Talking heads: Cross-border payments - keeping pace with change

Becky Clements, Director of Payments at UK Finance sits down with Vikesh Patel, Deputy Head of SWIFT UK, Ireland and Nordics, in the first of our three-part series examining how the world of cross-border payments is transforming. In this first article, the pair take a look at the drivers for change.

Vikesh Patel: The world of payments has changed beyond recognition in the last decade. Our experience in the consumer world has been revolutionised by digital technology; we take for granted being able to check our payments and account balances via a few taps on a phone screen. But in the bank-to-bank space this level of innovation has been slower to materialise. Why do you think that is?

Becky Clements: The simple answer is that there is a host of added complexities when you start to move money across borders. There are a number of factors at play: different currencies, domestic payments, business practices, time zones, as well as regulation and compliance to consider. All of these things can stifle the level of innovation.

In the UK, we?ve seen major innovation from opening up the market to new entrants, which has raised the bar in terms of choices for customers and the level of service that can be delivered.

But this couldn't have been achieved in isolation. It's about collaboration, finding common solutions to problems and standardisation - without standardisation you can't make it attractive enough for everyone to move in the same direction from a cost point of view.

To truly transform correspondent banking, banks the world over need to come together around a solution that works for everybody; no matter how challenging that may be.

VP: As you mentioned, the UK has been at the forefront of payments innovation. It was one of the first countries to embrace a domestic real-time payments infrastructure, and is at the epicentre of the fintech community with challenger banks and payments services providers disrupting the market. How has this shaped expectations in the cross-border ecosystem?

BC: The main influence I think has been the shift around customer experience. You touched on this earlier, but digital technology has set the bar extremely high in terms of the level of convenience in our day-to-day lives. From my mobile phone I can seamlessly pay friends and family, order a taxi, and do a host of other things in seconds.

People are now bringing that mindset and that expectation into the business world. Corporates who are moving millions of pounds of value through their banking partners expect the same levels of transparency, speed and detail at their fingertips.

Incumbent players and new entrants alike are demanding real-time information. They also want ease of access and interoperability, which is why standards such as APIs and cloud delivery are favoured. Banks and fintechs want to be at the cutting edge and satisfy those needs, as well as bring exciting new products and services to market quickly.

VP: In your day-to-day discussions with UK Finance members, what are the pain points that frequently crop up when it comes to cross-border payments?

BC: Transparency is key. Not having visibility on fees is damaging for liquidity and certainty, and is a major obstacle in providing a seamless customer experience. It stalls trade and creates friction between banks.

Speed is also a major recurring theme. I remember in the not-too-distant past service level agreements of five working days to handle a payment. That simply wouldn't stand up to the modern demands of banks, corporates, and fintechs. Everyone is expecting faster, more immediate access to their funds.

And finally, having the ability to track payments and to receive a confirmation that it has been credited, is fundamental to modern business practices. Without that, you?re always in limbo as to whether the payment arrived, and if it doesn't, you have a long and arduous process of chasing it up manually. That's a huge frustration for banks.

It's why SWIFT's gpi initiative is so important. Once 100 per cent of banks connected to SWIFT embrace gpi, many of the challenges we?ve discussed can be overcome, and the opportunities unlocked.  

In part two, Becky and Vikesh will discuss how SWIFT is driving adoption of gpi as a catalyst for change in the community. Find out more about SWIFT gpi at