Chainlink, SWIFT, and Corporate Actions: Revolutionizing Finance

Chainlink, SWIFT, and leading financial institutions are collaborating to modernize corporate actions, slashing costs and boosting efficiency.

Chainlink, SWIFT, and Corporate Actions: Revolutionizing Finance

The collaboration between Chainlink, SWIFT, and major financial players is set to overhaul how corporate actions are handled. This initiative promises to cut costs and improve efficiency in global finance.

The Pain Points of Corporate Actions

Corporate actions, such as dividends, mergers, and stock splits, have long been a source of inefficiency in the financial world. The current processes are fragmented, error-prone, and costly. Announcements are often relayed through PDFs and press releases, leading to delays, modifications, and lost data. The result? A staggering $58 billion in annual costs for the global financial system.

On average, a single corporate action requires 110,000 firm-to-firm interactions and costs $34 million to process. Even with decades of investment, a whopping 75% of institutions still manually recheck the data. Talk about a headache!

Chainlink, SWIFT, and the Solution

Enter Chainlink, SWIFT, and a consortium of 24 financial giants, including Euroclear and DTCC. Their solution combines Chainlink’s oracle technology, AI, and blockchain to create a “golden record” of corporate actions. This single, verified version of events is shared across all participants, ensuring accuracy and transparency.

The system supports ISO 20022 messaging via SWIFT and distributes verified data across DTCC’s AppChain and other blockchains using Chainlink’s interoperability protocol. Validated disclosures, even in Spanish and Chinese, are delivered in minutes instead of the typical 24-48 hours.

Key Benefits and Results

The new infrastructure achieved 100% data accuracy on tested events and introduced roles for data attestors and contributors, enabling institutions to verify and enrich records. This means faster, standardized, and error-free data, reduced processing costs, and greater transparency for investors.

The Future of Corporate Actions

The next phase involves expanding the system to cover more complex events like stock splits and rolling it out to additional markets and currencies. The ultimate vision is for the platform to become core infrastructure for automated post-trade processing across a wide range of asset classes.

SWIFT's Broader Blockchain Initiatives

SWIFT isn't just stopping at corporate actions. They've also launched a blockchain-based shared ledger with over 30 global banks and Consensys to facilitate instant, 24/7 cross-border transactions. This ledger uses smart contracts and is designed to compete with stablecoins, aiming to blend blockchain programmability with the predictability and transparency expected in regulated banking.

Why This Matters

By proving that blockchain, AI, and existing banking rails like SWIFT can deliver instant, standardized data, this initiative lays the groundwork for faster, cheaper, and more transparent markets worldwide. It’s about time we brought corporate actions into the 21st century!

Personal Take

It's exciting to see established institutions like SWIFT embracing blockchain technology. The collaboration with Chainlink and other financial organizations demonstrates a real commitment to innovation and efficiency. While challenges remain, the potential to reshape global settlement and reduce costs is undeniable. The integration of AI for data validation is a smart move, ensuring accuracy and reliability.

So, what's the bottom line? The future of finance is looking brighter and more efficient, thanks to these groundbreaking initiatives. Who knew corporate actions could be so interesting?