Treasury Today Country Profiles in association with Citi

SWIFT’s gpi goes live

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With SWIFT’s global payments innovation (gpi) initiative officially launched last week, Treasury Today finds out what it means for corporate treasurers.

Last Thursday (16th February), SWIFT announced the launch of its global payments innovation (gpi) initiative, a little over a year since it kicked off in December 2015.

Billed as creating “the next era for correspondent banking” the initiative is designed to improve the customer experience in correspondent banking by increasing the speed, transparency and predictability of cross-border payments.

At launch, 93 banks were involved in the initiative, channelling payments into 224 countries and representing 75% of all SWIFT cross-border payments.

Overcoming pain points

So, what exactly is SWIFT looking to do through gpi? “Customers are asking for end-to-end transparency of payments, enabling tracking of the payments process, and, above all, clarity on time of receipt,” says Wim Raymaekers, Global Head of Banking Market at SWIFT.

“The traditional correspondent banking model, whilst working well, does not meet these expectations,” he says. “Payments are slow and can take multiple days to complete. And to make matters worse, treasurers have little to no transparency on how long the payments will take or any fees deducted.”

SWIFT gpi aims to change this, offering corporates the ability to make payments with same day value, obtain transparency over fees, increase certainty by offering end-to-end payments tracking and ensure that remittance information is transferred unaltered.

The initiative aims to do this by enforcing a new service agreement for banks, which will then be responsible for turning this into a value proposition for their clients.

New technology?

Some, however, are critical of SWIFT’s gpi initiative, claiming that simply issuing a new multi-lateral service agreement is not enough to solve the issues that exist in the cross-border payments space and that new technology – notably blockchain – is required.

Raymaekers refutes these claims on two levels. Firstly, he notes that SWIFT has been very deliberate not to throw the baby out with the bathwater. “We want to bring the benefits of gpi to treasurers right away and the existing technological infrastructure enables this,” he says. “This is how we have been able to launch gpi in a year.”

Also, by decoupling the business rules from the technology, Raymaekers highlights that SWIFT is able to take advantage of any new technology once it becomes commercially viable. Indeed, SWIFT are already exploring how blockchain can be used by banks to improve the reconciliation of their nostro databases.

Raymaekers also underlines that gpi has already leveraged technological innovation, most notably the tracking service delivered in the cloud. “This information layer is a true innovation and enables corporates to send not just the payment, but also a rich data file – it is the DHL of payments,” he says.

Further development

The development of gpi doesn’t stop here, however. Raymaekers is keen to note that there is a roadmap for additional services that includes the ability for corporates to request payments through the SWIFT network.

“We are also looking to provide enhanced capabilities allowing banks to stop payments,” he says. “Treasurers can sometimes make a mistake and pay the same supplier twice or make an operational mistake, so having the ability to quickly and easily stop these payments will save them a lot of time and effort.”

Tell us what you think

Now that gpi is live, Treasury Today is interested in hearing the corporate perspective and if the service meets expectations.

Have your say by contacting the editorial team.

Reader Comments 

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  1. This is overdue and Swift has developed this to stretch its virtual monopoly for bank's international transfer that is being threatened by the development of blockchain tech. In order to stay relevant Swift needs to be in the forefront of this new tech.
    Romaldini's Gravatar

    Romaldini 2017-02-23 13:28:06

  2. I applaud this initiative to improve the transparency and feature set of international payments. Corporate Treasuries have waited for the "DHL of payments" since Heidi Miller of (then) JPMorgan made that analogy for the first time at SIBOS 2004 (!) in Atlanta. The initiative however fall short in including the instructing parties and beneficiaries in the development and roadmap. Despite the success claimed, Corporate customers still have to see the first payment that they could actually trace and or where the speed of execution was actually improved. It is not a DHL experience if only DHL knows where the package is at any time and the same is true here. The pressure from emerging technologies is big and until concrete implementations and customer consultations take place, it remains a facelift to an antiquated payments model.
    aunterste's Gravatar

    aunterste 2017-04-05 14:31:04