SWIFT 2018/2019: Ushering in a Digital Revolution for Trade Finance
Authored by: Jamie Gallagher, Managing Director-Sales
Despite being one of the oldest forms of banking, Trade Finance has gone largely unchanged by the numerous technology revolutions over the decades. For many, this process remains predominately manual, with banks using spreadsheets or systems developed in the 80s to track financing and guaranteeing a transfer of goods vs. payments. The annual SWIFT standard updates due in November 2018 and even more in November 2019 will see a substantial change for the industry with the massive modifications for MT7xx series that will undoubtedly have a significant impact for the day to day work for trade finance.
Banks operate on a broad spectrum of digital maturity, which will require vastly different degrees of architectural change from each bank to allow for the processing and scalability required by the messaging standards can be met. Given this, there is no one-size-fits-all approach. Those that are operating manually face significant architecture modernization while those operating on legacy Trade Finance platforms will need to work with their providers to assure that new messaging requirements can be met. More digitally-enabled business will have an easier time adhering to the new standards and are in a position to evaluate emerging technologies such as Blockchain as potential SWIFT replacements when more mature. What is true for all, is that the time to act is now.