Swift GPI hailed a success by trial banks
A pilot project to prove the concept of Swift’s Global Payments Innovation (GPI) initiative has been hailed a success and has cleared the way for a go-live of the service in early 2017. Swift has been piloting the GPI with 21 banks, including Nordea, Citi, Bank of China and Intesa Sanpaolo since February – all of whom shared their experiences at Sibos yesterday.
During the pilot, 15 global banks representing more than 30 per cent of cross-border payments successfully tested the design and core functions of the GPI, while in parallel, ten additional global banks started to prepare for the service’s launch.
“If you send a cross-border payment at the moment you’ve no idea where it is,” said Tomas Moberg, global product and process manager at Nordea. “GPI will solve this. You’ll know where a payment is and when a beneficiary has received it.”
In November and December this year the banks will start the third phase of the pilot, dealing with each other directly on GPI. Steve Dumont, pilot programme manager at Swift, said: “The pilot shows it works.” He added that Swift will work with other market infrastructures, such as Target 2 in Europe, to ensure widespread adoption. This is vital as “the transaction identifier needs to follow the chain all the way through, keeping the GPI end to end.” It must not be blocked if the full benefits are to accrue.
The GPI rulebook mandates that cross-border payments must be credited same day, have transparency of fees, tracking capabilities and contain remittance information that remains unchanged for STP reasons. Global logistics companies have been providing similar functionality for packages for years, of course, so a similar service in the payments industry is long overdue.
Two products comprise the GPI: a directory, which will identify payment routes and a Swift GPI tracker. “It’s really about the tracker for me,” said Moberg, alluding to how this functionality will improve corporate and other services, where such data can be used to improve working capital and financial control. “Treasurers have been demanding improved cross-border traceability and speed from banks for some time.”
Integration work is required from banks to align existing MT series financial messaging, “but it’s not rocket science”, said Moberg, insisting that “it’s simple to do. We mapped the scope of the project within a month.”
Mark McNulty, global head of FI payments and clearing, Citi, said the benefits of GPI were obvious: improving the customer experience, efficiency and adding “value services” to it, especially for corporates. “But the next phase is critical. We need to achieve scale next year. Banks need to commit to it to achieve network benefits, so it becomes a quasi-new standard.”
Mauro Pernigo, product manager, international cash management, Intesa Sanpaolo, agreed adding GPI services were “very important to help smaller banks come on-board and encourage them to use GPI as it improves reach for our corporate customers”.
Wu Qizhi, deputy general manager, head office clearing, Bank of China, was worried about third parties infiltrating the cross-border payment business unless the industry took action. “That is why it’s great GPI is being led by Swift, because we’re eager for change, but it’s almost impossible for all these banks to talk to each other without Swift. I urge any banks still ‘waiting and seeing’ to make a decision [to join] quickly.”
By Neil Ainger, Daily News at Sibos reporter