It is no secret that cross-border payments have been historically laden with problems of delays and errors, unclear payment status and fees. To address these issues, Swift launched the global payments innovation (GPI) with the goal of significantly improving the customer experience by increasing the speed, transparency and tracking of cross-border payments. This initiative from Swift involves more than 120 key transaction banks from more than 200 countries and territories around the world, and because Swift is where the critical mass of cross-border payments happen, its global payments innovation has been hailed as one of the biggest advancements in international payments in several decades. The initiative is designed to be functional at the short, medium and long terms.
As banks rationalize their cross-border networks and customers and regulators demand better servicing, an initiative like Swift gpi becomes even more important due to new entrants pushing the limits every day through digital innovations and new, disruptive solutions.
The defining features of Swift gpi
Swift gpi comes with many new and crucial benefits. One of its key features is the ‘track and trace’ functionality where the Tracker, a cloud-based Swift database collecting real-time, end-to-end views on payment status, facilitates banks in providing corporates with updates on the status of the payments as well as the potential fees applied by intermediary banks as the payment gets processed. As a result, treasurers can receive confirmations when payments have been credited to a beneficiary account. This ensures transparency on fees and FX rates further ensuring there are no additional deductions to the original amount and that the full amount is transferred. An execution without delay is achieved along with Rich Payment Data (initially 140 characters) being transferred unaltered, facilitating reconciliation.
Swift gpi can be defined as a better SLA between banks and Swift. It currently remains optional for banks but its ambition is to create a new standard in cross-border payments. BNP Paribas is live on Swift gpi for a first set of BNP Paribas entities. In the months to follow, the bank will be rolling out tangible, customer-centric functionalities based on the already vast gpi network in order to make the best use of this framework. In keeping with its strategy, BNP Paribas will not require its clients to make infrastructural changes on their systems, their platforms or payment files. Wherever possible, the bank will automatically originate payments as Swift gpi payments.
Swift gpi in the middle-term
One of the first functionalities to appear in November 2018 will improve handling of cross-border payments by allowing banks to stop a payment, no matter where in the correspondent banking network it might be. It will also offer an international payment assistant to increase the straight-through-processing rate of cross-border payments at origination. Furthermore, the application of MT103 rules to MT202 Cov to allow tracking of the money flow when payments are sent through the cover method will also follow.
As more and more banks and market infrastructures connect to the network, the coverage of services will become more extensive.
BNP Paribas is proud to be part of the ‘Swift gpi for Corporates’ pilot group where corporates and banks are working together with Swift to come up with the best possible bank-to-corporate interaction. This will allow exchange of gpi information, including recommendations for MT and ISO messages. Production traffic is expected to start before Sibos 2018.
The Swift gpi initiative has also laid the foundations for fruitful partnerships between banks and the fintech industry ushering in new services and functionalities in cross-border payments. The Swift gpi community through a hackathon, has identified two fintechs, AccessPay to provide forecasting information on incoming payments and Assembly Payments to provide a solution for requesting international payments, thereby ensuring higher accuracy in mandatory fields’ data.
Making Swift gpi a new standard
BNP Paribas is committed to supporting Swift gpi as the new standard to improve client satisfaction in cross-border payments. The high sign-up rate among Swift banks is evidence of the marketplace’s commitment to this initiative. An extended Swift gpi community will enhance these new standards in order to extend its benefits to more and more clients.
The involvement of corporates in the development of new functionalities remains indispensable. With many more exciting developments and advancements around the corner, BNP Paribas is eager to co-create new functionalities with, and for, corporates.