At SIBOS 2015 in Singapore the fever pitch around blockchain hype was reaching its apex. It was also somewhat of a coming out party, if you will, for Ripple, who used the event platform for making public waves around the inefficiencies of the standard cross border payments methods using SWIFT messaging and correspondent banking versus the advantages of their own approach using a distributed ledger protocol. At that time SWIFT gpi (a faster and more transparent cross border network) was in more of a conceptual stage and then further developed throughout 2016. The official launch occurred in early 2017, and their website indicates that 160 banks have adopted SWIFT gpi (of the 11,000 total banks using the standard SWIFT network). This particular news release, appearing in MarketsInsider, discusses further enhancements to gpi.
SWIFT, along with a number of corporates and banks, today announces plans to start testing an enhanced multi-bank standard to further improve the cross-border payments experience for multi-banked corporates. This enhanced standard, designed and built in conjunction with 10 multinational corporates and 12 leading banks, streamlines the process for corporate treasurers by allowing them to initiate and track gpi payments to and from multiple banks in a single format and integrate gpi flows in ERP and Treasury Management Systems.
So in this stage, the SWIFT gpi for Corporates moves beyond the single bank to bank messaging and into a multi-bank capability, where corporates can access payment information in a single location across multiple bank payment requests. Of the course the banks have to have adopted SWIFT gpi, but other than that, a welcome improvement. The announcement indicates that this is a pilot, and involves 10 companies working with 12 banks. To date we are unaware of any blockchain protocol being incorporated into gpi, although it has seemingly been kept on the roadmap for potential incorporation.
“Corporates want a faster payments experience, with real-time tracking and certainty of credit to end beneficiaries. They also value transparency and the predictability of payment information such as transaction fees and foreign exchanges rates that SWIFT gpi offers,” says Stella Lim, Head of Corporate Sales, Asia Pacific at SWIFT. “This new capability will enable that experience for Corporates in a consistent, scaled fashion across multiple banks. It provides real-time information in the corporate treasury space, which the corporate customers are asking for.”
In the meantime, Ripple has apparently gained more than 100 banks users of their RippleNet cross border network, so a long way to go, but competition is a good thing.
Overview by Steve Murphy, Associate Director, Research Services at Mercator Advisory Group
