Swift announces a new strategy for instant, frictionless payments and securities processing

Global, member-owned co-operative, Swift, has announced that over the next two years and beyond it will 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 co-operative will expand beyond financial messaging to provide comprehensive transaction management services. This new approach will 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.

Olivier Lens, head of Sub-Saharan Africa at Swift, says the new strategy is aimed at building on Swift’s existing strengths with the goal of further supporting and enabling the financial services industry to remain competitive in an ever-evolving landscape.

“Our strategy is about delivering an instant and frictionless international payments environment, end-to-end, with full transparency. By maintaining a shared, complete and definitive representation of each business transaction at the centre and orchestrating the flows, the platform will address many of the remaining pain points in cross-border payments and unlock huge opportunities for the community,” he said.

For African financial institutions in particular, the issues of complexity and cost are critical when it comes to adopting new technologies — especially for small and medium enterprises, says Lens.  

He said Swift will continue to facilitate the adoption of ISO 20022 for cross-border payments, while offering interoperability between early adopters of the new standard and those who have yet to adopt it. “This means that ISO 20022 adopters will be able to benefit from their investment in the new standard without waiting for the rest of the community to do the same,” he says.

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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 at least 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.

Javier Pérez-Tasso, Swift CEO, said: “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.

“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.”

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 co-operative’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. Users will benefit from the capabilities with minimal disruption through backward compatibility.

Yawar Shah, chair of Swift, said: “Over the next two years, Swift will fundamentally transform the way payments and securities transactions are processed, eliminating friction and increasing speed, quality and certainty. 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 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.”

“Through this new strategy, Swift will be able to provide greater efficiencies and reduced costs for the market — allowing market players to deliver increased value to their customers. The components of the strategy and the platform are aligned with the needs of our customers,” said Lens.

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

Bernard Carless, head of settlement and Swift at FirstRand group treasury and Swift board member for Africa, says, “FirstRand Bank is very excited about Swift’s bold new strategy. We are eager to explore the opportunities that the transaction management platform will deliver in creating increased efficiencies and in extending our Swift value proposition into different customer segments, all with the comfort and confidence provided by its global reach, security and resilience.”

This article was paid for by Swift.