Responding to SWIFT changes in an uncertain market
2020 has, so far, proved unpredictable. The COVID-19 outbreak has caused ripples in the stock markets, forced small businesses into uncertain territories and at an industry level, incited SWIFT to reconsider its timelines for messaging changes. With banks finding themselves in uncertain times, a focus on the here and now is important. But, so too is transformation.
Delay change, delay advancement
SWIFT releases have almost become an annual event, with new standards regularly released requiring bank action. However, each year many banks opt to delay and work around the standards for another year. Of course, in the short-term this saves time and money and, in truth, it’s not essential to update year upon year. The problem is that SWIFT messaging develops year on year, becoming more detailed, more structured and more data-rich. To delay these changes is to delay banks’ advancement. The long-term effects of putting off upgrades are damaging, and it becomes clear that time was not saved in previous years but in fact, stockpiled, rather than simple, quick upgrades. The process becomes complicated – outdated versions needing to be sifted through before reaching compliance.
Moreover, upgrade processes are valuable pockets of time in which a business can evaluate their position, review what they have and what they have space for. It is a chance to look for windows of opportunity.
In response to the disruption caused by COVID-19, SWIFT has taken into consideration the heightened challenges that banks may face when preparing for the 2020 release. Time is needed to carry out decommissioning as well as the preparation of infrastructures. Delays from SWIFT, such as that of the Category 7 changes and of ISO20022, leave time, not to delay, but to adapt.
Whether you are prepared for it or not, the future of SWIFT messaging is eventually coming, forcing outdated messaging formats into retirement. Those that adapt quickly and take full advantage of the new, structured, detailed messaging will have far more flexibility, clarity and speed on their side, boosting customer experience and enhancing their services to place them in a competitive stance in the market.
Preparation is the next step to readiness, with this comes the opportunity to review and explore ways in which the business can optimize. Planning for upgrade can be the perfect time to strategize, reviewing the business model to see where there may be opportunity to boost efficiency with digitalization or alternative workflows. Furthermore, there may be areas where it’s possible to reduce cost, and others where it may be worth investing for long-term savings and shorter time to value.
In addition, banks may take the chance to look further into their future, anticipate future roadblocks that they can ready themselves for. Such preparation invites long-term gain, providing banks with a robust foundation from which to boost their agility and future-proof their business. The sooner banks choose to take action, optimize and enhance their software, the more time they have to develop and evolve as SWIFT does.
All in all, SWIFT may delay changes, but that doesn’t mean banks should. To keep up with the everchanging financial landscape, complex messaging structures and higher customer demand, it is essential to adapt. Those banks that choose to act sooner rather than later, will be the ones prepared to manage the change and meet heightening customer expectations.
To find out more about how you can prepare for SWIFT changes, contact us.