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In the final part of our series looking at the world of cross-border payments, Becky Clements from UK Finance, and Vikesh Patel from SWIFT UK, Ireland and Nordics, look at how SWIFT is aiming to further reduce friction, and how new technologies are playing their part. You can read part one here, and part two here.
Becky Clements: We have talked a lot about the challenges that banks face when it comes to sending cross-border payments. SWIFT gpi is answering a lot of those challenges, but there still remains some friction in the correspondent banking world. I am thinking about exceptions and investigations. For example, a lot of UK Finance members still expend significant time and resources in chasing up payments which have been blocked for one reason or another. How is SWIFT ironing out these inefficiencies?
Vikesh Patel: SWIFT gpi is already bringing significant benefits to investigation and inquiry management by delivering increased transparency and end-to-end tracking of payments. Even though nearly all payments on SWIFT gpi are credited within 24 hours, for the few that don't arrive in that time for compliance or regulatory reasons, we?re working on more ways to make the experience of resolving the case as seamless as possible.
The best way to do that is to stop a case arising before it happens. That's why we?re introducing a pre-validation service through gpi which allows banks to pre-fill and check key payment information by using API calls. This allows you to determine in advance if you need to provide a tax code in a certain country, for example, so you don't find out this information was required only when the payment has been returned.
We know that when exceptions and investigations arise, and that they can be a pain to resolve. To help ease those that still happen, we?re trialling a new solution which allows the originating agent or beneficiary bank to send a message to the gpi tracker and find out at what point the payment is in the chain. This allows banks and other payment providers to quickly get to the root of the problem when the customer calls, and then get in touch directly with the bank in question meaning no more speculative emails, faxes and phone calls, and no more wild goose chases.
BC: Over this series we have covered a lot of ground about how banks can benefit from gpi by enhancing their operational efficiency, but what about for corporates, especially ones with multiple banking partners? Ultimately, they too stand ready to greatly benefit from some of the features gpi offers. What can we expect in terms of improving the experience for corporate treasurers?
VP: One of the reasons we started gpi was to make life easier for corporate treasurers. It's already delivering benefits for them - cross-border payments on gpi are fast - and with traceability, corporates can get visibility on fees, FX and remittance information, which makes reconciliation much more straightforward.
We are building this out further this summer by rolling out our new standard for gpi for corporates. This will allow corporates who have multiple banking partners to get access to all their gpi payment information, from all of their banking partners, in one place. This is an immensely powerful proposition for them. It gives them a seamless customer experience across banks, allows them to standardise treasury processes, and get valuable insights into their bank relationships.
Later this year we?re evolving that to address receivables. One solution we are working on is an integrated request to pay solution - if you?re a seller you can provide all of the necessary payment information to your buyer, and with that data track the payment through gpi as it comes in. This frees up liquidity for corporates, but it also builds better relationships between buyers and sellers and allows the movement of goods and services to flow easier.
BC: A lot of column inches have been dedicated to new technologies, such as distributed ledger technology (DLT) and APIs, and how they are shaking up the world of financial services. What are you doing to enable these types of technologies to unlock new value for the SWIFT community?
VP: Our number one focus is on delivering a great experience for our community and providing a platform for them to provide a great experience for their customers. Technology can be an enabler in delivering this.
We have a proud heritage of innovation and we have been working tirelessly to explore new technologies to see whether they can add new value.
We are already seeing what the power of API technology in particular can do through SWIFT gpi. Many of our customers are exploring ways to use the gpi Tracker API, for example, to build new value on top of their existing offerings for customers.
We?re excited to see how this can be taken further.
On the DLT front, one project we?re working on is to link up participants in closed trade ecosystems with gpi to handle the payment leg of a trade. So if you are conducting a transaction with another corporate on the blockchain, but need a trusted payment leg of that trade using fiat currency, our solution will be able to provide off-ledger settlement with confirmation back to the blockchain that the payment has been made.
This solution will be prototyped at this year's Sibos, which happens to be taking place in London, so we encourage everyone to come down and see it in action!
To find out more about the roadmap of SWIFT gpi, visit: https://www.swift.com/our-solutions/swift-gpi/the-future-of-swift-gpi.
Becky Clements, Director, Payments, UK Finance
Vikesh Patel, DEPUTY HEAD OF UK, IRELAND AND NORDICS, SWIFT UK