How SWIFT gpi Will Change the Cross-Border Payments Market
SWIFT global payments innovation (gpi) is ushering in a new dawn in international transfers which, quite frankly, has been a long time coming, especially when you consider the current race to real-time payments. The world is getting smaller and faster, and cross-border payments are about to catch up.
Customers are demanding not only faster settlement, but also improved customer service around their international transfers. Fintechs can succeed in many cases because of the transparency and usability they provide across a variety of financial services.
SWIFT gpi will not only deliver a much-needed improvement in the speed of transaction, but also improve overall customer experience by creating predictable settlement times and clear statuses, through additional information on remittances and transparency around the FX rates and fees applied throughout the payment cycle. The usability of this information and the overall customer experience is greatly enhanced through the cloud-based tracker.
The devil is in the detail
For banks, the most value lies in the tracking of this new, readily available data. Data is clearly the path to improved customer experience. Rich data allows banks to solve a significant number of customer issues, such as questions around the status of payments. In today’s world, customers hold their financial institutions more accountable, and they expect better service. They want to know why there is a delay with their payment, if there is an issue, and why the recipient received less than they sent. This expectation of clarity is forcing banks to adapt new business models. Increased transparency puts more power in the hands of banks and their customers, as they can compare rates, charges and conformity to Service Level Agreements (SLAs) amongst banks, and it puts the onus on the bank to improve their SLAs.
So what can banks do?
Banks need to take advantage of the opportunities that SWIFT gpi offers, and leverage the power of the data to create value added and high quality solutions. They can then create differentiation to retain customers and win new business. Through data analysis and business intelligence, banks can identify valuable market segments that are being neglected or positioned for growth, and channels that are not currently cost-effective. The right mix of pricing and services based on data intelligence will deliver value for both the customer and the bank, and ultimately generate new revenue.
Each to their own
Different banks have different strategies when it comes to the application of SWIFT gpi, and it will be interesting to see where they find success. The New Payments Ecosystem is increasingly unpredictable, so these use cases for SWIFT gpi will be broad, and we may see traction in unexpected areas. It will be critical for banks to be agile; able to adapt to emerging trends and launch new services quickly to retain their competitive edge.
Traditionally, large banks have opted for on-premise solutions, but the proliferation of cloud-based solutions as a mainstream alternative has changed this sentiment, as banks of all sizes can be quick to market with new offerings (such as SWIFT gpi), without having to reengineer their payment systems. In fact, cloud solutions are becoming more attractive to larger banks to help layer additional functionality onto legacy systems without over loading them, and with a quicker time to market.
We have lift off
We are starting to see the first steps toward the implementation of SWIFT gpi. More than one hundred banks worldwide have signed up to the initiative, with 20 percent of these in the U.S. These global institutions represent 75 percent of all SWIFT cross-border payments.
With wider adoption of SWIFT gpi, it may become the norm for international remittance, rather than the exception.
Wijay Asirwatham leads Product Strategy for Global Wholesale Payments, including SWIFT, at ACI Worldwide. If you want to learn more about SWIFT gpi, cross-border and real-time payments, he will be at SWIFT Business Forum New York, June 14, 2017.
Related Blog Posts
Open Payments Systems for Merchants: Don't Close Down Your Options
Remember “Open Systems”?
It was a big industry nom du jour in the 80s and 90s. Every IT system had to be open and therefore flexible and future-proof. Nobody can argue with the logic behind this; making systems easy to integrate with other systems, ensuring vendors could cooperate with one another; creating agility to improve time to market and drive down costs.
Building Trust in Open Banking with Behavioral Biometrics and Machine Learning
Strategies for fraud prevention in payments are having to evolve quickly, as new technologies emerge and digitalization of the banking ecosystem continues at pace. I spoke with Giselle Lindley, Principal Financial Crime Consultant at ACI Worldwide and Tim Dalgleish, Head of Threat Analytics, Asia Pacific at BioCatch to understand how financial institutions can use payments intelligence to build trust in this challenging environment.
Why It’s Time for Women to Rise UP
As a senior software engineer at ACI Worldwide, Rawan Shawar helps to guide her team’s priorities and enhance processes at both the team and organizational level. Recently, Rawan was selected by the organizers of Money20/20 Asia to be part the Rise Up Class of 2019.
Can Digital Payments Be Kind?
There is no doubt that the era of less (or minimal) cash is truly upon us. According to the Access to Cash Review, cash could fall to just 10 percent of all payments in the UK within the next 15 years.
Other countries, such as Sweden, have already seen significant changes – cashless payments have grown so quickly that only 10 percent of the 20 SEB banks in Stockholm now hold cash. Beyond Europe, China is leading the way with USD$12.8 trillion in mobile payment transactions in 2018.
Knowing New Customers – And How Shared Data Helps in Fighting Fraud
As the eCommerce industry continues its rapid growth, the lines between physical and digital shopping are becoming increasingly blurred. These changes are creating a number of challenges for merchants, not least around customer visibility and fraud prevention.
Reducing Fraud and Improving Customer Experience with Machine Learning
Julie Conroy is research director for Aite Group’s Retail Banking practice and covers fraud, data security, anti-money laundering, and compliance issues. Recently, Julie teamed up with ACI’s Marc Trepanier for a webinar, Key Trends in Payments Intelligence – Machine Learning for Fraud Prevention. I sat down with Julie to get her take on the topic.
Why Non-Functional Requirements Should be a Few of Your Favorite Things
It’s not unusual for me to be questioned by retailers as to why some payment solutions are priced differently or more expensively than others – in fact, it would be unusual not to be asked those questions when dealing daily with procurement and finance teams of major multi-national multi-channel merchants!
Keeping Up With Fraudsters: A Month Isn’t Enough
As the Government of Canada campaigns for improved fraud prevention and awareness this month, I’d like to do my part as a fellow Canadian, and shed some light on why payments need to stay a step (or more) ahead of fraudsters, today more than ever.
Local Perspectives: Real-Time Realities Across Asia-Pacific in 2019
Money20/20 Asia returns to Singapore this week, attracting payments professionals from around the vast APAC region – and beyond. The real-time and open imperative is one of the reasons why all eyes are on Asia-Pacific when it comes to payments, so I caught up with ACI payments experts representing three of the key countries within the region, to take the pulse of real-time schemes that are in varying stages of maturity.
What it Takes to be an ‘Influential Woman in Payments’ [Q&A]
Coming off the back of International Women’s Day this past weekend, PaymentsSource has recognized the Most Influential Women in Payments, spanning multiple industries including financial services, retail, investment and technology. Among the honorees is ACI’s very own Carolyn Homberger, group president, global sales. Part of the executive leadership team at ACI, Carolyn leads a team of payments professionals operating across all global regions, and plays a critical role in setting business strategy. As an advocate for the leadership and growth of women in the payments industry, Carolyn is also responsible for launching ACI’s own Women’s Initiative.