SWIFT on the run
Do fintechs challenge the cross-border payments incumbent?
On October 23, The Economist published an article discussing SWIFT and the challenges it faces. There is no doubt that SWIFT, or the Society for Worldwide Interbank Financial Telecommunications should be worried.
Incumbent tech players—think of the dominating forces, reviled yet intractable—are finally facing their moment of reckoning. Hungry fintechs are coming for the huge slice of pie that represents online payments. In the last year alone, writes the Economist, “[m]ore than $140trn has been transmitted… equivalent to 152% of global GDP.”
Despite geopolitical and security threats, SWIFT’s biggest threat comes not from fintech startups per se, but credit-card players and big banks. Their lack of fealty to SWIFT and desire for increased control have led to lots
While its relationships and incumbent status surely give it a competitive edge, SWIFT will struggle to innovate and pivot quickly. Speed and control will guide the fight over money’s movements. In short, SWIFT isn’t.