global payments innovation initiatives

1

Global Payments Innovation

Initiative (GPII)

Anik Mehta

Director, Markets and Initatives, India and Sub-continent, SWIFT

//be-file02/Group/Photo-Library-Public/Royalty free images

The global payments innovation initiative – 02 Jun 2016 2

3

Correspondent banking model is under pressure

Customers and

regulators push for

better payments service

Banks rationalize their

correspondent banking

networks

Digital innovators offer

new disruptive

solutions

End customers increasingly demanding

Domestic payments going real-time

Regulatory intensity and increasing costs

Network rationalization

Enhanced value proposition

Disintermediation

The global payments innovation initiative – 02 Jun 2016

Correspondent banking disintermediated at origination

Local bank Local bank

PSP PSP

ACH ACH

GTB GTB

End customer

(retail, SME, corp)

End customer

(retail, SME, corp)

Correspondent Banking

Co

rre

sp

on

de

nt

Ba

nkin

g d

isin

term

ed

iati

on

Transfer

Agent

Transfer

Agent

Front

Office

Back

Office

Correspondent banking

at risk of being cut out


gpii is first concrete step to improve banks’ cross-border payments service

1. Fast(er), same day value

2. Higher efficiency, less intermediaries

3. Secure and compliant

4. Transparent and predictable, with payments tracking

5. Convenient and ubiquitous

1. Slow, can take multiple days

2. Expensive, multiple deducts

3. Secure and compliant

4. No transparency and predictability on cost and time

5. Convenient and ubiquitous

6. Open and inclusive (global reach) 6. Open and inclusive (global reach)

Traditional correspondent banking Global payments innovation initiative

The objective is to first fix these key pain points

Note regarding prices: it will be at the discretion of each gpii member to decide the

pricing strategy vis-à-vis its customers, including other financial institutions

“Before” “After”

5 The global payments innovation initiative – 02 Jun 2016

The global payments innovation initiative (gpii)

Delivering a new standard in cross-border payments

Proactively respond to evolving customer needs for more speed, transparency and predictability of

time and cost in cross-border payments

New multilateral rulebook, initially focused on business-to-business payments

Building on the foundation that banks provide in security, resiliency and compliance

Delivering real-world innovation: building on existing platform, embrace new technologies along a

strategic roadmap

Global reach, collaborative industry-wide initiative, organised by SWIFT

Open model, participation based on operational quality

Fast

Transparent

Predictable

Secure

Resilient

Compliant

Real-world innovation

Global reach

Open model


Global payments innovation

initiative (gpii)

Global reach

provided by banks connected

to domestic payments systems

SLA rulebook

with customer at centre

of value proposition

Smart collaboration

(e.g. enhanced compliance practices,

optimised intraday liquidity flows)

Embrace innovation

(e.g. peer-to-peer messaging,

real time settlement mechanism)

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The global payments innovation initiative (gpii)

Bank access channels

Domestic payment systems

SWIFT


Domestic payment systems

SWIFT

Existing SWIFT messaging


SWIFT for corporates


SWIFT for corporates

Accessible by

any bank

Differentiate vs

non-gpii banks

Still reach

non-gpii banks

Reach any bank

Operational quality Open model


8

A gpii payments tracker “in the cloud”

Central payments database,

hosted at SWIFT

“One-glance”

status overview

Track path, in

real time

Details of banks

along the chain

Unique, end-end

tracking number

Transparency of total

fees and time

Bankhaus

Anton

Deutsche Bank Taipei commercial

bank

101 >

Originator

103 > 103 > 910>

Beneficiary Wells Fargo

103 >


MT199/API MT199/API MT199/API MT199/API

Updated via MT199 or API

Data consumption via GUI,

via MT199 (push) or via API

(pull)

Value proposition for corporates

Payments with same day use of funds

Transparency and predictability of fees

End-to-end tracking of payments

Transfer of rich payment information

9

Grow international business

Enhance supplier relationships

Increase treasury efficiencies

Benefits for a corporate The core principles of gpii


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Value proposition for banks

Grow volumes

• Offer distinctive payments service

• Retain and attract new customers

• Protect and grow transaction

volumes

• Comply with regulation

(Dodd-Frank, PSD2, …)

• Sell payments services to third

parties

Reduce cost

• Lower network management cost,

avoid proprietary connections in

non-strategic countries, access

global quality network

• Enhanced compliance practices

• Optimised intraday liquidity flows

• Increased straight through

processing

Lead innovation

• Reputational benefit

• Leader in global payments

innovation



Initiative banks

51. Sberbank

52. Scotiabank

53. SEB

54. Société Générale

55. Standard Bank

56. Standard Chartered Bank*

57. Sumitomo Mitsui Banking Corporation*

58. Swedbank

59. Tadhamon International Islamic Bank

60. TD Bank

61. UBS

62. U.S. Bank

63. UniCredit*

64. United Overseas Bank

65. Wells Fargo*

1. ABN AMRO

2. Alfa bank

3. Australia and New Zealand Banking Group*

4. Banco Bilbao Vizcaya Argentaria

5. Bangkok Bank

6. Bank of America Merrill Lynch*

7. Bank of China*

8. Bank of New York Mellon*

9. Bank of the Philippine Islands (BPI)

10. Bank of Tokyo-Mitsubishi UFJ*

11. Banco Itaù

12. Banco Santander

13. Banco de Crédito del Peru

14. Banco do Brasil

15. Barclays*

16. BNP Paribas*

17. Caixa Bank

34. JPMorgan Chase*

35. Kasikornbank

36. KBC Bank

37. KEB Hana Bank

38. Lloyds Banking Group

39. Mashreq Bank

40. Maybank

41. Mizuho Bank*

42. National Australia Bank

43. Natixis

44. Nordea*

45. Oversea-Chinese Banking Corporation

46. Rabobank

47. Raiffeisen Bank International

48. Royal Bank of Canada*

49. Resona Bank

50. Royal Bank of Scotland

18. Citibank*

19. Commerzbank

20. Credit Suisse

21. CTBC Bank

22. Danske Bank*

23. DBS*

24. Deutsche Bank

25. Ecobank

26. Fifth Third Bank

27. FirstRand Bank

28. HSBC

29. ICICI Bank

30. Industrial and Commercial

Bank of China*

31. ING*

32. Intesa Sanpaolo*

33. Investec

(*) Pilot bank

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Initiative Group

Entry

criteria

Exit

criteria

Broad

participation,

drive promotion

Controlled

participation,

keep practical

Promote gpii

Provide feedback into collaborative design

Leader in global payments innovation

Pilot/User Group

Entry

criteria

Exit

criteria

Pilot gpii

Participate in iterative design and testing

Be early adopter

Broad input

whilst focused

decision-making

Vision Group Craft long term vision correspondent banking

Develop strategic roadmap Entry

criteria

Exit

criteria

Organisational set-up


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Timeline

▪ Identify drivers

▪ Define principles

▪ Announce initiative

Pilot

Promote

Define strategic roadmap

2015 2016

▪ Show early results

at Sibos

▪ Prepare for

go live


www.swift.com


Interested?

Contact us

[email protected]

www.swift.com/gpi

mailto:[email protected]

mailto:[email protected]

http://www.swift.com/gpi

global payments innovation initiatives

Presentations & Public Speaking