Leonard H. Schrank does not have time to savor his recent appointment to one of the most prestigious technology posts in banking - the helm of the Swift network.

The American software entrepreneur and former Chase Manhattan Corp. executive had to pay attention immediately to Swift's image, which has been tarnished by several network glitches, and to competitive attacks on the global bank communications network by telephone companies and banks.

Meanwhile, many American bankers have long been suspicious of Swift, believing it is more closely allied with European interests.

Growth Has Been Strong

Swift - the Society for Worldwide Interbank Financial Telecommunication - is a cooperative based in Belgium and has some 2,500 bank members. Its volume has grown about 15% annually over the past five years to 1.6 million messages a day, including interbank payment instructions.

In view of the negatives, Mr. Schrank, 45, decided to spend some of his first days as chief executive officer stateside, visiting last week with senior payments executives at the top New York banks. He was accompanied by Swift's chairman, Eric Chilton, an executive of Barclays Bank.

Their message: Swift will focus on the quality of its core services and will work closely with its 25-member board of directors, on which Citicorp and BankAmerica Corp. represent the United States.

"Truthfully, we haven't had a good strategy - the previous regime didn't work with the board," Mr. Schrank said in an interview. Bankers saw Swift "going off to develop new products" but neglecting the basic network services.

By promoting discussions within the board, he expects to "go a long way toward opening the lines of communication."

A focus on quality is necessary in the wake of several network outages in the early stages of the cutover to Swift 2, the long-awaited enhancement to the Swift network, in the summer of 199 1, said Mr. Schrank, who succeed Bessel Kok as CEO.

Mr. Kok oversaw a rapid expansion that included the network upgrade and a series of products that brought Swift closer to the line of competing with its owner-members.

Over the past two years, Swift introduced services ranging from bulk file transfers to netting for the foreign exchange and money markets, and it has begun a test for the exchange of payment instructions associated with corporate-to-corporate payments.

Nonbanks Still Welcome

Netting is a service that Mr. Schrank considers part of the core list of offerings. He acknowledged that others are farther afield from Swift's "utility" charter.

But Mr. Schrank said Swift would remain open to nonbank institutions such as securities firms, which account for a small percentage of transaction volume. In June, Swift agreed to allow investment fund managers to use the network after some of them threatened to set up a rival system.

"The Swift position is unique," Mr. Schrank said. "I believe we're surrounded by unlimited opportunities, and the only things that could stop us are a failure to execute, and complacency."

Mr. Schrank said he was glad to be moving his wife and two children to Brussels, in part because it is only a two-hour drive from Paris, where his wife, Patricia, grew up.

Born in Brooklyn, N.Y., and raised in Vienna, Va., Mr. Schrank co-founded a software company at age 24 while he was an undergraduate in electrical engineering at the Massachusetts Institute of Technology.

His company, Dynamics Associates Inc., was a spinoff from an MIT research project in econometrics.

An Early Struggle

"We bootstrapped it" with little capital, Mr. Schrank said. "We worked for low salaries, we borrowed money from our parents, our brothers, our uncles." The firm successfully marketed an early version of a decision support system for Wall Street broker

In 1977, Interactive Data Corp., an information services subsidiary of Chase Manhattan Corp., acquired Dynamics, and Mr. Schrank moved with it. Chase sent Mr. Schrank to London to run IDC's international activities for about a decade.

In 1988, Chase sold the unit to Dun & Bradstreet Corp., and a year later, Mr. Schrank left to help start another company, Infomatics Inc., a Boston software company that sells medical information systems. Mr. Schrank is continuing as an adviser to Infomatics.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.