Swift, the dominant player in global trade payments, has admitted that its technology may not be the best available, but claims that it does not matter, since it has the lion’s share of the market.
In an interview with GTR at Swift’s own Sibos event in Sydney this week, a senior executive at the organisation claimed that technology is secondary to network and that potential competitors would struggle to compete, due to Swift’s omnipotence in the market. Swift’s strength, he said, is in its network, rather than its technology.
“From a pure technology point of view I believe there may be better solutions out there. It’s not just about technology, it’s about: does it work, are people comfortable with it, is it widely accepted? If you invent a new credit card which is better than all others but nobody takes it in shops, it’s not going to bring you very far, even if the technology is super. You need the adoption, you need the global scale. On that one, there is no comparison,” said Marc Delbaere, Swift’s global head of corporates.
Swift has been focusing heavily on its global payments innovation (gpi) technology, which has helped reduce the time taken to transfer money on the Swift network significantly. This week, it announced that an Asia Pacific-based trial which saw money transferred between banks in China, Singapore and Thailand almost instantly, had been successful.
Despite this, and despite generally positive feedback from Swift users at Sibos, gpi was dismissed by rival and blockchain-based payments provider Ripple as being a “marginal improvement”. Asked to comment on this, Delbaere compared the Swift-Ripple situation to the videotape format war of the late 1970s and 80s.
“If you remember VHS versus Betamax, it was universally accepted that Betamax was the best technology but in the end VHS won. It’s a question of who do you have behind you, what kind of network do you have and who is willing to follow you in your transformation? On that front, there’s no comparison. From a pure technology point of view, I am quite excited by what other people are doing, they have a lot of interesting things, but they’re lacking the network and scale,” Delbaere said.
This time last year, Ripple was accused of hijacking Swift’s flagship event, when it hosted its own forum in parallel to Sibos in Toronto. The company provided transport outside of Sibos, shuttling clients back and forth between the two events.
Despite this “antagonistic” behaviour, Delbaere has not ruled out the possibility of the organisations working together in the future, saying that “we don’t have any taboos in terms of collaboration, as long as it makes sense to the banks”.
He added: “We’re not going to collaborate with organisations that want to kill the banks, that wouldn’t be us. I would say Ripple was fairly antagonistic to start with and calmed down a bit. We talk with Ripple a fair bit, on panels and so on, exchanging views. I am very happy they’re there, as an industry they’re helping keep our act together, it’s good to have other people try to do things that can challenge you. Collaboration is too early to say, if they can package their technology in a way that would work according to what we’re trying to accomplish, then maybe, why not?”
Following the publication of this article, Swift reported back to GTR with a clarification that although it acknowledges its technology is not the “most exciting”, it is a “good thing to have well-understood technology when you want to roll-out something through many large organisations worldwide”. Swift also emphasised that it is “an inherently collaborative organisation – so we can bring the right people to the table to drive global change”.