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SWIFT announces a strategy for instant, frictionless payments and securities processing

SWIFT has announced that over the next two years and beyond it plans to fundamentally transform payments and securities processing, retooling cross-border infrastructure as part of a new strategy approved by its Board to enable the world’s financial institutions to deliver instant and frictionless end-to-end transactions. 

The cooperative says it will expand beyond financial messaging to provide comprehensive transaction management services. This approach is designed to support and accelerate innovation, paving the way for financial institutions - independently or in collaboration with fintechs - to create new value-added services to support their business growth. In payments, financial institutions will be able to expand offerings to businesses and consumers and enhance the end-customer experience. In securities, financial institutions will benefit from improved reconciliation, reporting and asset servicing processes as well as end-to-end visibility of transactions to reduce settlement fails and fines. 

SWIFT’s enhanced platform will orchestrate interactions between financial institutions and other participants to minimise friction, optimise speed and provide end-to-end transparency and predictability from one account to another anywhere in the world. This move has the potential to power instant and frictionless transactions between 4 billion accounts serviced by financial institutions across the SWIFT network. The next-generation digital platform will use APIs and cloud technology to provide a set of common processing services that banks have historically invested in individually, saving the industry time and money. New and extensive data capabilities will enable the pre-validation of essential data, fraud detection, data analytics, transaction tracking and exception case management. 

“We are innovating the underlying infrastructure that financial institutions use to make transactions run even faster end-to-end, and at the same time further reducing costs for the community through industry-shared services in the areas of cyber, fraud and compliance," commented Javier Pérez-Tasso, CEO of SWIFT. "We will introduce data innovation that embeds risk and control elements expected from SWIFT, creating peace of mind for business-critical operations. Combining these elements, we are creating a broad platform with faster technology and smarter and better services that the industry can trust as a foundation for innovation towards their own end-clients.” 

Continued transformation

The planned platform capabilities build on SWIFT’s recent successful transformation initiatives, including SWIFT gpi, the benchmark in cross-border payments messaging, and leverage the cooperative’s unrivalled reach across more than 11,000 institutions in 200 countries and territories. They will be underpinned by SWIFT’s continued investment in cybersecurity and risk management to ensure resilient and secure transactions. The cooperative says that users will benefit from the capabilities with minimal disruption through backward compatibility. 

“Over the next two years, SWIFT will fundamentally transform the way in which payments and securities transactions are processed, eliminating friction and increasing speed, quality and certainty," said Yawar Shah, Chair of SWIFT. "SWIFT will continue to be, as per its true north, bank and market infrastructure centric and its proven track record of timely execution, risk control and global engagement will be enhanced to accelerate this transformation. The full Board, representing the entire global banking community, has endorsed this strategy, which will serve all customer segments, regardless of size and geography, and allow for flexible adoption thanks to backward compatibility.” 

The bank view

The new strategy already has received widespread support from across the financial services industry.

“Citi is very supportive of this new path that SWIFT is embarking on," said Manish Kohli, global head of Payments and Receivables at Citi. "With its new platform strategy, SWIFT is evolving from just making incremental improvements to its traditional store and forward messaging capabilities and towards truly transformative change based on API dynamic connectivity, a vastly improved data model and extremely relevant ‘payment orchestration’ services. This reimagined SWIFT platform builds on the progress of gpi, and moves us towards our desired end-state of payment ubiquity with the ability to make frictionless and instant cross border payments across the SWIFT network. Citi is fully committed to working with SWIFT, the banking community, financial market infrastructures and governments to drive this critical transformation forward.” 

“SWIFT is a key partner in helping our clients meet their business objectives in a quick and secure manner," added Thomas Halpin, global head of Payments Product Management at HSBC. "We support SWIFT’s new approach that focuses on innovation to deliver new services while maintaining resilience and security. We look forward to working with the SWIFT community to deliver even faster and more efficient payments for clients in the future.” 

“It’s good news that SWIFT is evolving from being a messaging carrier to a provider which supports our own Deutsche Bank transaction platform for international payments," concluded Stefan Hoops, managing director, head of Corporate Bank at Deutsche Bank. "Speedy, secure and compliant transaction management fits perfectly with our clients’ workflows and needs. We plan to connect SWIFT’s cooperative industry-wide solution with our own products and client services that manage payments for all types of financial institutions, corporates and fintechs.”

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