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SWIFT gpi: Leveraging Cross-Border Payments for the Real-Time World

SWIFT gpi cross-border payments for real-time world

SWIFT gpi represents the evolution of business done over the SWIFT network, bringing correspondent banking into the digital era.

I’ve covered this topic before, but with gpi now reaching the two-year milestone, it’s a good chance to reassess the progress that has been made – and what is needed to drive further adoption.

 

How do banks and customers benefit from SWIFT gpi?

According to Damien Godderis, Head of Payment Networks for BNP Paribas, the bank was one of the first globally to prioritize SWIFT gpi because of the added tracking and data transparency of SWIFT gpi that allowed them to better serve their customers.

“Each bank will have its own unique advantages of joining SWIFT gpi; however, all banks have the same disadvantage if they don’t – they aren’t offering their customers the service that they demand and expect, whilst their competitors are. It is time to move to gpi, and not delay until it becomes a mandatory requirement.” – Damien Godderis, BNP Paribas

BNP Paribas also saw SWIFT gpi as a way to save money through increased efficiencies. For instance, enabling customers to self-serve reduced customer support calls by 50 percent. Additionally, it helped them increase efficiency by reducing the internal costs of executing international payments.

This view was supported by bank executives who joined our recent SWIFT gpi webinar, with 58.5 percent saying they implemented or are implementing SWIFT gpi because they believe it to be a key solution for modern day payments, and 56.6 percent saying it is vital to improve customer experience. Only 5.7 percent stated it was because they needed to create new revenue streams.

 

Why are some banks delaying adoption of SWIFT gpi?

The issue here is about prioritization – especially with a growing number of domestic markets implementing real-time payments schemes, leading to internal debates within banks about what to prioritize.

“There’s lots of traffic processed via gpi and so definitively, if banks aren’t yet live, then they need to make this a top priority. gpi is already becoming the new normal for international payments, and all the RFPs that BNP Paribas receives from corporate customers contain questions on how they can be supported for SWIFT gpi.” – Damien Godderis, BNP Paribas

Ryan McAuliffe, Payments Innovation, Data & Analytics Specialist for SWIFT, shared with us that the issue is banks are all at different stages of their platform evolution—the banks that have legacy infrastructures that are stalling due to concerns around integration complexities as well as cost considerations. But SWIFT has 126 banks that have implemented gpi successfully, and they are carrying out ongoing work to make the transition as seamless as possible. SWIFT is also building use cases so banks don’t just comply, but thrive by offering ‘best in class’ solutions to their end clients.

 

What is the solution?

Because of the impact that SWIFT gpi can have on how banks process cross-border payments, simple-to-deploy solutions are key to improving adoption beyond the 50 percent level that we have today. That is why solution providers like ACI offer banks the flexibility to do smaller technology upgrades, while keeping an overall view of the next steps.

Ultimately, it is all about choice, and banks need different solutions for SWIFT gpi – there is no one size fits all. Some ‘market ready’ solutions can be implemented as a stand-alone or as a ‘wrap around’ into existing back office systems to simplify the connectivity and pull the required gpi. This level of flexibility is attractive for banks using multiple systems.

Additionally, picking up on the issue of enabling banks to thrive, it is all about leveraging additional data. Supplementing the SWIFT tracker data via APIs by enabling the integration and storage of all data within banking systems provides a holistic view and enables an end-to-end view that also allows customers to self-serve.

 

Where to next?

The key takeaway for banks is that if they don’t offer their customers SWIFT gpi and the transparency that comes with it, they become less viable for their customers. Whether those customers are corporates, SMEs or correspondent banks, if they can’t get the service they deserve, then offering them half a solution opens the door to competitors.

 

Watch the webinar in full: Leveraging SWIFT gpi for Cross-Border Payments in a Real-Time World

ACI’s SWIFT gpi capabilities were awarded ’ at the MEFTECH 2019 Innovation Awards, based on our work with the National Bank of Kuwait.