SWIFT Matters

I have read several articles in the financial press recently that so obviously regurgitate old press clippings.  This laziness on the part of journalists leads to some regular and common inaccuracies, but none more so than the myth that abounds that SWIFT was ‘co-founded’ by Bessel Kok and a couple of friends!

Why am I bothered you could ask, well apart from the fact that I was one of the start-up team it undermines the whole ethos of SWIFT which is that of an organisation that was born out of a need identified by the banks themselves and then created to fulfill and answer that need, successfully I might add.

In the late 60's and early 70's the European banking community was very concerned at the growth and domination of the markets by Fedwire, CHIPS and a small number of American intra-bank networks that were trying to improve the speed and accuracy of payments.  Their initial efforts had been very successful and Johannes Kraa, a Dutch banker was impressed enough and became concerned enough that he became very influential in convincing his European counterparts that they needed an answer to this American led threat.

Kraa managed to get some funding together and two large consultancies were asked to prepare a study of what the European response could be and to everyone's surprise they not only endorsed Kraa’s vision for a European payments network but took it further and insisted it should have a global remit and crucially, should concentrate on standardising payments between institutions and not only on enabling communications between them.

Their vision led to the creation of a SWIFT community where all the users were shareholders and where all the shareholders had a say in how the organisation was run.  Initially the project team appointed by Kraa recruited Charlie Reuterskiold as CEO, who in turn recruited the first group of permanent staff - no Kok though!

It was Charlie's charm and perseverance that with a small group of co-visionaries such as Alec Nacamuli, Peter Drummond, Jacques Cerveau and Kraa that traveled the world and with a missionary zeal convinced hardened bankers to part with their cash and support this initiative called SWIFT.  SWIFT had nothing of substance to offer merely the promise of things to come, no offices, no network, few members, hardly any staff and very little money, but by pure entrepreneurial passion at the end of the first year of operation it was there - a fledgling called SWIFT, and still no Kok!

Kok entered the game when SWIFT needed a finance director and he was a very good one and later as CEO after Charlie retired he was responsible for many of the financial foundations that underpin SWIFT today.  It is strange that his own biography on the FIDES chess web site where he is the President continues the ‘co-founder’ myth.

SWIFT today hasn't moved far from its' founding remit of standardisation and communication.  SWIFT has standardised the inter-bank payments markets and it has created an online community of thousands of banks.  The knock on effects from the success SWIFT has had is considerable, SWIFT standards have been adopted as industry standards, the speed of payments has been increased and the security and reliability of inter-bank transfers has been improved beyond recognition.

That is why I bridle each time I see it reported that Kok started SWIFT.  He didn't and it undermines the efforts, the vision and the sheer hard work that a lot of people have put into SWIFT over the years.