costs for the users. It is clear from the pilotwant to communicate with us you have to Stew Cofer, JP Morgan work that it also has a role to play in thedo it like this. As a community we can evolve relationships between financial institutions.standard practices over time. We see it as a But it is also just the beginning: as theway of bridging the gap between all of the The boundaries issue goes to the heart of contributors to this article have pointed out,organisations defining standards and usage the matter,– it is at heart a system for sharing there is still work to be done in populating(typically the big financial institutions, market information. “We have to be happy about and validating the service, and in drawing inpractice groups and market infrastructures) what we are sharing, and perhaps even the wider community.and the ones that need to consume these more important is a grasp on and control of As a cloud-based service, MyStandardsspecifications efficiently. who sees what we share,” says Cofer “For will always have one production version, For Broadway, the ability to extract data us, the MyStandards push is really about as it were, but it will “continue to evolve toin consistent format is a plus. “It allows you what it can do for our clients. Often when become still better”, says Delbaere. “Weto pull the information out in a format that a client moves into the standards space will continue to develop in the same mode,you can distribute in a way that suits you for banking, there is a natural knowledge iteratively and interactively. We have monthlyfor that particular purpose,” he says. “We exchange between that client and their checkpoints with users to determine whereused to compare national market practices experienced provider(s). We signed up for we are and where we can go. We expectmanually in spreadsheets, lining up the the pilot as we believed it would aid this that to turn into a sort of user group to drivecountries and doing a gap analysis manually conversation, provided MyStandards was it forward. From my point of view it is verybut in MyStandards you can pulls them up executed properly.” important to continue doing it as we havetogether and in 10 seconds or whatever, it He elaborates on this theme. “Largely with the pilots, because that has been onewill do the analysis for you.” what MyStandards is enabling – and again of the success factors of the initiative.” BT Cofer is equally enthusiastic about thisfunctionality. “The export of XML schemasthat we can get is very useful,” he says. “Onlyrecently were we able to pull up schemas and,with the help of Swift, put them into one ofseveral formats that our clients might prefer.We communicate today using spreadsheetsand PDFs, but our creation time is muchshorter using MyStandards. And let’s notforget that a JPMorgan MyStandards specis then in the same format as one of ourcompetitors’ MyStandards specs. It’s allabout consistency for our clients when weknow they have other providers.” In terms of large-scale deployment, Cofersays there remain questions for a largeorganisation in terms of the administrationthat will be required and in terms of theboundaries of who can see what, but hesays that “if history teaches us anything,it is that people will move on with this andadministration will become a focus after key MyStandards’ visualisation tools are already winning plauditsrequirements are met”. I 39