December 2017

In a payments market characterised by increasing digitalisation and disruption, competition among market participants is only growing. To maintain pace in this ever-evolving marketplace, correspondent banks are taking advantage of SWIFT’s global payments innovation (gpi) – the industry-wide initiative that connects parties in a payment chain via a cloud-based solution. In The Banker’s latest Viewpoint series, Christian Westerhaus, Global Head of Clearing Products, Cash Management, Deutsche Bank, joins other industry leaders from SWIFT, the International Air Transport Association (IATA) and Silicon Valley Bank to examine SWIFT gpi’s significance to the correspondent banking space

In the first interview of the series, Christian Westerhaus looks back on SWIFT gpi’s story so far. From a concept born at Sibos just two years ago, SWIFT gpi has already become reality. 120+ banks have committed to going live with SWIFT gpi over the next 24 months – of which, 30+ banks are already live (including Deutsche Bank).

Westerhaus explains that the new standard for payment delivery has led to significant operational efficiencies for corporates. Among them are the same-day availability of funds, enhanced tracking capabilities and greater transparency around payment fees. Offering the corporate perspective in chapter two, Javier Orejas, Senior Banker, EMEA and Americas, IATA, believes the transparency that SWIFT gpi provides is a significant boon for its operations, particularly for payments originating in less developed regions.

There are ample opportunities for banks, too. The increased standardisation of payments (and their traceability) under SWIFT gpi is bolstering competition among payment service providers (PSPs) – a prospect that correspondent banks are relishing. In chapter three, Silicon Valley Bank's Senior Director, Product and Correspondent Bank Management, Dena Stefanopoulos, comments on the role that SWIFT gpi plays in ensuring the traditional players remain relevant in today’s market.

For all its improvements to the way payments are transacted, SWIFT gpi is far from a finished article; in fact, further developments should appear. In chapter four, Wim Raymaekers, SWIFT’s Global Head of Banking Market and Head of SWIFT gpi Programme, says that the initiative is, in effect, a platform for innovation, able to deliver value to corporate clients as their expectations mature. And as new technologies and capabilities are developed, these can be incorporated to the existing infrastructure.

Rounding up the series, Westerhaus predicts that SWIFT gpi will only transform correspondent banking further. The onus is on the banking community to support corporates by incorporating SWIFT gpi into their existing treasury solutions – and finding ways to deploy ISO 20022, the harmonising standard for data interchange during cross-border payments.

Certainly, banks will be crucial to ensuring that SWIFT gpi achieves the network it requires to truly become the “new normal” for payments. Westerhaus says: “Over the coming years, 100% of commercial payments via the SWIFT network should become gpi. There need to be ambitious targets, such as these, in order to maintain correspondent banking’s role as a viable solution.”

To read the article click here

To watch the video chapters click below

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