SWIFT Financial-Messaging System Pilots Blockchain Project - Bloomberg 2022-10-17, 9:20 PM

SWIFT Financial-Messaging System

Pilots Blockchain Project
Project with fintech Symbiont aimed at curbing
inefficiency SWIFT gained attention following Russia’s
invasion of Ukraine
Katherine Doherty September 13, 2022, 5:25 PM EDT

SWIFT, the messaging system used by financial institutions globally to

convey instructions on tens of millions of transactions each day, is testing
out blockchain.

The Society for Worldwide Interbank Financial Telecommunication, or SWIFT

for short, is piloting a project with fintech company Symbiont Inc., according
to a post seen by Bloomberg. The collaboration, which includes Citigroup
Inc., Vanguard and Northern Trust, is aimed at driving “efficiencies in
communicating significant corporate events,” like dividend payments and
mergers, SWIFT said in its post.

As a global financial artery, SWIFT delivers secure messages among 11,000

companies in over 200 countries and territories, directing trillions of dollars
in transactions. The operation gained much attention earlier this year as war
broke out in Ukraine following Russia’s invasion. The US and Europe cut a
number of Russian banks from SWIFT, hurting their efforts to move money
and operate globally.

Read More: Why SWIFT Holds Center Stage in Sanctioning Russia

With the latest pilot project, SWIFT will automate corporate action workflow

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SWIFT Financial-Messaging System Pilots Blockchain Project - Bloomberg 2022-10-17, 9:20 PM

using Symbiont’s technology platform called Assembly, it said in the post.

SWIFT will use the platform’s smart contracts and blockchain capabilities to
“create a network effect that leverages our 11,000 plus institutions
connected to SWIFT globally,” it said.

Under the effort, corporate action data from SWIFT messages will be
translated by SWIFT’s translator tool and uploaded in Symbiont’s blockchain.
Symbiont’s smart contract technology will then compare information shared
between participants, flagging “discrepancies, contradictions or
inconsistencies across custodians,” Tom Zschach, chief innovation officer at
SWIFT, said in the post.

Innovation Push

SWIFT’s work with Symbiont, a US financial technology company, follows

other efforts to innovate in the payment space. SWIFT has already partnered
with the Bank of International Settlements to explore the benefits of using a
common language for cross-border payments.

SWIFT was set up to make it easier for banks in various countries to

communicate with one another. The private network was designed to be
more secure, and its messages followed a protocol so they could be quickly
understood by banks anywhere in the world. But it hasn’t been immune to
hacks: It’s been used by cybercriminals to commit heists, showing any
system can be vulnerable.

Symbiont offers its blockchain technology to solve inefficiencies in the

financial marketplace.

“By bringing Symbiont’s Assembly and smart contracts together with

SWIFT’s extensive network, we’re able to automatically harmonize data from
multiple sources of a corporate action event,” Zschach said in the post. “This
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SWIFT Financial-Messaging System Pilots Blockchain Project - Bloomberg 2022-10-17, 9:20 PM

can lead to significant efficiencies.”

The pilot is in development and with a select group of participants that will
test it and provide feedback in September. If it’s successful, SWIFT will
extend it to cover more corporate events and assess bringing it to the wider
SWIFT community.

“Via our smart contract technology, we are enabling market participants to

automate the reconciliation process,” Mark Smith, co-founder and chief
executive officer at Symbiont, said. “We look forward to taking the next steps
in exploring what can be built on top of this high-quality- data source.”

(Updates with CEO comment, background from sixth paragraph.)

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