Global payments transformation means industry collaboration and co-creation

At Sibos 2019 in London, The Paypers sat down with Wim Raymaekers, Global Head of Banking Markets at SWIFT, to discuss key themes emerging from this year`s conference, predictions for the next year in the payments sector, as well as insights into what the co-operative is currently working on and plans.

Could you please elaborate on the latest developments at SWIFT?

Recently at Sibos 2019 in London, we announced a new service aimed at delivering global instant payments by integrating gpi, the cross-border payments service, with real-time service levels, into domestic instant payments systems around the world. The service – which gives speed, clarity on fees, and predictability on when an end beneficiary’s account will be credited – will be available to all types of banks’ end customers, from large multi-nationals to SMEs, and from retail to ecommerce platforms.

Several global trials have already demonstrated SWIFT’s ability to deliver international payments in just a few seconds by integrating gpi with domestic real-time systems. A trial with the New Payments Platform (NPP) in Australia delivered payments between Australia and China in 18 seconds. Earlier this year, a trial in Singapore with Fast And Secure Transfers (FAST), involving 17 banks across seven countries – Australia, Canada, China, Luxembourg, Singapore, Thailand and the Netherlands – saw payments between all continents settle within 25 seconds; the fastest in just 13 seconds. In addition, a trial has concluded in Europe between the European Central Bank (ECB), SWIFT and a group of 19 banks using the TARGET Instant Payments Settlement (TIPS) platform. The trial with 12 banks sent cross-border payments from nine countries (Australia, China, Germany, Hong Kong, Italy, the Netherlands, Russia, Thailand and the US) into Europe via five banks. A speed of 41 seconds has already been achieved in a payment sent from Singapore, cleared via Germany, and credited to the end beneficiary account.

Furthermore, due to the ongoing work and collaboration with banks, corporates, and vendors, other new solutions have been launched by SWIFT that aim to create a step change in global payments. We announced a new cloud-based payment investigation and resolution service, allowing for query handling between banks on the SWIFT network. This enables them to resolve instances in which required operational, regulatory or compliance information is incorrect or missing from payment instructions.

We also released the SWIFT gpi stop and recall functionality, enabling financial institutions to immediately stop payments in flight, reducing the risk of fraudulent or erroneous transactions. With this service, banks are able to stop a payment instantly, regardless of where it is in the payment chain, thanks to the unique tracking code linked to any SWIFT gpi transaction. Moreover, if the payment was already credited, the instructed bank would receive an immediate recall of funds instruction.

What were the key themes emerging from Sibos 2019 in London?

Certain themes came up time and time again, including a few key areas raised by industry speakers and panel guests. One of them was SWIFT gpi, which improves cross-border payments for corporates and across the correspondent banking network. SWIFT gpi is already carrying over USD 300 billion a day in more than 150 currencies across more than 1,100 country corridors. On average, 40% of SWIFT gpi payments are credited to end beneficiaries within five minutes and almost 100% within 24 hours. By embracing the new standard in global payments, financial institutions are now sending and receiving funds to anyone, anywhere in the world, with transparency over where a payment is at any given moment.

SWIFT gpi improves the cross-border payment experience for all parties thanks to transaction trackability, which provides real-time information to the entire payment chain.

Furthermore, much of the industry’s focus is on gpi for corporates, a capability designed and built in conjunction with banks, corporates, and treasury software providers, which enables multi-banked corporates to initiate and track payments across multiple banks directly from their treasury and payment systems. Following a pilot with 22 corporates and banks, SWIFT gpi for corporates went live in July 2019. Pilot organisations included Airbus, Booking.com, General Electric, Bank of America Merrill Lynch, BNP Paribas, Citi, Deutsche Bank, JP Morgan, Societe Generale, and Standard Chartered Bank. It enables corporates to initiate and track gpi payments to and from multiple banks, directly from their ERP and treasury management systems.

The service enables banks to give their corporate clients visibility, transparency and control of their entire payment flows and provides them with transparency over fees and FX.

Another subject taking center stage at this year’s Sibos was Open Banking and finding new ways to deliver new and compelling user experiences. Broadly, the mood music around Open Banking was of optimism and the market is now focusing on identifying where the real consumer needs lie and how they can use the Open Banking to address them.

What is SWIFT currently working on? Are you planning to release any further updates at the start of next year?

We see a very exciting roadmap coming up. Looking back, we started with one focus, SWIFT gpi customer credit transfer, and now we have ten additional capabilities; obviously, the roadmap has really expanded into the evolution of gpi. An area where we’re putting a lot of focus is on the gpi for corporates – working with banks, corporate and vendors – to integrate the gpi experience into the corporate treasury world. We also put much effort into reducing friction in cross-border payments and reducing the amount of time it takes to resolve an issue.

Currently, we’re working on new developments on inbound flows and improving collections, so that corporates can track and trace incoming and outgoing transactions and receive notification and status information of incoming payments. This will enable monitoring of their settlement and counterparty exposure, accurate and timely institutional intraday liquidity management and forecasting.

What are your predictions for the next 18 months in the payments sector? What developments do you think the industry will see?

The innovation that has transformed domestic retail payments is facilitating huge improvements in cross-border payments as well. Translating these gains to cross-border payments is more challenging for a number of reasons. Nearly 200 different currencies and jurisdictions globally means different challenges to overcome to make seamless cross-border payments a reality. Nevertheless, new technology and the demands of the global economy necessitate ever-faster, secure payments and I think this will be the major focus over the next 18 months.

All payments in the future will need to be instant, transparent, ubiquitous, and secure – account-to account, anywhere, at any time. With our new gpi instant service, we are creating a cross-border payments experience on par with domestic systems.

Stay tuned for Sibos 2020 in Boston from 5 to 8 October 2020 at the Boston Convention and Exhibition Center (MCCA)!

About Wim Raymaekers

Wim Raymaekers is Global Head of Banking Market at SWIFT, where he leads banking initiatives worldwide and is responsible for developing and driving value propositions across the banking community. In this capacity, his mission is to help banks grow their business in view of evolving customer needs, technology innovations and market requirements. Most recently, Wim is leading SWIFT’s global payments innovation (gpi).

About SWIFT

SWIFT is a global member owned cooperative and the world’s leading provider of secure financial messaging services. We provide our community with a platform for messaging and standards for communicating, and we offer products and services to facilitate access and integration, identification, analysis and regulatory compliance. Our messaging platform, products and services connect more than 11,000 banking and securities organisations, market infrastructures and corporate customers in more than 200 countries and territories.