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SWIFT innovations: a ‘trust score’ (update)

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So, the innotribe session has just come to a close.  I'll post more about the ideas proposed for SWIFT to invest in later, but here's our team's idea.

First, what is innotribe?

It's a stream at SIBOS focused upon finding innovations in finance for the future comprising SWIFT and banks, corporates and anyone else who's interested.

At the start of the week, we created three teams who would look at cloud computing, wikinomics and social crowdsourcing to see if we could find an idea for SWIFT to invest in for the future.

SWIFT gave me the job of managing the group focused upon social crowdsourcing - Facebook, Twitter and all that stuff - along with Tim Collins, Head of Experiential Marketing at Wells Fargo.  Through a self selection process, we were joined by:

  • Patrick Nachtergaele (SWIFT)
  • Linda Haddad (Bank of America)
  • Amr Soliman (e.Vision)
  • Thomas H Wiles (Standard Chartered)
  • Nicholas Moch (SEB)
  • Michael Gialis (Sun Microsystems)
  • I. Vijaya Kumar (Andhra Bank)
  • Dr Brad Pagnell (APCA)

to come up with our proposal for venture capital to expand a crowdsourcing idea.

We all had good ideas, although they are hard to pitch in under ten minutes.  But that's what we had to do today.

So, here's our pitch.

People don't trust each other.

Banks don't like risk.

Could banks use crowds to analyse risks through social media and networks?

If they could, then could the bank community create a 'trust score' that adds multi-dimensional analysis of corporates and individuals by aggregating all the financial and social data out there into something that makes sense?

We think we could and that SWIFT could provide the trusted and secure aggregator of trust scores which are then exchanged to secure transactions between individuals and corporations across borders.

Why is this important?

Because financial information is too stark and lacks completeness of the profile of what someone behaves like and whether they can be truly trusted to trade with:

  • Is there a risk of being involved in moral hazard?
  • What are the attitudes to risk and finance of the person or firm being invested in?
  • If a firm has no record in this constituency, are there other proofs that could be provided?
  • If a firm is trying to do something brand new, is there anything that could increase confidence with those individuals/firms

In this sense, just as you vet employees with social media by checking their profiles, in future we will check customer and client profiles for risk.

The aim therefore of our crowdsourcing group is to create a 'trust passport' that has a variety of critical applications:

  • For P2P transactions where the history of one party is too poor to create trust; incurrent climate, there is no proof of dependability
  • In cross-border transactions where the old way would be to provide a letter of credit but many firms do not understand such letters, particularly small firms and microenterprises working in a globalised world where they need to provide commerce with no track record in a new country of operation
  • In governmental and bank transactions where governments and banks want proof of track record when no track record (financially) is available, e.g. trying to get hold of a visa

This passport and trust score would become critical for not only banked individuals and firms, but also for those who are unbanked or who have no credit history as it offers an ability to use this understanding in other environments where a 'credit history' is missing, such as mobile and gaming where you (a) can pick up behavioural details of transacting in these environments as well as (b) offering a transaction support service by enabling 'trust' in these non-financial environments.

As a result, banks could pickup a lot more business of what would previously have been unbankable due to the richness of this risk information.

The business model is based on a charge per access which may be a charge to:

  • A user who wants to prove their credentials (e.g. an individual or firm that is expanding)
  • A provider who wants to check a user's credentials (e.g. an auto or mobile carrier)
  • A marketing organisation who want to market to a specific demographic and get a charge per clickthrough for having their banner on the trust passport check

Why should SWIFT pull this together?

Well SWIFT would become a gargantuan spider bot bringing together all this data and analysing the chatter of crowds to securely manage and distribute the trust scores and who else is better positioned to be the aggregator, manager and distributor of trust scores?

What's in it for SWIFT?

A new business model that extends SWIFT into non-bank territories, e.g. managing a trusted passport on behalf of the banking community and their customers and offering this as a pay per download/usage/software as a service.

What's in it for the user?

The user can now immediately secure trust with strangers to do business.  For example, the small business in India that wants to trade with the multinational corporation based in the States; the landlord who wants to ensure the prospective tenant is decent and trustworthy; the microcredit farmer who now wants a bank account; the migrant worker who is a new country and needs financial services ... anyone in fact who has no way to prove their standing.

And just like eBay buyer and seller ratings, the more you work on your trust score, the easier it becomes to do business.

There's lots more to this idea, but there's the bare bones.

We presented this to a 'buyers panel' who will choose one idea to go forward with SWIFT's backing to take it to a developed idea (bear in mind that this is the result of just three 1-hour discussions).

The buyer's panel (or it a judging panel?) comprised:

  • Lazaro Campos, CEO, SWIFT
  • Ignace Combes, Deputy CEO, Euroclear and member of the SWIFT Board
  • Guy Kawasaki, Founding Partner and entrepreneur-in-residence, Garage Technology Ventures
  • Gottfried Leibbrandt, Head of Markets, SWIFT
  • Kosta Peric, Head of Innovation, SWIFT
  • Javier Santamaria, Assistant General Manager, Banco Santander Spain and member of the SWIFT Board
  • Paul Simpson, Managing Director and Global Head, Treasury and Trade Solutions, Citi

The winner will be announced in this afternoon's plenary and I'm interested to see what happens, especially as I have a £20 bet
with Nick Davies of the Cloud Computing team that our idea will win.

Obviously the Hong Kong Jockey Club's experience has really gotten me in the mood for gambling.

UPDATE: I just gave Nick HK$240 (£20) as he won!

His team's idea was very similar to above, but is based on SWIFT managing a secure vault based upon the Deathbook concept I blogged about a while ago. 

No hard feelings ... and pigs fly as well ;-0

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Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

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