SWIFT gpi, Cross-Border Payments for the Digital World

Why is SWIFT gpi so key for cross-border payments?

SWIFT gpi is not a one-off delivery or by any means static – it is the payments community pushing ahead and developing additional features on top of the interbank network. With SWIFT gpi now accounting for more than 50% of SWIFT payments traffic, access to thousands of banks globally and the ability to maintain reliability and data integrity, it is clear that cross-border payments are undergoing much needed improvement. 

Any solution that offers transparency of fees and allows member banks and their customers to review charges or agree fees is promoting welcome process efficiencies for banks and their customers

Putting the customer front and centre through full transparency and access to data

Many banks have told me that they haven’t received a single RFP from a corporate customer that doesn’t contain questions on how they support SWIFT gpi and how customers can improve the level of information that they receive on payments. This is because corporate customers understand the value of having transparency in fees, FX rates, payments status – and the ability to self-serve. Whilst each bank will have its own unique advantages in joining SWIFT gpi, all banks suffer the same disadvantage if they don’t: They aren’t offering their customers the services that they demand and expect, whilst their competitors are.

The other advantage to enhancing the data transparency that you provide your customers is that you enable them to self-serve which reduces customer support calls s by 50%, according to SWIFT’s Global Payments Innovation Report, published in August 2018.

My colleague Lu Zurawski supports SWIFTS’s ambition to allow customers greater access and control of their data; “the spirit of these payment guidelines is to ensure that account holders have full visibility and control over their payment accounts. This shift towards customer-centric transparency of payments information is to be welcomed.”

How does SWIFT gpi fit into the ‘Payments Modernization’ model?

SWIFT gpi is part of a wider payments modernization trend. In fact, 58.5% of banks polled during a recent SWIFT gpi webinar said that they were implementing SWIFT gpi because they saw it as a key solution for modern day payments, while 56.6% said it was to improve customer experience.

We typically don’t have conversations just about SWIFT gpi, it generally features as part of a wider discussion around a solution that includes real-time payments, open APIs or compliance with PSD2 mandates. And these solutions all expose banks to fintechs that can help drive transaction volumes. A good example of the impact of transactions being driven by fintechs would be UK Faster Payments, which has experienced 18% year-on-year growth, but with the impact of open banking witnessed 25% growth in 2018.

Whilst banks realise they need to evolve their payment engines to cover current and future payment innovations, not all can afford to do a total overhaul of their infrastructure all at once. That is why it is important for solution providers to offer banks the flexibility to do smaller technology upgrades while keeping an overall view of what the next steps are and realistic timelines. Ultimately, it is all about choice, and banks need different solutions for SWIFT gpi – there is no one size fits all.