Interbank co-operative Swift is collaborating with Symbiont and seven securities firms to test a blockchain-based corporate actions system.
The pilot will leverage Symbiont’s proprietary technology platform, Assembly, which utilizes smart contracts and blockchain capabilities to deliver automated corporate actions data to multiple market participants in near real time.
Swift has enlisted several leading custodians and asset managers, including American Century Investments, Citi, Vanguard, and Northern Trust, to take part in the project.
“Major asset managers have hundreds of custodian relationships, with assets and securities spread across various counterparties,” explains Jonathan Ehrenfeld, strategy director at Swift. “When a corporate event occurs, these asset managers and intermediaries receive information from many sources, leading to potential issues.”
Analysis by Swift reveals that 30% of the costs associated with processing corporate actions data stem from manual activities such as data cleansing, formatting, and interpretation.
“By combining Symbiont’s Assembly and smart contracts with Swift’s extensive network, we can automatically harmonize data from various sources related to a corporate action event,” states Swift CIO Tom Zschach. “This can create significant efficiencies. Corporate action data from Swift messages is translated by the Swift Translator and uploaded into Symbiont’s blockchain. Their smart contract technology can then identify discrepancies, contradictions, or inconsistencies across custodians.”
“If the solution is successful, intermediaries will receive fewer queries from clients regarding corporate action data. Additionally, global custodians and asset managers could decrease the number of personnel dedicated to manually processing corporate action data.”
Zschach mentions that the project is currently in development with a pilot group of participants set to test it and provide feedback later this month.
“We will compile the results and share them with the community,” he adds. “If successful, we look forward to expanding coverage to more corporate event types and evaluating the potential for broader application within the Swift community.”