The hosts of Sibos kicked off the global banking conference today by announcing the winners of a blockchain challenge it launched earlier this year.
Unveiled by Swift’s head of innovation programs, Kevin Johnson, the news set a tone that was fitting given that 2016 marks the first year Sibos will feature a track dedicated exclusively to distributed ledgers. Taking place in April, the first annual “Industry Challenge” gave blockchain startups a chance to work with 20 Swift customers to determine if they could more efficiently exchange bonds.
As such, Johnson explained the challenge was part of a bid by Swift to open its doors to innovators with new ideas for how the technology could be used.
Johnson told CoinDesk:
“We didn’t want to go out and find five companies doing the same thing.”
The winners were San Francisco-based Smart Contract (which built a “smart bond” based on the LIBOR rate); London-based Rise Financial Technologies (for its “bespoke” post-trade distributed ledger); and London-based Coin Sciences (which focused on bond trading).
The startups will now work with Swift to help explain distributed ledgers at events throughout the week, followed by additional mentorship. There is no cash prize affiliated with the award.
‘The family table’
This wasn’t the last of blockchain at the day’s events, though, as Swift director and deputy head of investor services at SEB, Göran Fors, joined the three winners at “the family table” in the center of a room filled with about 150 Swift clients.
There, Fors said that Swift has been looking into blockchain for the past 18 months, something he took particular interest in due to his role at SEB Group, a Swedish financial conglomerate that last year generated SEK 44.14bn ($5.16bn).
“Disruption is something that I as a user want to see,” said Fors.
Yet, he cautioned that new technology should also generate new business opportunities, not “just shift the way of doing things”.
Smart Contracts CEO Sergey Nazarov told the audience he was “surprised by the appetite” that senior executives at Swift had for implementing the technology in the near term. But he cautioned the audience that they shouldn’t be too fast to adopt.
“The real decision corporate folks have is [to decide], ‘Is this a sustaining innovation or a disrupting innovation?’ In either case, the sound investment is getting your system ready and cryptographically connected to these networks,” he said.
Swift and Sibos
To observers, it may come as no surprise that Swift kicked off Sibos with a nod to its blockchain work given the company is widely perceived to be at risk for disintermediation by the tech.
Though Swift’s secure payments messaging service last year helped initiate 6.1 billion transactions, settlement still takes days or months depending on the product. Meanwhile, upstart competitors using blockchain are promising to cut that time down to near zero.
Former Swift board member Marcus Treacher, for instance, announced last week that his new firm, distributed ledger startup Ripple, had partnered with six global banks to build a network capable of almost instantly settling a transaction.
However, Swift’s head of innovation explained why these ostensible competitors, from both traditional banking and disruptive financial technology startups, have come together to experiment and build with blockchain.
Kevin Johnson concluded:
“It’s not about the technology at the end of the day, it’s about the business needs.”
Image via Michael del Castillo for CoinDesk