Corporate treasurers’ group TWIST is putting pressure on banks to create a single payments standard and to stop trying to manage identities. The case is strong and SWIFT is already listening.By Chris Skinner.

The saying “the customer is always right” does not always work with banks, which is why banks’ largest customers have ganged together to change things. The gang is called TWIST and what it is doing may change the way banking is delivered forever.

TWIST started in 2001 as a treasury team looking at ways to harmonise standards in the supply chain. That is still its aim but it now has some heavyweight backing in the form of John Sculley, the former CEO of Apple and Pepsi-Cola. Mr Sculley is involved because TWIST partners with IdenTrust for identity management, which he chairs.

Why is identity management a big deal? Treasurers were less concerned in the days before internet payment because most of the supply chain involved some form of face-to-face connection. However, with ubiquitous internet connectivity spawning continual attacks on systems and transactions with the world’s largest organisations, corporate treasurers are becoming worried.

The banking world probably thinks that it owns the payments issue, but corporate treasurers disagree. Banks may issue identities in the form of account numbers but treasurers would contend that banks do not manage identities. Individuals can have multiple accounts. Equally, global account number formats are not even standardised. As a result, treasurers believe that banks should issue identities but not manage them.

Identity management is not the only area in which corporates are trying to force banks to do things their way rather than the old way. Creating a single standard for payments is another.

TWIST has been pushing hard to bring standards together and was heavily involved in the development of ISO20022, the standard that is meant to unify SWIFT and FIX. That was until the FIX group dropped out because it felt that ISO20022 was re-inventing its wheel.

The outcome is that there is no single standard for payments… yet. But that is what TWIST is pushing for and, if it gets the momentum, will achieve. Certainly, SWIFT has taken note. A few years ago, the idea of giving corporates direct access to SWIFT would have branded a banker as a heretic, and yet SWIFT is doing just that. Another result for the customer.

Between building new processes for identity management, creating new ways of processing payments, pushing hard to create standards, forcing banks to follow their lead and generally telling the banks to pull their socks up, TWIST is making a strong case for banks to listen. After all, the customer is always right.

Chris Skinner is an independent financial commentator (www.balatroltd.com). He is a member of the executive board of TWIST.

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