In one of the more unorthodox sessions at Sibos 2005, experts from the audience were encouraged to speak about the positives and negatives surrounding the issue of standardization in the securities market.
Hosted by Global Custodian editor-in-chief, Dominic Hobson, self-confessed "standards junkies" engaged in a free-flow of ideas to identify obstacles hindering further progress, discuss ways of improving standards and ponder the notion of compulsory standard adoption.
With his wit, Hobson humoured the crowd from the onset with anecdotes about the industry. Following establishment of the objectives, he opened the floor to delegates to share grievances about the ongoing problems of standards adoption in the securities space.
Although the forum was dominated by several vocal individuals, an overwhelming sense emerged that adoption of standards is and will continue to be a frustrating work in progress.
Speakers were very quick to admit that although squabbling exists in this back office sub-sector, that generally the right people are involved in the process. Several crowd members admitted that a failure to establish a common standards platform probably had more to do with a lack of consensus between the front and back offices at any given firm.
"In our back office there is the overwhelming feeling that senior management only buy into standardization on a high level and hatch their own ideas without consulting us," said one standards expert from the US. "We have many different frustrations regarding the lack of a consensus, we don't really see any communication internally."
Attendees said attention on standards is now very much in vogue, but given the cost of implementing a new standard like the ISO 2002, the process isn't cheap. They said certain front offices appear more content to stay with their original messaging systems.
This isn't to say, however, that ISO 2002 introduction on the SWIFT network hasn't been a successful rollout. According to SWIFT members involved in the discussion, they see an increasing number of institutions signing-up to the ISO 2002, particularly by those without a legacy messaging system.
And in doesn't stop there either, with customers now starting to ask for more features, the protocol's evolution is expected to continue.
With this is mind, Hobson then posed a few questions about the very nature of SWIFT's business, which includes both standards regulation and messaging functions.
After a few minutes of semi-heated debate, the Global Custodian editor-in-chief asked the delegates that if SWIFT split these two functions and established a separate standards business, whether any one would pay for the service. The answer was an overwhelming no, which ultimately sent the message that customers remain very keen on receiving both of these functions for one price.
On the idea of compulsory standards adoption, the "standards junkies" were largely split along geographic lines. European delegates believed the idea to be a positive, but like their counterparts from the US, Asia and elsewhere, stressed that it would be too difficult to regulate and to find an appropriate body to regulate an international standard.