The benefits of SWIFT gpi

Since its introduction in 2018, SWIFT gpi has provided transparency for global payments, particularly for corporates which cannot compromise on speed or certainty across their international business activity.

Time absorbed in typical cross-border payments processes weighed heavily on the cost of each transaction and therefore a firm’s bottom line. Further, the array of actors involved in shepherding an individual cross-border payment to its naldestination was not only a time drain, but a compliance nightmare.

These factors bore a signi cant impact on banks’ liquidity positioning and were a keytarget of SWIFT gpi’s payment transformation. By increasing transparency, control and speed, institutions now have greater ability to concentrate liquidity where it is most needed.

From the date of its mandatory integration at the end of this year, SWIFT will publish a list of all banks, highlighting those that are not respecting the two-day settlement format. This tactic leverages banks’ desire to maintain a reputation of guarantee in payment times, which by extension reduces firms’ risk and reinforces their ability to efficiently allocate liquidity.

Achieving this next step in the evolution of SWIFT gpi, however, is another matter. Firms are faced with ensuring that their systems not only meet the pending confirmation of payment deadline, but also that their infrastructure is built within operability and longevity in mind.

The challenge now lies with firms’ approach to adoption. As they pursue gpi deployment projects structured around building, buying, outsourcing, collaborating or a combination of these approaches, the strengths and weaknesses of each strategy are becoming increasingly apparent.