The use of the SWIFT network would benefit Lloyd's more than its own solution
The advantages to Lloyd’s in linking up with the SWIFT network would be huge. If chief executive Richard Ward’s six-year performance at the International Petroleum Exchange is anything to go by, he will jump at the opportunity to link Lloyd’s to the rest of the world.
But connecting to the SWIFT network would not provide the complete solution for reform on its own, as it is limited to electronic messaging post-placement. Placement of risks would appear, for the time being, to be left in the hands of individual companies. The future may bring some form of global trading system, but that remains to be seen – and in any case, the discussions on the use of the SWIFT network remain in their early stages.
But using SWIFT would mark an important step forwards. It would also be a step into a realm that has been tried and tested by banks all over the world: SWIFT was formed in 1973 and now links 8,332 financial institutions in 208 countries. The current London-specific solution, Xchanging, offers a valuable service but could not contend with a global competitor.
