Concluding what was once a hot debate, the shareholders of Swift, the bank-owned global financial messaging service, voted overwhelmingly in favor of allowing limited nonbank access.
During the vote, which was held at Swift's annual meeting in Brussels, nearly 71,000 shareholders favored allowing nonbank corporations to exchange trade confirmations over Swift's network. Only 20 voted against nonbank access.
Swift, formally the Society for Worldwide Interbank Financial Telecommunication, is used by banks, securities firms, stock exchanges, and others to exchange in standard computer formats messages related to funds and securities transfers.
As a result of the vote, Swift will develop systems that will allow nonbanks to access its foreign exchange matching service. By moving to dedicate gateway software and servers to the service of the nonbanks, Swift hopes to isolate them from the core service and thus head off one of the main objections to their participation in the network.
The overwhelming vote in favor of nonbank access also puts to rest several years of often heated debate over allowing nonbanks to connect to Swift.
Nonbanks have long clamored for Swift access. They are especially eager to use it foreign exchange trade confirmations, which are one of the network's fastest growing categories of transactions.
But banks feared such a move would constitute a loss of control over the network, which handles messages affecting about $2 trillion in financial transactions daily.
The financial community's stance has gradually softened over time as Swift's users understood the positive implications of nonbank participation: namely, faster processing of transactions, which reduces settlement risk and yields more accurate information of trade deals.
Such nonbank trade information is currently transmitted using telephones, faxes, and proprietary systems.
"What I think was approved is good for the banks, good for the corporate customers, and good for Swift," said Leonard Schrank, the organization's chief executive.
The newly approved service will be marketed by banks and will involve PC-based software linked to a gateway server on the Swift system.
"The banks will still maintain a good relationship with their corporate customers," Mr. Schrank said. "Swift isn't getting in between them," referring to Swift's expansion to a more customer-focused service.
More than 4,700 financial institutions in 129 countries participate in Swift.
