SWIFT today announces it will begin piloting an integrated pre-validation gpi payments service, focussing on enabling the speedy identification and elimination of errors and omissions in payment messages.
The pilot is the first stage in the roll-out of the ambitious gpi validation programme, which will also be rolled out in the Middle East and North Africa. The goal of the pilot is to build the foundation of a new integrated and interactive service that will significantly improve efficiencies in the payments process and which will ultimately be made available to all 10,000 banks across the SWIFT network, including banks in MENA.
Fully integrated with gpi payments, the service will facilitate real time dynamic bank-to-bank interaction using APIs to improve the predictability and efficiency of international payments, and look at using predictive analytics. It will later be complemented with a post-payment investigation and reconciliation service that will allow for fast resolution of the remaining factors, typically arising from compliance or regulatory requirements, which can slow down the payments process.
Following widespread interest and demand from a large number of banks, SWIFT has established the first targeted pilot with a subset of fifteen major banks from around the world.*
The launch of the pilot comes as SWIFT gpi has rapidly grown to capture more than half of all SWIFT’s cross-border payment volumes. While more than 50% of SWIFT gpi payments are credited to the beneficiary in less than 30 minutes, many arrive in just seconds. Errors in payment data, such as incorrect or missing beneficiary or incomplete regulatory information, which is necessary for compliance purposes, often hold up those payments that take longer. Correcting these preventable errors and omissions before the initial instructions are sent will result in a far more efficient payments experience.
Based on a real-time API-based mechanism, the pilot will enable sending banks to send and receive API calls over SWIFT to seamlessly check beneficiary account information with the ultimate receiving banks. This will allow banks to speedily remedy any inaccurate or missing information, reducing delays and costs.
Luc Meurant, Chief Marketing Officer, SWIFT, said:“SWIFT gpi has already created a fast and frictionless cross-border payment experience for many banks and corporates – but we know that there are still payments which can be sped up further by ensuring the correct information is provided at the start. By embedding this new capability in the same payment messaging channel, thousands of banks will benefit from the resulting efficiencies, thus boosting the financial services industry as a whole as we move toward universal implementation of gpi in 2020.”
Onur Ozan, Head of Middle East, North Africa and Turkey at SWIFT, commented:
"More and more banks in the Middle East tell us that they would like to see more integrated features and services. With the gpi pre-validation service, SWIFT now offers another capability for enabling smooth cross-border payments and successful transactions. Banks in the region want a streamlined process and features that increase error detection, speed, transparency and end-to end tracking of payments. Ultimately, the gpi pre-validation pilot supports these objectives.”
Manish Kohli, Global Head of Payments and Receivables, Citi Treasury and Trade Solutions, said: “The gpi pre-validation pilot is a significant step forward for the payments industry in building a platform on which banks can interact with each other in real-time, both pre-transaction and post-transaction. It demonstrates how banks can leverage SWIFT gpi to continue to transform cross border payments. This service is an enabler of our goal to provide real-time ubiquitous cross border payments by allowing banks and our clients to rectify any issues at the point of origination, achieving seamless end-to-end fulfilment along the payments delivery chain.”
Christof Hofmann MD and Global Head of Payments and Collection Products, Deutsche Bank, Germany, said:“We believe the gpi pre-validation service will add significant value to our clients, increasing the overall gpi client experience. Beneficiary account validation addresses an important pain-point in cross-border payments; it will help increase STP ratios while reducing fraud and exception handling.”
Together with the pilot banks, SWIFT will agree the global industry specifications for the gpi pre-validation service by the end of 2018, while the pilot is set to commence in early 2019. Over time, the service will be expanded to provide up front transparency on fees, based on the exact routing of the payment message. This will give payment originators and beneficiaries complete transparency and predictability on costs, routes and expected delivery of their funds.
*The 15 banks taking part in the pilot are: Bank of AmericaMerrill Lynch, Bank of China, Barclays, BBVA, BNP Paribas, Citi, Deutsche Bank, E.SUN Commercial Bank, ICBC, Intesa Sanpaolo, J.P. Morgan, National Australia Bank, Piraeus Bank,Société Générale and Wells Fargo.