According to IATA’s Orejas, “What gpi does, through bank collaboration, is establish a set of strict business rules to make the process much smoother. As a treasurer, this translates into an enhanced payments service, with same day use of funds, transparency of fees, end-to-end payments tracking and the certainty of having remittance information transferred unaltered. This ultimately allows us to more efficiently manage our cash positions and improve our working capital management. What’s more, because gpi offers the potential to monitor the underlying data and charges behind every payment, we could even see a refresh of bank pricing and T&Cs.”
Increasing value for all corporates
Lack of transparency poses a major challenge for treasury teams – particularly those managing an in-house bank or payments factory – situated at the centre of a company and its multiple entities. As the centre of expertise for payments in the company, and also when managing relationships with the company’s banks, treasury regularly faces questions and requests for updates on a payment’s progress.
“I think most corporates are at the mercy of the same issue – and that is a lack of cross-border payment visibility,” says Thibault Moncouet, Corporate Finance Operations, Airbus Intergrated Treasury. “Having tracking capabilities means knowing precisely where any payment is on the network at any given time. The time we spend trying to get more information about the state of payments, not least in dialogue with the banks, is recaptured.”
The most advanced banks today are already passing on the increased transparency directly to their corporate customers by making gpi payment tracking information directly available through their e-banking portals. As such this is a win-win for banks and their customers as it improves customer satisfaction and means that banks need to spend less time answering operational queries related to payments’ statuses and claims of non-receipt of funds, as the information is directly available to the corporate.
It is easy to see how quickly the value of gpi can spread. By just one bank making gpi tracking information available via their portal, thousands of corporate users instantly benefit.
Creating a new standard for multi-banked corporates
For all the benefits that offering gpi tracking information directly to corporates via bank portals provides, this also poses a significant challenge for corporates having multiple banking relationships.
For a company with ten, or even 20 banking relationships, it is extremely time-consuming and resource intensive to have to go into each bank’s web portal or contact each bank for an update. What’s more, banks do not all provide the same details, for example about fees or routing, further complicating treasury’s task of reconciling payment amounts with the back office. And finally, even when information is available in the banks’ web portals, corporates still need to transfer it to their own treasury management systems to fully integrate gpi into their business processes.
To address these issues, in early 2018 SWIFT launched the gpi for corporates pilot programme to define and implement gpi standards for corporates working with multiple banks. The new standard aims to streamline the process for corporate treasurers by allowing them to initiate and track gpi payments to and from multiple banks in a single format and integrate gpi flows in ERP and treasury management systems.
“It is important for us that our banks offer a standardised solution, instead of us having to adapt our systems differently depending on the bank we are working with,” says Moncouet. “The gpi for corporates pilot is the perfect opportunity for us to collaborate with peers and banks to co-create a common solution that responds to our requirements. In addition, a common gpi experience across banks will allow us to benefit from additional insights regarding our payments. This includes track and trace capabilities, and information regarding cost and bank performance. SWIFT gpi enables better strategic decision-making and much improved straight-through processing.”
The service is tailored to meet the specific needs of multi-banked corporates. In addition to allowing them to initiate and track payments, corporates also receive confirmations once the payment reaches the final beneficiary bank. This makes the entire cash management and cross-border payment process much more efficient including, for example, when the final beneficiary claims that they have not received the funds. In such a case, if the instructing corporate has received a confirmation, they can respond directly to the end beneficiary that the funds have arrived at their bank and avoid potentially lengthy disputes.
The new gpi for corporates service harmonises practices across banks, including how fees are reported and bank routing information. It can also easily be integrated with corporates’ existing treasury management systems and connectivity channels, and allows messages to be exchanged in both SWIFT FIN and ISO 20022 format.