The SWIFT global payment innovation (gpi) initiative is one of the most important projects in the payments industry today. What makes SWIFT gpi so important is that it takes aim at resolving the pain points of cross-border payments by improving the end-to-end client experience and helping corporate clients achieve their goals via trusted and heavily regulated bank providers.
What sets SWIFT gpi apart from other payments industry initiatives is that it brings together a currently existing global network of banks on a common infrastructure and standard in order to provide a practical, implementable solution with robust security in the short term, with a strategic longer term vision to create incremental value, evolve, and innovate. The immediate scale and global reach that can be realized via this initiative is not easily achieved by other industry initiatives that exist today.
The first phase of SWIFT gpi which addresses cross border payment speed, fee deduct transparency, tracking and unaltered remittance data went live in February via collaboration between global banks and an SLA rule book. In May, the SWIFTgpi tracker was launched to provide payment tracking and fee deduction transparency throughout the gpi credit transfer chain to the gpi parties involved in the payment. SWIFT has also delivered the gpi Observer Insights in April to monitor and enforce gpi member bank adherence to the gpi SLA rule book. The April version of the Observer Insights reports on speed of payment availability and timeliness of payment status updates, while enhancements to report on fee deductions and unaltered remittance data are targeted for June. The stand-alone gpi directory that catalogues live gpi participants, the currencies they support, as well as their currency cutoff times is targeted to be available in Q3 of this year.
To complement gpi phase 1, SWIFT has created a vision group to set out the medium to longer term strategic evolution of the cross-border payment space with SWIFT at the center as facilitator. The vision group has prioritized some medium term and longer term objectives such as providing incremental value to B2B payments by providing tools to prevent exceptions as well as better manage certain types of exceptions when they do occur. Enhancing liquidity management and enabling further payments digitalization via rich remittance data are two other medium term enhancements to the gpi infrastructure being planned. Expanding gpi to cover other business needs and service levels is in active discussion by the vision group as the infrastructure continues to evolve and provide value in the medium term. In parallel, longer term strategies are being discussed and explored, such as new technologies like blockchain/DL, APIs, Artificial Intelligence, and new clearing and settlement models. SWIFT recently announced a gpi proof of concept to better understand the opportunities and challenges of using blockchain/DL technology for nostro reconciliation with a number of gpi member banks. Phase 1 of the nostro reconciliation proof of concept starts with 6 banks testing out the concept with an additional 20 banks as a fast following phase 2.
The payments space is evolving quickly and getting a centralized infrastructure in place that enables the banking community to leverage common requirements and facilitates global reach, interoperability, and collaboration while testing new technologies in the scale required to make an impact on the future payments landscape is what makes SWIFT gpi one of the most important, and arguably the most important initiative in the payments industry today.
Wells Fargo is a member of SWIFT’s Global Payment Innovation (gpi) initiative and is in active implementation planning to be live on the gpi infrastructure by Q1 2018.
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