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An excellent piece David, that clearly illustrates the scope and breadth of what innovation is. What many in the financial world fail to grasp is that innovation is simply a new or novel way of doing something. This ‘something’ in the financial world can relate to any aspect – from financial instruments, lending, deposits or the like, to the mechanics such as payments, money transmission mechanisms, back office operations etc. It is this ‘new way of doing things’ that gives us ATMs, mobile payments, new investment products and so on.    

Unless the banking industry (and that includes PayPal as they hold customers deposits) and retailers can agree on a single standard for the next generation of payments, whether at the point of sale or remotely, all the current activity surrounding mobile wallets, mobile payments and the like are doomed to failure. Suing for patent infringements is simply driving another nail into the coffin.

After watching this developing morass my money is firmly on that old stalwart – the plastic card!

Great new look. I like it.

Why am I not surprised by this bit of “news”? Way back in the mid-1990s two major South African banks individually tried to steer the new South African government in exactly this direction, with no success. The more things change, the more they stay the same.

The basic problem with digital documents is the law. Not every legal jurisdiction accepts them (or e-mails for that matter) as valid. So, as an absolute starting point one needs to get a positive clearance for this move through the bank’s legal department.

Precisely the point I was making in my Blog Post “Why has SWIFT become so SLOW?” (https://www.finextra.com/blogs/fullblog.aspx?blogid=6499 ) And it’s not only banks in the UK either. The problem is global.

If Goldman Sachs thinks that trawling for “muppet” referring e-mails will somehow solve their problem then they have seriously missed the point on two counts. First - there are countless derogatory (and often subtle) terms that can be used in reference to clients (and banks for that matter) and second – not all communications are by e-mail.

The point is, that when staff are motivated by the size of the bonus cheque, client considerations go out the window. And whether you call them “muppets” or whatever, clients are all fair game.

The amount of data available on the Internet has certainly exploded massively over the past few years. However its quality and relevance seems to have deteriorated at an even faster rate.  More the pity that the good stuff out there is now only available for a fee. Could the “Information Age” turn into the “Information Ice Age”?

As long as traders are seen as superstars and that massive profits are the name of the game, no amount of regulation or ringfencing is going to stop the ‘rogue trader’. Funny how the young and relatively junior bank staff who incur massive losses are always ‘rogue traders’ while their incompetent superiors are never branded as such. On the contrary while these bank bosses may sometimes lose their jobs (so garnering a massive golden parachute in the process), they never have to pay any meaningful penalty for their dereliction of duty. The real answer is in giving risk management real teeth on bank boards.  

You have hit the nail on the head Barry. SWIFT needs to decide what it wants to be and then to focus on whatever that decision is.

As a consultant, who is a staunch believer in SWIFT's product offerings, I am totally disillusioned by the organization's inability to think commercially. SWIFT's products have huge potential to deliver automated, efficient, and money earner services for its clients. The problem is that financial institutions are not innovators and SWIFT is locked into the standard setting mindset. So there is a gap, which for years now has been unbridgeable.

It's much the same as the old story of IT vendors in the 80s and 90s which went; "we have a great IT solution for you - you, Mr Bank, just need to find the problem to use it on."

Financial institutions just don't work that way. SWIFT needs to bridge that gap by providing practical hands on guidance as to how specific business issues can be addressed. Until they do that it's just going to be more of the same.