A new report from SWIFT and Accenture details the settlement network operator’s plan to build a distributed ledger application platform.
The report includes fresh details on SWIFT’s proofs-of-concept focused on the technology which includes how it will work on transaction settlement and identity management concepts that incorporate Blockchain elements.
SWIFT plans to create “…a distinctive DLT platform” focused on financial applications, and suggested it will build in collaboration with industry peers.
As a result of the technology assessment, SWIFT and Accenture identified gaps between existing Distributed Ledger Technologies (DLT) solutions and industry requirements, including eight critical factors that need to be addressed for the technology to achieve industry-wide adoption.
The paper also highlights SWIFT’s research and development plans to build technical, operational and business capabilities with a view to evolve its platform such that DLT-based services could be offered, when the technology matures and business use cases emerge across multiple verticals.
“Since the emergence of DLTs, the financial services industry has been looking for answers to questions about the potential use of these new technologies,” says Fabian Vandenreydt, Head of Securities, Innotribe and the SWIFT Institute, SWIFT. “The technology assessment has given us valuable insights into the necessary requirements for DLTs to succeed in financial services. It provides a clear state-of-play, outlining the different factors the technology needs to address, and the current maturity of DLTs in each of these areas. SWIFT is committed working with its community to identify areas in which the technology can provide the greatest benefits, evolving at a pace that works for each customer.”
Based on the assessment, the eight critical factors that need to be addressed for industry wide adoption of DLTs include:
- Strong governance
- Data controls
- Compliance with regulatory requirements
- Identity framework
- Security and cyber defence
The paper’s authors added:
“Drawing upon its long history of fostering industry collaboration, SWIFT will leverage its unique set of capabilities – unrivaled standards expertise and track record in security as well as our strong governance, operational efficiency, reliability and reach – to deliver a distinctive DLT platform offer for the benefit of its community.”
David Treat, a managing director and global head of Accenture’s Capital Markets Blockchain practice said:
“The financial services industry is moving from an educational phase, into an application phase when it comes to DLTs. We now have a strong understanding of DLT and its benefits, but we need to identify which areas are best suited, as the technology will not be a silver bullet to solve all business issues. The SWIFT and Accenture paper provides the industry with a blueprint for reaching the next step in identifying how to apply DLTs.”
With a goal for wide-spread industry adoption, and as a Board Member of the Linux Foundation’s Hyperledger project – a key industry initiative on DLTs – SWIFT will continue to collaborate with the wider financial industry to evolve open source blockchain technology and build the foundation of a production grade DLT. Innotribe, SWIFT’s innovation arm, will also continue to facilitate collaboration between established financial institutions and financial technology companies on proof of concepts that could lead to tangible DLT solutions for the industry.
For more information about SWIFT’s position on DLTs or to download a copy of the paper click here.