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Published on: 5/17/2007
Last Visited: 5/17/2007
Issue 101, Oct 06 - Swift's head of securities Jim Donovan is not afraid of a challenge and with the network's aggressive plans for change over the next four years, he'll certainly be faced with one
After taking over from Francis Remacle as Swift's head of securities last year, Jim Donovan has certainly had his work cut out for him.
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Donovan's appointment at Sibos in Copenhagen followed a 17-year tenure at Citigroup where he had responsibility for marketing and sales, strategic planning and business development for the worldwide securities services division.During his time at Citi he was, by his own admission, less aware of Swift's role in securities than he feels he should have been.This lack of "mind share" in the securities industry is exactly the area in which Donovan has decided to focus his energies over the next couple of years.
"All of my businesses used Swift but all I knew about Swift was that it worked.I didn't have to pay much attention and nobody from Swift was coming to talk to me about the strategic benefits and the values.We were basically in an environment where we bought communication capability from Swift but without any strategic intent," he explains.
One of Donovan's primary strategies is to move Swift from being perceived as a vendor by the market to a position of partnership with the industry."To have somebody say, in two to three years, if one of their subordinates brings them a problem with messaging between counterparties: ‘Have you talked to Swift?' That would be the perfect indication that we have succeeded in positioning ourselves more as partner with the industry than just as a vendor," Donovan explains."Our challenge is to move our message up within the hierarchy of our customer organisations so that view of partnership is held by the senior decision makers as opposed to the day to day folks who are involved in the business.We have a great relationship in the back office and at the low end of the business model but we do not have a great amount of resonance at the high level of these organisations."
Due to his relative closeness to the market, Donovan feels that he better understands the detail and the depth of the industry.His appreciation of the instruments, services, processes and customers, and where Swift has an opportunity to be more meaningful to the industry at large, will therefore be vital to getting closer to the market over the next four years."It's probably pretty clear that coming out of the commercial world and spending 20 years on the other side as a user and customer of Swift permits you to bring new, and I hope refreshing, perspectives to what Swift ought to be doing," Donovan says.
He hopes that his industry experience will lend Swift the commercial perspective that it has, until this point, been vitally lacking.Donovan explains, "I think that you have a tendency in any organisation to become a little insular over time.So I believe that commercial experience will help us to be faster, better and more focused."
However, the transition from working in the commercial world to working in a cooperative space has provided its own challenges for Donovan."Coming out of the commercial space into a company like Swift, which is a cooperative not for profit organisation takes a little adjustment.Especially coming out of the commercial world at Citigroup for 17 years where we were probably known as a little more aggressive than the average institution in financial services.Learning to adapt to the style of Swift was something that I had to pay attention to.Understanding that a cooperative organisation is not driven purely by commercial interests is something that you have to be mindful of when you come out of the other side," he says.
Donovan is confident that Swift has great potential in the future securities landscape: "One of my main reasons for joining Swift was the unbelievable opportunities that I saw for this company to be so much more for the financial services and transaction banking industries."This idea of raising Swift's ambitions is in fact key to the network's 2010 strategy (which you can read about in detail on page ???) and as securities traffic has this year reached level pegging with payments, Donovan's plans for the future are likely to mean big business for the messaging network.
"I have been able to help my partners on the executive steering group focus on some of the things that are opportunities for us to be perceived more effectively as partners with the community that we serve and you see some of those things in our 2010 strategy," he explains.
Donovan is very positive about the level of receptivity for change that he has witnessed within Swift over the last year.
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Since his appointment, Donovan has managed to achieve a number of significant milestones for Swift.He has restructured the securities industry division, which will go into effect in September, so that it will reflect the securities industry's segmentation.Swift will look much more like its customers in terms of the way they think about themselves in day to day business, says Donovan.
He is also in the process of creating a virtual business organisation to replace the current focus on sales and marketing within Swift."That will take the functional partners that we have within the Swift organisation in areas like technology and operations and customer service, and put them into each of the segments in a fixed reporting way," he explains.These segments will be run by people from the marketplace - professionals from the industry who have credibility and understand and speak the language of the customers.
"The matrix environment will give each of those business heads an opportunity to have an end to end capacity to service the customers of Swift, which has not been the case in the past.We have traditionally been very functionally oriented and I think that fragments the client experience and it has prevented us from getting as much penetration in the securities industry as we would have liked to.This new focus will help us to dramatically change our image in 2007 and beyond," Donovan says.
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Swift's announcement of a collaborative agreement with FpML at the end of June is another milestone for Swift and it is the first in a long line of planned collaborations with other key players in the securities and alternative instruments marketplace, says Donovan.It is part of the network's plans to do more with the existing players in the industry that have "high quality capabilities" and that serve the customers that Swift is seeking to reach."I see no reason for us to build redundancy into the system and since there are many good service and product providers out there, my objective is to try to find ways in which we can bring them all together to provide more end to end coverage for the industry and more STP," he explains.
With regards to getting his message out there, Donovan is certainly no shrinking violet.He is keen to make the industry aware of the securities division's importance to the future of Swift and highlights the fact that it has been given its own individual stream at Sibos as proof positive of this fact."Part of the challenge with events such as Sibos is that we need to reflect that securities volumes are now 50% of what we do at Swift and it is more than 60% of its growth.The industry of financial services is going through a significant transformation in respect of the fact that our traditional business in cash management and payments is a much more mature business than the securities industry and one that is in the process of consolidation.The securities business on the other hand is benefiting from dramatically increasing infusions of capital into investment vehicles in anticipation of trying to fulfil the needs of the baby boomers, which is going to go on for the next 20-25 years," he concludes.
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