Non Editorial 1,050 Branches Pan India 1,750+ ATMs 19,000+ YES BANKers

In Conversation With Securities is a Large Market for SWIFT SWIFT India recently tied up with Marketplace Technologies, a fully owned subsidiary of the Bombay Stock Exchange and the tie-up will act as the service bureau for securities markets. In an interview to CFO Insights, Kiran Shetty, CEO & Regional Head, India & Sub-Continent, SWIFT India talks about SWIFT s plans to play a larger role in India s capital markets. How do you see technology transforming financial services in India? Digitization is creating tremendous opportunities for economies across the globe, and India is an example of a country that not only understands this opportunity, but has embraced it. Digitization has the power to transform India into a true technology leader in the years to come. Morgan Stanley forecasts India's GDP to reach $6 trillion in 2027 because of its digitization drive. That would make India the third-largest economy in the world, behind the U.S. and China, which recorded $18.5 trillion and $11.2 trillion in GDP, respectively, last year. Looking at the technology transformation that has happened in the Indian financial services industry over the past few years internet banking, mobile banking, financial inclusion, move to cashless with payments products, you will find that almost all of it has been in the retail payments space. We see in the coming years a lot of technology thrust on wholesale payments and digitization of trade and supply chain. That business by inherently being paper-based and PDF intensive will see many innovations enabling the digital push. The government s commitment towards Digital India and improving the Ease of doing business will see the trade sector making rapid strides towards complete digitization. How is SWIFT planning to leverage Blockchain technology going forward? Since the emergence of Blockchain and distributed ledger technologies (DLTs), the question of how this technology can be deployed in a business environment has captivated the industry. The search for implementations and use cases is now a key focus of R&D and innovation teams in major financial institutions, and is top of mind for executives seeking to determine future strategies for their transaction businesses and other data-driven operations. As a financial industry cooperative, SWIFT s focus is on building technical, operational and business capabilities with a view to evolving our platform such that DLT-based services could be 38 CFO Insights Volume 11 January 9, 2018 We see huge potential in securities market in terms of bringing message standardization and adaptability. This dovetails in to stated aim of regulators to bring uniform standards across market segments viz. Fixed Income, Trade reporting, subscription redemption et al. offered to our 11,000+ members, when the technology matures, and firm business use cases emerge. Such DLT-based services could be provided by SWIFT, our community or third parties. In this context, we will continue to work with the financial industry to guarantee end-to-end automation and backward compatibility with legacy processes. As part of the SWIFTgpi service (Global payments initiative is about improving speed, transparency and end to end tracking of cross border payments), SWIFT undertook a proof of concept for real-time Nostro reconciliation using a SWIFT-developed distributed ledger technology (DLT) with 33 global transaction banks. Preliminary results of the PoC show that the SWIFTdeveloped DLT application can deliver the business functionalities and data richness required to support real-time liquidity monitoring and reconciliation. DLT provides real-time visibility to both the account owner and its servicer on the available and forecasted liquidity on the Nostro account and supports payment reconciliation and investigations by providing an enriched data model based on ISO 20022. SWIFT s DLT demonstrated progress in DLT technology and helped identify issues that still need to be addressed to achieve industry-wide adoption. Specific challenges include the need to develop unique value propositions in response to the different levels of sophistication, automation and past investments of banks. In addition, it is crucial that integration with legacy back office applications and co-existence with existing processes is considered. It is still early days for the latest generation of Blockchain technology, and it will take time before it is mature and scalable enough for mission critical applications, but SWIFT will continue to test applicable use-cases in payments and trade finance on the technology. Is SWIFT looking to build sustainable competitive advantage through acquisitions or by building internal capabilities?