Developed in the early 1990s by the International Standardization Organization (ISO), the ISO 15022 standard for securities messaging used in transactions between financial institutions is providing a more efficient way to track a multitude of assets – both conventional and Shariah compliant.
Among ways this ISO standard has been crystalized is through the MT535 format by the Society for Worldwide Interbank Financial Telecommunication (Swift) – which provides the foundation for an asset-tracking service provided by French-Lebanese fintech XFolio.
“I invested in various private banks in Switzerland and London and found it impossible to consolidate my portfolios. I had to hire someone to manually pull data in pdf files from different platforms just to understand my net worth,” XFolio founder and CEO Anis Rahal told IFN Investor.
From dealing with various clients, Anis learned this pain point is universal for many investors seeking to better manage multiple custodians, legacy tools and fragmented records. “This is not a luxury product. This is a necessity. The old model doesn’t work anymore.”
VC firm Middle East Venture Partners readily agreed and recently invested US$2 million into XFolio – describing the service as a “smarter, faster alternative to legacy treasury and asset management systems. Say goodbye to manual data keying, clunky software and year-long implementations with new seamless financial messaging, AI-powered forecasting and full automation”.
The XFolio service specifically takes advantage of two Swift coded messages – the MT535 format for portfolio statements and the MT515 format for buy and sell orders – which are typically not used outside of back-office operations.
As defined by the ISO, the “message is used to report, at a specified moment in time, the quantity and identification of financial instruments which the account servicer maintains for the account owner. The statement is used to reconcile the books of the account owner and the account servicer for the specified safekeeping account or sub-safekeeping account.”
Anis said these formats are underutilized but incredibly powerful – most clients are unaware that these codes make it possible to have real-time data feeds via host-to-host linkages. “Without connectivity to banks and market data providers, even the best solution is useless. At XFolio, we focus on seamless connectivity through application programming interfaces (APIs), host-to-host and Swift protocols.”
Such a fundamental approach bypasses hurdles faced with the open banking concept – which is great in theory but frustrating in execution as every bank publishes its own API. For any investor with multiple assets, a large team is needed to stay updated as most bank APIs change monthly.
With teams at its Paris headquarters, tech hub in Beirut and an office in Dubai, XFolio has already integrated most Gulf bank APIs – finding that banks in the MENA region and across Africa are more advanced than some in Europe and the US. “We already have 10 clients live, with half in the UAE and Saudi Arabia.”
The XFolio service is especially attractive as its tracking goes beyond bank accounts – to support other non-marketable assets like real estate or even olive trees. Its integrated service offers flat pricing – making the tracking platform affordable to clients with smaller portfolios.
“We’re not competing with information providers or trading systems. We’re solving a niche but critical problem: fragmented portfolio visibility.”
