Tom Zschach

Swift’s chief innovation officer talks about collaborative innovation, continuing work on the Swift platform strategy and learning the lessons of lockdown.

Tom Zschach was 10 weeks into his role as chief innovation officer (CIO) at the Society for Worldwide Interbank Financial Telecommunications (Swift) when the Covid-19 pandemic hit. He maintains that his plans and Swift’s goals overall have not fundamentally changed, but admits this period has shed light on how important innovation is to the financial industry.

“We’re still here to collaborate; we’re still here to innovate responsibly,” he says. “[Covid-19] has been a catalyst to reinvent and do things at pace. It highlights how important innovation actually is, not just innovation in terms of frictionless payments, for example, but innovation in terms of how to keep people productive when they’re not in the office.”

We certainly didn’t lower the bar on development, or compromise data privacy or security

Tom Zschach, Swift

Digitalisation of financial services products has long been on the to-do list of many CIOs, and the global pandemic has only brought this forward. While Covid-19 has accelerated a number of projects at Swift, Mr Zschach says considering regulations and protecting customer data remain a top priority.

“We need to make sure that we don’t lower the bar on the things that are most important for the financial ecosystems,” he says. “This idea of ‘run fast and break things’ — we really can’t break things; we need to maintain security and stability throughout.”

Two-pronged approach

Announced last September, Swift’s two-year platform strategy aims to enable member firms to deliver instant and frictionless end-to-end transactions. This summer Swift released two products as part of that strategy: Payments Pre-validation and Swift Go.

Payments Pre-validation allows banks to verify payee account details before an international payment is sent. Swift Go allows financial institutions’ small and medium-sized enterprise and retail customers to send fast, secure, low-value cross-border payments directly from their bank accounts.

Career history: Tom Zschach 

  • 2020 Chief innovation officer, Swift
  • 2014 Chief information officer, CLS Group
  • 2011 Chief information officer, LCH Clearnet
  • 2007 Managing director, Bank of America Merrill Lynch
  • 2003 Managing director, Barclays Capital

“Those are two examples that have come out of it that I’m proud of, in terms of how we responded and the kind of feedback we’ve taken from our customers on those two services,” Mr Zschach says. “We certainly didn’t lower the bar on development, or compromise data privacy or security — we’d never do that. But it has actually given us more focus on how we can help our customers.”

While the overall innovation plan for Swift has not altered much since January 2020, central bank digital currencies (CBDCs) have emerged as a major topic during the pandemic. During this period, Swift completed a thought leadership piece looking at the evolution of CBDCs, as well as conducting cross-border payment experiments examining their viability.

“We were able to engage and collaborate with our community [on CBDCs],” Mr Zschach says. “I use that as an example of the progress that we made, even though we didn’t expect it when I started in 2020.”

Scaling up

While the role of innovation at large, legacy organisations is often a topic of debate, it is the 40-year-old membership structure of Swift that puts innovation at the core of its DNA, says Mr Zschach.

An example is the Swift Global Payments Initiative (Swift gpi), which was launched in 2016 with 15 global players and is now used by more than 4000 institutions. Swift gpi was developed with a small group of financial players before being scaled up for the wider community.

“We have the ability to start with a small subset and solve a very practical customer problem … and then we can scale it, and do it and run it the way that people expect Swift to do that,” Mr Zschach says.

It is that collaboration, born out of its role as a member organisation, that aids Swift’s innovation process. “We actually think that the community can build better solutions together than any one participant, even the most sophisticated, smartest participants,” he says. “And we can do that in a way that serves all of our customers.”

A virtual world

During his tenure, Mr Zschach has been pleasantly surprised by the eagerness of the Swift community to work with the organisation. “They bring very important problems that they feel Swift is in a great position to help provide a solution for, as well as bringing other people to the table to help develop that solution and [drive] adoption across industry solutions,” he says.

Heading into Sibos, Mr Zschach admits to feeling what many others have felt over the past 18 months: Zoom fatigue.

“I feel pretty lucky that I can actually do my job from home, as not everyone can,” he says. “We’ve been able to stay productive; we’ve been able to keep in touch with our colleagues and our customers, but it’s not a substitute for being in a room with a colleague, or being at an event or having a client meeting with a whiteboard.”

While continuing the innovation journey at Swift and heading into a second virtual Sibos, Mr Zschach says that he hopes to take what he has learned from working through the pandemic and “develop really good habits. So we can be in a much better place, a much more efficient, productive, mentally healthy place as we return to the office.”


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