Addressing recent moves to impose international sanctionson Iran, SWIFT's CEO Lazaro Campos said that “the moment thewording is clear” on the European Union legislation now beingdrafted, the secure global financial messaging network will cut offthat country's central bank and other financial institutions. “Wewill disconnect and not wait for the approvals,” Campos told the400 attendees at the annual SWIFT Operations Forum Americas heldthis week in New York City.

“No one wants to be in the middle of a political discussion,”Campos acknowledged to the session moderator, NPR's DavidBrancaccio. “We want to work with every community,” Campos said.The Belgium-based messaging network that is integral in enablingfinancial institutions to move vast amounts of money around theworld was named recently in legislation both in Europe and the U.S.“The U.S and Europe are not that far apart. They want the sameoutcome,” Campos said.

Moving on to other topics, Campos spoke about how thecooperative has changed since 2007, “We were in denial,” he said ofthe financial industry's immediate post-financial crisis state. Nowthe operative word is “transformation, and in that transformationwe really do not know where we are heading, so we need to beprepared for a world that is changing every day.”

What Swift and other organizations have done is “become moreagile—you become more efficient, you prepare for many morescenarios that you were not prepared to tackle in the past. Youbasically become more nimble, and it is not simple to become nimblein 210 countries,” he said.

So far, things have worked out well enough. “The last two yearshave been the best two operational years we have ever had atSWIFT,” he said. “We have increased our efficiency by 30%, reducedcost 20%, and 10% of the savings we have to invest in thefuture.”

Nonetheless Campos says that while the world is four years intothe recovery, the process has five years more to go. “But even inthe slow economy, there is still opportunity to gain market share,to do business,” he said. “Not much is going to change in the nextfew years. We need to get on with it.”

Part of SWIFT's getting on with it is facing up to regulation.“We used to stay away from regulation and only talked about it inthe implementation phase. I think the main difference now withregulation is that some of you may want us to be involved in itearlier,” he said. “There are 400-some pieces of regulation,90-some have been discussed, and 300 are yet to come. Theoperational impact of this is enormous, and that has a significantimpact on your business and whether you will be able to operate. Ithink that it's imperative that we make sure regulation can beimplemented in a way that is efficient. That is the difference inthe Wall Street now and the Wall Street before. We are going to beinvolved when the content is discussed.”

The focus on regulation and government sanctions to promoteforeign policy and fight financial crime has actually turned into anew product area. Sanctions Screening over SWIFT, which launches inApril, provides smaller financial institutions with a centralizedservice to filter messages through selected sanctions lists from 16jurisdictions to identify non-compliant messages. The service alsoprovides updated lists.

On the corporate side, the news is the launch of a pilot versionof Alliance Lite2 on April 16. The Lite2 product is a cloud serviceand allows companies to send up to 2,000 messages a day, comparedwith the 4,000-message limit for an entire month with Lite 1. “It'sa major paradigm shift,” said Ed Adams, regional director of SWIFT,adding that the Lite2 product allows companies to use SWIFT'sentire message set, whereas Lite 1 was much more limited. Lite2will appeal to a much broader segment of corporations. About 500are currently on Lite 1, and “there is no sunset date for AllianceLite 1,” Adams said. Lite2 is set to go live in July.

Meanwhile, progress continues on SWIFT's involvement withelectronic banking account management (eBAM) and SWIFT SecureSignature 3SKey, another conference session revealed. Much workneeds still to be done on standards, said Stacy Rosenthal,commercial manager of initiatives for SWIFT Americas, while GlenSolimine of J.P. Morgan pointed out that eBAM is now an industrymovement and “it's going to take banks, vendors and corporationsworking together to make it a reality.”

A working group is currently under way to look at theregulatory issues involved in getting 3SKkey approved for use invarious countries and jurisdictions, Rosenthal said. SWIFT'sCentral Utility project to ensure that eBAM standards are uniformactually wrapped up in January “because everyone was soenthusiastic about it,” Rosenthal said, when it was only supposedto run eight weeks. “And now actually we're working together withthe industry to build a business case,” she added.

For more on sanctions, see SWIFT May Expel Iran Central Bank. And for a look atSWIFT's central utility,
see ShapingEBAM Standards.