Swift Payments CEO Doesn’t See Block Chain Replacing Current ‘Efficient’ Banking Systems

October 16, 2015 6:51 PM UTC

While Swift CEO Gottfried Leibbrandt acknowledges that block chain technology is here to stay, he believes some of the current fintech being spoken about is “hype” and notes that blockchains in the private sphere are more substantial than it getting to replace existing commercial banking systems.

Speaking to the Financial Times, international payments network Swift CEO believes there to be an underlying “hype” when it comes fintech and claims that the current financial industry ought to be more worried about the current state of cybersecurity rather than disruptive technology.

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) hosts the annual Sibos conference, a coming together of bankers and vendors from around the world. It’s popular among those in the industry with this year’s conference drawing up to 7,000 attendees.

A fintech sceptic, Leibbrandt sees the current interest in fintech to take a break eventually. “After his hype, at some point there will be some sobering up,” he noted, speaking to the publication.

Speaking at Sibos in 2014, Leibbrandt reportedly said that cryptocurrency technologies, while disruptive, wasn’t one to “be disruptive until the next 10 to 20 years.” Now, he notes that he was referring to the notion of fiat currency being replaced by bitcoin or block chain anytime soon.

Elaborating on the potential disruption that a technology like block chain can bring, he notes that private blockchains are far more of a threat than that posed by the technology to existing banking systems. More specifically, those that operate efficiently.

Do I see it replace [central securities depositories], or do I see it replace [real-time gross settlement systems]? I am less sure. They work right now, so why would they go?

He added that block chain is an “interesting technology to watch” with a multitude of applications beyond Bitcoin, talking to the American Banker. While mentioning the advantages of block chain with the ethos and technology being open-source that comes with “resiliency,” making it hard to corrupt besides being available all the time, anytime, he also noted its drawbacks.

“Who is the ultimate beneficiary, what is it for, what invoices does it pertain to- that’s not handled well by the block chain,” he contends. Furthermore, the points to the system being open for everybody and would require encryption for it to not be verifiable by anyone with a copy of the block chain. Casting doubts on how “interoperable” block chain technology would be with existing systems, he added:

It [block chain] would be a great solution if you were to design it from scratch, but you don’t start from scratch, you start from existing infrastructures.

Image from Shutterstock.

Last modified: June 13, 2020 9:36 PM UTC