by Michael Scholl
DTCC’s long-standing relationship with SWIFT has expanded over the years to give customers of both companies more options for costeffective connectivity and access to their respective services. SWIFT is the Belgium-based, member-owned cooperative that operates a worldwide financial messaging network for its clients. (SWIFT stands for Society for Worldwide Interbank Financial Telecommunication.)
DTCC’s connectivity with the SWIFT network, called SWIFTNet, underscores its commitment to serve the global financial industry, both in the U.S. and overseas, according to George Perretti, DTCC managing director, Corporate Business Continuity. Connectivity between the two organizations also helps DTCC offer its services to new international customers, given the global reach of SWIFT’s network.
Serving customers globally
“We listen to our customers and many of them, especially those outside the U.S., want to use SWIFTNet to access certain DTCC settlement-type products and services,” said Perretti. “It is a cost-effective option for connecting to DTCC for firms that already use SWIFTNet for the bulk of their file and message transmission.”
The link also makes DTCC services available to new firms within SWIFT’s global client base. “We have clients around the world who want to use DTCC services,” said Brett Lancaster, managing director, Securities Initiatives, SWIFT Americas. “If they are not connected to the DTCC network, we can offer them access via their existing SWIFTNet connection, which serves their needs and promotes traffic on our network. It also allows SWIFT to offer clients a single gateway for their connectivity needs, which saves them the cost of establishing a dedicated link to DTCC – so it is a win all around.”
The types of applications that DTCC is making available via SWIFTNet have been chosen based on the customer preferences, according to Perretti. And demand for these services is robust. “We closely monitor all traffic on SWIFTNet,” said Lancaster, “and growth for DTCC in terms of traffic is running at about 30% a year, compared with an estimated 4-5% across all our Americas’ clients.”
SMART and SWIFT
DTCC’s network, called SMART (Securely Managed and Reliable Technology), is a fully managed, encrypted and dedicated connection to DTCC. It gives customers end-to-end connectivity support for all DTCC clearance, settlement and information-based services. SMART supports the entire settlement infrastructure of the U.S. capital markets by connecting a nationwide complex of networks, processing centers and control facilities. It is highly secure with multiple, independent levels of redundancy.
Like SMART, SWIFTNet is a highly secure, redundant, members-only network. Through SWIFTNet, member institutions can exchange messages and files with any other SWIFTNet member worldwide, without establishing an individual connection. Different from telecommunications companies that offer connectivity options, SWIFT also offers a range of value-add services, such as validating messages, standardizing message types, and storing and forwarding messages.
The SWIFT community consists of 9,500 banking organizations, securities institutions and corporate customers in 209 countries.
Choosing an option
The choice between SWIFTNet and SMART often comes down to how much messaging volume an institution has with DTCC, according to Louis Colombo, DTCC vice president, Information Services. In fact, many of the institutions that connect to DTCC through SWIFTNet rely on that network for the bulk of their message traffic.
Another factor that may influence the connectivity decision is that firms with global businesses sometimes look to have one infrastructure for all of their connectivity.
“For certain firms, SWIFTNet presents a good connectivity alternative from a cost and efficiency perspective, and we at DTCC are committed to helping our customers cut their costs while simultaneously providing them with superior service and risk management,” said Colombo. @