SWIFT is exploring the use of blockchain technology to improve efficiency

Editor’s Note: With so much market volatility, stay tuned for daily news! Get caught up in minutes with our quick summary of today’s must-read news and expert opinions. Sign up here!

(Kitco News) – The Society for Worldwide Interbank Financial Telecommunication (SWIFT), which is the messaging system used by financial institutions worldwide, has revealed that it is testing blockchain via a pilot program launched with blockchain enterprise company Symbiont.

According to the SWIFT post, several notable giants of the financial world will join SWIFT on the project, including Citigroup Inc, Vanguard and Northern Trust. The goal of the pilot program is to drive “efficiency in communicating key corporate events,” such as dividend payments and mergers.

The SWIFT system currently delivers secure messages between more than 11,000 companies from over 200 countries and territories, helping to manage trillions of dollars in transactions.

Through the new pilot project, SWIFT will use Symbiont’s ‘Assembly’ platform, which has smart contract and blockchain capabilities, to “create a network effect that leverages the 11,000+ institutions connected to SWIFT globally,” the post said.

The overall goal of the project is to increase the efficiency of the SWIFT system, according to Tom Zschach, Chief Innovation Officer at SWIFT.

“By bringing Symbiont’s assembly and smart contracts together with SWIFT’s extensive network, we are able to automatically harmonize data from multiple sources into one corporate action,” said Zschach. “This can lead to significant efficiency gains.”

To achieve the desired goal, business transaction data from SWIFT messages will be translated by the “SWIFT Translator” tool and uploaded to Symbiont’s blockchain. From there, smart contracts are used to “compare information shared between participants and flag discrepancies, contradictions and inconsistencies across custodians.”

Symbiont’s private blockchain solution is expected to help solve inefficiencies in the financial market by increasing transparency through the creation of a single immutable record that provides a digital audit trail, privacy, versatility and delivery of vital statistical data.

“If the solution proves successful, intermediaries will have to submit fewer requests from customers for business transaction data. It also means global managers and asset managers can reduce the number of people who spend their time manually scrubbing data about corporate actions, Zschach said.

The pilot is currently being developed and tested by a selected group of participants who will provide feedback in September. If successful, SWIFT intends to expand its coverage to more types of corporate events and will consider the possibility of bringing it into production for the wider SWIFT community.