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SWIFT GPI Reduces Cross Border Transactions To Minutes & Seconds

The cross-border payments industry has seen a revolution in speed and transparency over the past decade or so. A generation of new companies are eyeing the role of incumbents and exploring new technologies such as blockchain to transform existing processes.

However, examples of genuine innovation are beginning to emerge amongst both new providers and incumbents. Once such example is the global banking messaging giant SWIFT, which revealed that users of its Global Payments Initiative (GPI) service, are receiving payments within minutes, and even seconds.

SWIFT GPI

Nearly 50% of SWIFT gpi payments are credited to end beneficiaries within 30 minutes, and almost 100% of payments within 24 hours. With all payments fully traceable, there have been fewer enquiry-related queries, reducing costs for banks by as much as 50%.

SWIFT has set the international standard for cross-border payments for over four decades, and this week’s announcement directly addresses the perception that its payments are slow and cannot keep up with the new upstarts.

To the contrary, SWIFT gpi continues to gain significant traction; traffic already accounts for nearly 10% of total SWIFT cross-border payments, and over USD 100 billion is being transacted every day by 150 banks across more than 220 international corridors.

Blockchain?

SWIFT has made it clear that the service currently does not incorporate blockchain technology – making the speed of payments ever-more impressive. Yet, it’s important to note that blockchain is not a panacea; any payment service must offer speed, transparency, industry-wide connectivity and have appropriate regulatory oversight. SWIFT gpi incorporates all of these without incurring huge costs for banks and their customers.

Harry Newman, SWIFT’s Head of Banking commented on today’s announcement, “Thanks to SWIFT GPI, banks are able to credit payments within minutes and even seconds, while their customers are facing shorter supply cycles and able to ship goods faster. This is a very significant step forward for banks and for their customers” says. “In addition, banks receive fewer queries and have told us their inquiry-related costs are reduced by as much as 50% when they use SWIFT GPI. This is a major service improvement to end-users and a considerable cost saving for the industry.”

Looking Forward

It is clear that gpi service has transformed the way cross-border payments are sent and received, and further enhancements appear to be in the pipeline for 2018. As more banks use the service and integrate it with their corporate offerings throughout 2018, the number of corporates will continue to grow rapidly.

With SWIFT already playing a key role in delivering the New Payments Platform in Australia and introducing real-time payments to Europe later this year, it seems 2018 is shaping up to be a key year for the cooperative and its members.

Real-time payments become the new norm in Australia, with Europe set to follow suit

The rapid speeds of modern technology have created the expectation amongst consumers and businesses that payments need to be transferred instantaneously at the push of a button. Global infrastructure provider SWIFT made this a reality this week, with the launch of a real-time payments platform in Australia.

The New Payments Platform’s (NPP) financial architecture has been designed and constructed to transform how consumers, businesses, and governments transact with one another.

SWIFT has supported the evolution of payments systems around the world for more than 40 years. It played a key role in the design, build and delivery of the NPP and will continue to operate its infrastructure. This is the first step in SWIFT’s global instant payments strategy and illustrates a blueprint for what we can expect to arrive in Europe.

Instant payments are set to launch across Europe in 2018, alongside the launch of TARGET Instant Payment Settlement (TIPS), the euro real-time payments service commissioned by the Eurosystem. SWIFT’s new messaging service will harmonize the infrastructure throughout the continent and allow instant payments to be made in euros through both TIPS and EBA CLEARING’s RT-1 instant payments system.

Consumers, businesses and the broader economy are only beginning to see the possibilities with new services such as same-day delivery, just-in-time manufacturing, and instant payment apps. SWIFT currently connects 85 of the 149 High-Value Payments systems in the world, including CHAPS in the UK, TARGET2 in Europe and the SWIFT India Domestic Services. It also offers gateways to instant payments platforms in Hong Kong and in the US. All of this suggests the payments industry has only taken small steps towards reaching its full potential.

It is likely that real-time line-by-line settlement, open access infrastructure that empowers innovation via competition, and overlay services that provide value-added services are likely to become the norm.

This is a once in a generation opportunity to reinvent the payment process. While Europe awaits the arrival of instant payments in November 2018, it will be interesting to observe the changes in Australia that occur due to this new payment landscape.

SWIFT’s RMB Tracker Reports Potential for RMB Growth In 2018

China has been attempting to challenge the global hegemony of the dollar with its currency, the renminbi (RMB) for years. The SWIFT RMB Tracker presents a monthly ranking and weighting of the RMB against other currencies in order to track the rate of its internalization.

The RMB Tracker shows that the currency accounted for 1.61% of domestic and cross-border payments in 2017. The report states that whilst RMB growth stalled in 2017, there are numerous potential factors which could see the growth of the currency in 2018.

Historically cross-border payments have been laden with problems such as delays, errors and unclear payments status. SWIFT’s answer to this quandary has been the launch of its global payments initiative (GPI) which is making transactions faster, transparent and traceable.

The Bank of China was one of the first institutions to go live with GPI, and 22 Chinese banks have now adopted the service. The eventual ubiquity of the initiative will enhance the reputation of China as a country that is open and safe for foreign investment.

SWIFT’s RMB tracker points to other factors which contribute to RMB’s potential in 2018. This includes the rise of China’s cashless economy, the globalization of its banking industry and the adoption of the currency by European banks. Further analysis and insight from the report can be found here.

The Belt and Road initiative aims to strengthen trade links between China, Asia, Africa and Europe. In May, President Xi Jinping pledged a further USD124bn of investment; today, over 100 countries and international organizations have joined the initiative.

By connecting China’s provinces to neighboring countries, along with major investment projects in foreign countries like Pakistan and Indonesia, the currency’s status and value are poised grow throughout 2018.

Whilst the uncertainty of regulations could strangle the growth of RMB in 2018, initiatives such as the SWIFT GPI and China’s Belt and Road initiative are set to reshape the way the Chinese banking industry and the RMB are seen around the world in the long term.

With so many factors at play, all eyes are focused on the RMB this year as it takes another step towards its goal of challenging the dollar’s global hegemony.

SWIFT and CSD community advance blockchain for post-trade

SWIFT and seven central securities depositories (CSDs) have signed a Memorandum of Understanding (MOU) to work together to demonstrate how distributed ledger technology could be implemented in post-trade scenarios, such as corporate actions processing, including voting and proxy-voting.  The group will investigate the types of new products that can be built using it, and how existing standards such as ISO 20022 can support it.

Abu Dhabi Securities Exchange, Caja de Valores, Depósito Central de Valores, Nasdaq Market Technology AB, National Settlement Depository, SIX Securities Services and Strate Ltd are among the CSDs participating in the DLT project with SWIFT. Additional CSDs are expected to join in the coming weeks.

“To ensure interoperability and smooth migration, it is crucial that new technologies support existing common standards such as ISO 20022,” says Stephen Lindsay, Head of Standards at SWIFT. ““ISO 20022 is a messaging standard but also defines terminology across asset classes and corporate actions. An agreement on using the same set of definitions and concepts is important, as they will be independent of the technology or data format.”

Thousands descend to Toronto as Sibos 2017 gets underway

Thousands of delegates flew in from around the world to Sibos to network, debate and discuss topical issues relating to business, technology and finance. The four-day annual event is organised by SWIFT, the global member-owned cooperative and the world’s leading provider of secure financial messaging services.

Sibos has a track record in attracting the highest calibre of speakers, and this year is no different. David McKay, President and Chief Executive Officer at RBC, was the chief guest speaker for the opening SWIFT plenary. He addressed a full audience alongside SWIFT’s Chairman of the Board, Yawar Shah, and SWIFT’s CEO, Gottfried Leibbrandt. Between them, they touched on the key events during the past 12 months, the industry challenges ahead, and SWIFT’s role in addressing them.

Fintech, transaction banking, blockchain, SWIFT gpi and financial crime compliance all featured on the agenda for day one, and announcements from SWIFT relating to the latter two sparked the interest of a few observers.

Anyone working in the B2B payments space, be it a bank, a corporation or a technology vendor, will be aware of SWIFTgpi. It was announced today that SWIFTgpi surpassed two million payments last month – rapidly becoming the new standard in cross-border payments.

More than 120 leading transaction banks, representing over 75% of all SWIFT payments, are signed up to the service. By doing so, they are utilising the innovative payments Tracker, a cloud-based application accessible via APIs. Banks embed the gpi Tracker information into their payments flow applications and front-end platforms, allowing their customers to track gpi payments in real-time.

This addresses a serious bugbear. Traditionally, when a corporate treasurer sends a request for a cross-border transaction to a bank, they have no visibility of what actually happens with that request. Treasurers often liken this to a “black hole”; they have no view as to when payment finality occurs or its final costs. This can lead to problems with suppliers or end-customers, not to mention increasing financial risks resulting from payment delays or non-compliance with regulatory requirements.

For all of the blockchain aficionados out there, SWIFT also confirmed it will provide a sneak peek of the results from the DLT proof of concept (PoC) relating to SWIFTgpi during Sibos, ahead of its conclusion in November.

Harmonsing international compliance standards

A major announcement relating to SWIFT’s Compliance division also became a topic of interest. SWIFT’s Know Your Customer (KYC) Registry, utilised by thousands of banks around the world is being aligned with the new Wolfsberg Due Diligence Questionnaire (DDQ) for Correspondent Banks.

This is the latest in a long line of close collaboration between SWIFT and Wolfsberg to address a broad range of compliance challenges facing the correspondent banking community and beyond. The Wolfsberg Group is a member of SWIFT’s Financial Crime Compliance Advisory Group and is made of thirteen global banks. It aims to develop frameworks and guidance for the management of financial crime risks, particularly with respect to KYC, AML and Counter Terrorist Financing (CTF) policies.

The Wolfsberg DDQ has been updated in response to an increase in regulatory expectations. Aligning the Registry with the Wolfsberg DDQ ensures coverage of up to 90 percent of the information correspondent banks typically require for KYC compliance, delivering major time and cost savings. By answering every Wolfsberg DDQ question directly on the KYC Registry, members benefit from increasing transparency and streamlined due diligence processes.

So, all in all, it looks like a busy but successful day at Sibos so far. Stay tuned on all things related to Sibos by following @Sibos, @chatsworthcomms or search #Sibos2017.

SWIFT and Chatsworth leading the debate at SIBOS, 2017

The Chatsworth team is proud to be supporting SWIFT at SIBOS, the world’s premier financial services conference, exhibition and networking event. What started out as a banking operations seminar in 1978, has grown into the premier business forum for the global financial community to debate and collaborate in the areas of payments, securities, cash management and trade.

Organised by SWIFT for the financial industry, Sibos has brought financial leaders together, over four decades, to network, collaborate and make sense of changes in the industry, helping to build an understanding of the forces affecting the financial community. 

 SWIFT is all about connectivity. The organisation remains the world’s leading provider of secure financial messaging services, providing a platform for messaging, standards for communicating and products and services to facilitate access and integration; identification, analysis and regulatory compliance.

 The organisation connects more than 11,000 banking and securities organisations, market infrastructures and corporate customers in more than 200 countries and territories. Headquartered in Belgium, SWIFT’s international governance and oversight reinforces the neutral, global character of its cooperative structure.

 The Chatsworth team will be in attendance throughout the event in Toronto, where the team will be working to support SWIFT in highlighting the challenges facing the financial eco-system and how their connectivity and experience can help. Chatsworth’s CEO will also be moderating some of the panel debates.

Get in touch

Email: swift@chatsworthcommunications.com   

Twitter: @chatsworthcomms

We look forward to seeing you there. 

Compliance stream at Sibos will explore implications of rapidly changing geopolitical and financial crime environment

Experts and regulators to address the new normal in sanctions, counter-terrorist financing, anti-money laundering, fraud, and cyber security

Sibos introduces a stellar line-up throughout the Compliance stream at this four-day event in Toronto. Multiple sessions will address the profound impact of the shifting geopolitical, financial crime, and cybersecurity environment. Panel debates and deep-dive sessions will cover topics such as the future of financial intelligence sharing; counter terrorist financing in the ‘lone wolf’ era; the potential of artificial intelligence to improve sanctions and AML compliance; and the fraud and cyber-crime ‘new normal’.

An ‘in conversation’ panel with Wolfsberg Group members will unveil the coming year’s priorities and trends. A Latin America-focused panel will provide an overview of the region’s banking compliance challenges.

Notable speakers participating in this year’s Compliance Forum include:

  • Jennifer Calvery, Global Head of Financial Crime Threat Mitigation, HSBC
  • James Freis, Chief Compliance Officer, Clearstream Banking
  • William Fox, Managing Director Global Head of Financial Crime Compliance, Bank of America Merrill Lynch
  • Neil Isford, General Manager, Watson Financial Services Solutions, IBM
  • David Lewis, Executive Secretary, FATF
  • Jerry Perrullo, Chief Information Officer, ICE
  • Denise Reilly, Wolfsberg member, Global Head of Anti-Money Laundering, Citi

Must-attend sessions include:

Counter-terrorist financing- are we really stopping the bad guys – 17 October at 9:30

Panelists will explore how can banks – and governments – adapt to stay one step ahead of the bad guys, what is working and what needs to work better, and whether stringent regulations are pushing legitimate actors outside of the financial system without actually preventing acts of violence.

Fraud and cyber high alert: The new normal? – 18 October at 9:30

As high-profile security breaches continue to reverberate, this panel discussion of experts from a range of industries will discuss the benefits gained from collaboration, the landscape of payment risks, and the skills that must be developed and recruited to protect institutions and the industry.
“In conversation” with Wolfsberg – Pressing priorities and trends 18 October at 15:30

A lively discussion with Wolfsberg representatives will discuss the industry’s latest challenges, trends, and the coming year’s priorities.

Read more about the Compliance stream on Sibos.com.

The Sibos streams enable attendees to build their Sibos agenda around the topics of interest to them.

Other Sibos Streams and Tracks include:

Banking

Technology

Securities

Standards Forum

Artificial Intelligence

About Sibos

Sibos is an annual conference, exhibition and networking event organised by SWIFT for the global financial industry. Next month, some 7,000 decision makers and topic experts from financial institutions, market infrastructures, multinational corporations, and technology partners gather in one place to do business and collectively shape the future of payments, securities, cash management and trade.

When: Monday 16 October – Thursday 19 October 2017

Where: Metro Toronto Convention Centre (MTCC)

Website: www.sibos.com

Contact: JoAnn Healy | Press@Sibos.com | +1 212 455 1802

Get your complimentary Sibos Press Pass today

Accredited journalists are welcome to attend Sibos free of charge. To obtain your complimentary press pass for Sibos 2017 Toronto, contact: Registration@Sibos.com.

Don’t miss your chance to be right in the middle of the news at the premier financial services event of the year.

Follow us on Twitter: @Sibos #Sibos

Follow us on LinkedIn: www.linkedin.com/company/Sibos

Closing speaker at Sibos 2017 confirmed: Microsoft CEO Satya Nadella set to take centre stage

Those that haven’t registered for the event now have an added incentive to do so

Sibos has an excellent track record of attracting the great and the good from the technology and business world. More than 8,000 decision makers and topic experts from around the world are expected to descend on Toronto next month from 16-19 October.

Over the years, Sibos has become known for attracting the highest calibre of speakers to lead and facilitate discussions on the future of business, technology, payments, securities and regulation –and the four-day event is now a staple on the calendar of many executives.

Those that haven’t registered for the event now have an added incentive to do so. Earlier today, it was announced that one of the most high profile executives from the technology world, Microsoft CEO Satya Nadella, will deliver the closing plenary address on Thursday 19 October.

Satya Nadella was named Microsoft’s CEO in February 2014, but has been with the company since 1992. During his 25-year tenure, he has established himself as a technology visionary who quickly became known as a leader across a breadth of technologies and business lines.

Under his direction, Microsoft has switched its centre of gravity from its Windows operating system to Azure – its global cloud computing business – which has grown to become the centre-piece of more than 100 data centres around the world.

Today, its technology underpins a range of web-based applications, bringing mobile devices to life and crunching data for artificial-intelligence (AI) services, according to The Economist, which published an excellent profile article on Nadella and Microsoft earlier this year.

His speech at Sibos will focus on how technology is profoundly impacting every aspect of our society and economies.

“For over two decades, Satya has been at the forefront of the tech revolution, and worked at the heart of one of the defining companies of this century. He knows what it takes to build an innovative and game changing company, and that harnessing disruptive technologies is crucial to enabling businesses to remain relevant and competitive in an ever-changing world.” said Sven Bossu, Head of Sibos.

“The financial services industry is currently undergoing its own tech revolution, which has created huge challenges but also opportunities. During the closing plenary, we look forward to Satya sharing his experiences with delegates to inspire them to build a stronger future for financial services.”

Microsoft’s share price has also risen by an impressive 60% under his leadership. With 8,000 people expected to walk through the doors of the Metro Toronto Convention Centre (MTCC), there will be plenty of ears listening intently to his words of wisdom.

Sibos 2017 is shaping up to be an unmissable event. To explore this year’s programme, and to register, visit Sibos.com.

The Clearing House and SWIFT move closer to instant payments in the US

US banks will have option to connect to The Clearing House’s real-time payments system via SWIFT gateway

A major evolution is underway in the US payment infrastructure. Many participants in the world’s largest financial market are keenly awaiting the development of a new clearing and settlement system from The Clearing House (TCH) to support domestic instant payments in the US.

Once complete, the service will allow consumers and businesses to send and receive payments in real-time, and directly from their accounts at financial institutions. It will also include data and non-payment messages that financial institutions can use to build digital commerce solutions.

As instant payments become more ubiquitous in the US, the world’s largest payment messaging system, SWIFT, announced it will provide US institutions with a gateway to The Clearing House’s real-time payments (RTP) platform.

SWIFT’s solution for the U.S. market will provide banks with the opportunity to leverage a single platform, Alliance Messaging Hub (AMH). This will provide an interface for managing the requirements of sending and receiving domestic instant payment transactions for both SWIFT high-value payments and low-value TCH real-time payments on behalf of customers.

AMH is an orchestration layer that includes a gateway to the TCH RTP network, as well as other gateways and API’s which allow financial institutions to connect to other non-SWIFT networks. Financial institutions can leverage AMH to support instant payments, simplifying adoption to our customers.

As reported by International Business Times, on the significance of the gateway, Ignacio Blanco, SWIFT’s director of strategic relationships said:

“SWIFT is working together with communities worldwide to support the global shift towards real-time payments, and we are pleased to be at the forefront as the U.S. market evolves. The Clearing House is making great strides in accelerating the speed of transactions, and we are committed to playing our part in helping the financial community to operate as efficiently as possible.”

Steve Ledford, SVP Product and Strategy at The Clearing House, also explained why TCH selected SWIFT as a partner:

“Given its reach and expertise in payments, SWIFT is a great collaborator as we bring a wide-scale real-time payments system to the U.S. market. Achieving our vision of broad adoption of real-time payments will only be possible when the majority of U.S. institutions are able to participate, and SWIFT will be instrumental in helping us meet this goal.”

The solution will be commercially available by early 2018. But as IBT notes, SWIFT’s global instant payments strategy is burgeoning, and the US announcement builds on SWIFT’s earlier success in Australia and in Europe.

In 2015, SWIFT was awarded the contract to deliver the messaging infrastructure to underpin Australia’s new payments platform, NPPA, which is expected to go live later in 2017.

Earlier this year, SWIFT announced the launch of an instant payments messaging solution, first for the European market, and elsewhere. It will allow instant payments to be made over the SWIFT network and provide customers with a single gateway to connect seamlessly to multiple instant payments systems.

It will offer connectivity to the Eurosystem’s TARGET Instant Payment Settlement (TIPS) and will support the delivery of the future Eurosystem single gateway to TIPS, TARGET2 (T2) and TARGET2 for Securities (T2S) platforms.

With new technologies and start-up companies emerging in recent years and seeking to transform the wholesale and retail payment infrastructure, it seems one of the original pioneers is taking promising steps once again to re-design the global payment infrastructure once again.

SWIFT’s blockchain PoC could transform international payments

SWIFT has just added 22 new members to its Global Payments Innovation (GPI) project.

Banks have, for some time, been looking at a way to monitor their intraday payments, global positions, and liquidity exposures more effectively. This is in line with rules set out by the Basel Committee on Banking Supervision (BCBS), which require banks to take into account metrics such as currencies and intraday exposures at correspondent banks.

Currently, a lack of intraday reporting coverage means banks have no way of monitoring the position of their Nostro accounts in real-time throughout the day.

If this vitally important sector is to be revitalised, finding a solution to monitoring payments in real-time, which can give banks more control and more confidence in managing their correspondent and corporate banking relationships, is vital.

There has been significant progress made on this front from one of the utilities at the center of the international financial system. SWIFT, the global provider of secure financial messaging and compliance services, has just added 22 new members to its Global Payments Innovation (GPI) project.

This could help transform the nature of international payments as we know it.

SWIFT launched a proof of concept (PoC) for its blockchain initiative earlier this year with six partner banks, as part of the SWIFT GPI, to provide the first system enabling real time monitoring of Nostro accounts.

There is growing momentum behind the project. Last week, a further 22 banks, including Lloyds in the UK, JPMorgan Chase in the US, Standard Bank in South Africa and Westpac Banking Corporation in Australia, all joined the PoC.

There is a lot of enthusiasm and anticipation about the outcome of the PoC. If banks could manage their Nostro account liquidity in real-time, it would allow them to accurately gauge how much money is required in each account at any given point. This would enable them to free up significant funds for other investments and reduce the cost of correspondent banking.

This PoC is a key example of the way in which industry leaders across the financial markets have been bringing the industry together to collaborate on projects using new technologies to tackle industry wide problems.

Although there are other companies launching similar initiatives, SWIFT benefits from its long-standing position of trust and neutrality at the heart of the financial sector. As a result, it is able to bring together banks, technology providers (such as Hyperledger which developed the blockchain technology for this PoC) and other industry stakeholders to find innovative and meaningful ways of introducing potentially transformative technologies.

“The proof of concept is about the accounts banks hold between themselves,” says Wim Raymaekers, Global Head of Banking Market at SWIFT. “Banks are exchanging information today; what we want to see with blockchain is those status information reports being exchanged, as banks don’t always know the levels of their Nostro accounts on a per transaction basis. Most often, banks get that information at the end of the day but they also want to know how much money is in their accounts in real-time.”

The results of this initial PoC are due to be announced at Sibos later in Toronto in October. We look forward to seeing them with great interest.

 

Reporting from the SWIFT Business Forum 2016

Over 1,300 fintech professionals arrived at Tobacco Dock in East London yesterday morning for SWIFT’s annual Business Forum London conference, which has become the must-attend yearly event for this rapidly growing industry.

After a quick coffee in the sunlight-filled atrium of the impressive nineteenth Century tobacco warehouse, the day’s proceedings kicked off with a panel debate based around the event’s theme for 2016: building the future. SWIFT’s CEO, Gottfried Leibbrandt took to the stage along with Digital Asset Holdings’ Blythe Masters, RBS’s Director of Payments Marion King and Andrew Hauser, Executive Director of Banking, Payments and Financial Resilience at the Bank of England.

The themes that emerged in this session set the tone for the day, with one of the reoccurring debates focusing around how banks and other incumbent service providers could co-exist with fintech startups seeking to ‘disrupt’ and innovate in areas such as payments. SWIFT’s inspired agenda ensured that almost every panel debate featured representatives from both sides of the fence, and it was fascinating to see the level of collaboration between some of the giants of the banking world and young, agile startups, with both sides bringing their inherent unique strengths to the table.

Of course the most popular theme of the day was blockchain, with seemingly every panel discussing how distributed ledger technology could be used to revolutionise their particular areas of the industry, and the R3 initiative being singled out as leading the charge in light of its launch of the Corda platform, which Barclays had tested in front of a live audience just a few days earlier.

There was a distinct air of excitement and positivity in all the conversations we had and overheard at the event yesterday, and we left with a sense that, even though we are only four months in, 2016 could usher in some of the most significant developments the fintech space has seen for a very long time.