SWIFT, in collaboration with Accenture, has published a new paper that explores how Distributed Ledger Technologies (DLTs) could be used in financial services. The paper is based on an in-depth technology assessment by SWIFT of DLT usage across financial institutions, and highlights the opportunities as well as the challenges for industry wide adoption. 

“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”, said David Treat, a managing director and global head of Accenture’s Capital Markets Blockchain practice.

Technology Assessment Findings

Based on technology assessment, SWIFT and Accenture identified gaps between existing DLT solutions and industry requirements, including 8 critical factors that need to be addressed for the technology to achieve industry-wide adoption: Strong governance, Data controls, Compliance with regulatory requirements, Standardisation, Identity framework, Security and cyber defence, Reliability, and Scalability.

The assessment finds that DLT are currently at an early stage in their development. Despite the emergence of new solution providers, and the natural maturation of existing software, the paper says that there is not a single mature DLT solution yet on the market that addresses all the requirements necessary for an enterprise grade implementation. The paper recommends further research, development and testing to fully understand the capabilities of the technology and the business use cases best suited to it.

“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”, said Fabian Vandenreydt, Head of Securities, Innotribe and the SWIFT Institute, SWIFT.

SWIFT DLT Platform

The paper also highlights SWIFT’s R&D 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.

“SWIFT will leverage its unique set of capabilities – unrivalled 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”, the paper added.

The paper noted that SWIFT has been actively experimenting with DLTs as part of its R&D programme and engaging with its community to identify areas in which they could bring concrete business benefits. SWIFT Innovation Labs are developing proofs of concept spanning various ecosystems of available underlying technologies. In addition, SWIFT has been collaborating with other companies in this space through various initiatives including the Linux Foundation’s Hyperledger Project, as well as Innotribe, SWIFT’s innovation initiative.