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Swift gpi looks to set new global payments standard

After a successful year-long pilot phase, the new Swift global payments innovation (gpi) messaging platform is now live, but it still has some way to go before meeting Swift’s aspiration of it being adopted as the global standard.

The gpi has been highly praised for how it updates existing messaging systems. The platform is an overlay onto the current Swift messaging system, but provides far more detailed information on each transaction sent. Users of Swift’s FINCopy technology and standards are capable of adopting gpi.

Each transaction has an individual number assigned to it, allowing it to be tracked end to end.

TS Shankar,
Standard Chartered

“The additional data, in the form of a gpi reference number, is added on to an MT103 message when it is sent,” says TS Shankar, global head of clearing and liquidity products at Standard Chartered. 

“The applicant bank and thus the applicant get to see when the payment was delivered and all the fees deducted by the beneficiary gpi bank through an MT199 message that is sent back when the transaction is delivered.”

Banks that have not updated their systems to use gpi can continue to use Swift messages, but will not have the enhanced level of detailed information available for each transaction.

Says Shankar: “Working on the existing rails means implementation is not an onerous project. It is making effective use of the existing product suite, and is a lot simpler than changing to a new platform.”

The service allows banks to give treasurers a full overview of where a payment is in the chain, and when it has been received. 

Bob Stark-160x186
Bob Stark, Kyriba

Bob Stark, vice-president of strategy at treasury solutions provider Kyriba, says the gpi offers long-term value for corporates that make a high volume of cross-border payments. 

“While CFOs and treasurers will benefit from the same-day settlement of payments, the greater transparency of payments from initiation to receipt will be extremely valuable in CFOs’ ongoing battle against fraud and cybercrime,” he adds.

Since the service is run on the same rails as the current messaging platform, why not just create an update? 

During the trial phase of gpi, Wim Raymaekers, global head of banking market at Swift, told Euromoney that a strong motivation for the industry was the need for richer data to be included in the payment messages. Having this amount of data requires better technology and greater digital capacity, hence the need for a modernized service.

Harry Newman, global head of banking at Swift, says: “The difference in using the gpi is having an overlay system on top of the current system. It is not just an update in terms of doing things differently – it is having a new system in parallel to it.”

Further updates will be needed to keep up with Swift’s plans

“There need to be some updates to integrate the tracking capability, so there is some work to do to get there,” adds Newman. “For many it has proved quite small. It is not an enormous undertaking, particularly when compared with building from new, which would have required a great deal more work.”

The gpi has been configured so that updates can be easily implemented – and use of blockchain might be among them. Newman says a proof of concept has already been launched at Swift.

Wim Raymaekers,

Although only 12 banks are now live with gpi, they account for 75% of all Swift traffic. The next step is to make the service a better tool for the correspondent banking ecosystem by having a high number of smaller, regional banks on board. 

“The aim is to have gpi as the standard,” says Newman. “The financial community expects this to be the new norm. It could take time, but it is the way for the future. It is not a question of doing this for a short time and then deciding to stop.”

Standard Chartered's Shankar says Swift is endeavouring to educate its users to further reduce the deficit. 

“Swift is actively using every forum to be in front of their clients," he says. "The strategy on gpi is very prominent, and they are looking to ensure it is properly represented across each market. 

"Individual banks also need to work on educating their partners about the benefits. At Standard Chartered we are actively involved in speaking with our correspondent banks globally. It’s a community effort.”

Stark at Kyriba says there is a great deal for corporates to gain from there being a broad spectrum of bank users. There might be a competitive advantage to the banks that are already using the service. 

“I think corporates who send payments via banks that are not part of the gpi rollout will be disappointed, which may create an advantage for those that have partaken of Swift's initiative,” he says.

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