SWIFT Sweet on Securities

Born in the banking and payments world, the Society for Worldwide Interbank Financial Telecommunications (SWIFT) has become a major player in the securities sector, with Wall Street-related messages now comprising almost half the traffic on its network. "It's not a little business for us anymore as we try to add capacity and make [our network] more attractive to securities players," says Joe Eng, outgoing CIO of the industry-owned cooperative.

In addition to making the network open to different types of securities entities - broker-dealers now are eligible to become members of SWIFT (booth 2110) - the organization is looking to expand its services offered to that market. For example, SWIFT now offers a FIX certification service (part of its SWIFTNet FIX capability) to make sure participants speak the same dialect of the trading language.

"We think our play is to tell financial institutions - securities, payments or otherwise - that when they get connected to SWIFT, they have access to so many different solutions all in a single infrastructure, and in an interoperable infrastructure," Eng says. "So you can do securities up and down the trade transaction cycle and eventually go into the payments aspect when you need to do traditional payments. That closes off the back end of the security trade."

The next iteration of SWIFT's long-term strategy, SWIFT 2010, features a major focus on securities. Specifically, the organization wants to support a more diverse array of instruments over its network, such as hedge fund-like products, including derivatives. Eng says SWIFT feels it can add value in terms of standardization and automation to the trading of more esoteric products.

Looking across the securities industry, Eng says service-oriented architecture and the corresponding technology used to support that model, Web services, is a trend Wall Street and the entire financial community "need to keep a very watchful eye on." He notes that SWIFT can support institutions following the Web services path, as well as those moving a bit more slowly (supported with Microsoft's MQ Series messaging, for example).

Eng's biggest challenge, he says, has been continuing to add new functionality to the network while still ensuring a high degree of security and as close to 100 percent resiliency as possible. "That's not an easy thing to do day in and day out, so that has been a focus for me and my leadership team," he says.

Securities-focused organizations, Eng continues, can acquire access to a network from many vendors. However, given the type of high-value transactions those organizations send across such networks, they have different expectations in terms of reliability.

"And those are very high expectations from securities and banking. Our overseers - the central banks - look at us very closely because we connect so many players together," Eng says. "So we are the fabric, the blood system that connects all the major players together, and so we need to keep the blood moving." <<<

Joe Eng announced his resignation on May 22. His last day as CIO of SWIFT will be July 1, at which time Eng will be replaced by his longtime deputy, Michael Fish. "Having achieved what I set out to do at SWIFT and knowing that Mike is well prepared to take over the CIO role, I believe the time is right for me to move on to other opportunities. Most importantly, I will spend some extended time with my family," says Eng. "This will be the first time, whether pursuing my education or in my career, that I will have paused to recharge my batteries and get ready for the next big thing ahead."