Chainlink, the SWIFT team on blockchain services
Chainlink and SWIFT have rolled out a partnership for a new service to help financial institutions operate in blockchain environments, a press release said.
The companies have launched a “Cross-Chain Interoperability Protocol” to allow SWIFT messages to instruct token transfers on-chain. It will help the network become interoperable across different blockchain environments.
It comes as banks have needed homogeneous connectivity with finance, and SWIFT remains a core gateway for new markets.
Current financial market players have seen problems such as slow adoption of technological transformation due to legacy systems that require significant modifications. Since there is a lot of value in the systems, the cost of replacing or developing new connectivity can be high.
Chainlink and SWIFT’s collaboration will allow financial institutions to be more blockchain competent without requiring large upfront costs or development time.
In other news related to SWIFT, a new capability it has will look to address the lack of visibility in post-trade processing.
Read more: New SWIFT tool provides front-row view of post-trade journey
PYMNTS wrote that the new tool, called SWIFT Securities View, will also look into preventing settlement errors.
It tries to fix the problem of security transactions – because when such a transaction is placed, multiple intermediaries make it impossible to track every step of the processing life cycle. Due to the reduced visibility, there is a greater risk of the security ending up in the wrong place. It can make it so that the settlement fails and there are more operating costs and regulatory penalties.
SWIFT Securities View allows a “front row seat” to see every step of the settlement journey, allowing them to identify trades at risk of failure or spot discrepancies between buy-sell instructions.
“SWIFT Securities View does more than just empower our clients to identify and correct discrepancies in settlement transactions; it sets the blueprint and foundation for a new industry standard to radically transform the industry, just as SWIFT gpi continues to do for cross-border payments,” said Vikesh Patel, head of securities strategy at SWIFT.
New PYMNTS study: How consumers use digital banks
A PYMNTS survey of 2,124 US consumers shows that while two-thirds of consumers have used FinTechs for some aspect of banking, only 9.3% call them their primary bank.
