SWIFT Delivers Major Milestones in Strategy for Instant and Frictionless Transactions, and Sets the Stage for Global Adoption In 2022

A year after sharing a bold vision to enable instant and frictionless transactions from one account to another anywhere in the world, SWIFT today underlines major progress in realising this vision in 2021. SWIFT has delivered on many commitments, including transforming the speed and transparency of low-value payments, removing key frictions by validating payments upfront, and delivering tools for banks to rapidly benefit from rich data in a multi-format environment. SWIFT has also been strongly engaged in experiments to integrate CBDCs and new digital assets into cross-border flows, as well as innovative proofs of concept demonstrating the real-time interlinking of MIs.

The innovations SWIFT has brought to market this year are central to its strategic agenda to support the transformation of the global industry. Adoption is underway and is accelerating in 2022 and beyond. The services available to the industry to adopt immediately are:

• Fast, affordable low value cross-border payments. SWIFT Go, launched in July, significantly improves the experience for consumers and small businesses sending low-value cross-border payments. It enables banks to provide their end-customers a fast, predictable and highly secure payments experience with upfront visibility on processing times and costs. It is rapidly gaining traction, with more than 120 leading international financial institutions signed up.
• Frictionless payments with fewer hold-ups. Payment Pre-validation eliminates one of the leading causes for international payments to stop or lose time – incorrect payee information. The service enables banks to verify beneficiary account details before a payment is sent and catch typos or transposed account numbers upfront.
• Improved services to end customers through rich data. In November, SWIFT launched a new in-flow translation service that will ease the migration from the MT standard to ISO 20022 next year. In-flow translation is key to enabling a smooth transition to the rich data standard, while allowing the industry to keep its existing systems running smoothly and enabling financial institutions to adopt the new standard at their own pace through the industry-defined transition phase up to November 2025.

These developments build on strong momentum for SWIFT, which is on track for another year of double-digit traffic growth and in November had a record 50.3 million messages exchanged over its network in a single day. Today, because of SWIFT gpi and the work of the SWIFT community in recent years to overhaul the speed and predictability of cross-border payments, the vast majority of these payment instructions are executed in seconds, with nearly half credited to end beneficiaries within 5 minutes and almost two-thirds within 30 minutes after compliance checks, currency controls and other factors applicable to all international payments. Most of the remaining payments reach payees the same day.

In terms of broader innovation, in 2021 SWIFT has prioritised:

• CBDCs. SWIFT is actively experimenting to see how its evolving platform could interact with the cross-border use of central bank digital currencies (CBDCs) and demonstrating that interoperability between different payments systems will be the key to success.
• Market infrastructure interlinking. Driving instant cross-border payments is dependent on the interlinking of real time market infrastructures and financial institutions to enable faster, more seamless transactions around the world. In October, SWIFT announced a proof of concept with EBA Clearing and The Clearing House (TCH) that demonstrated the feasibility of synchronizing settlement across existing instant payment systems with the speed and agility that meets with the Bank of International Settlements CPMI targets.
• Agile innovation. SWIFT is upping its game in terms of driving industry change, and as part of that focus, conducted many innovation sprints in 2022 to rapidly explore areas that are top of mind for customers. Through its Innovation team, for instance, SWIFT is exploring areas such as AI/machine learning with a view to developing new service features.

Accelerating transformation: Looking ahead to 2022

In 2022, SWIFT has ambitious plans to accelerate adoption of its new services across the global financial community, with SWIFT Go providing the underlying infrastructure for the world’s low value cross-border payments. And the next iteration of the Payment Pre-validation service, coming in the first half of 2022, will be powered by sophisticated predictive analytics to further boost coverage and accuracy.

SWIFT also will start introducing an enhanced platform that will take SWIFT’s capabilities way beyond messaging. The platform will provide end-to-end transaction management, orchestrating interactions between financial institutions and other participants to minimise friction, optimise speed and provide transparency and predictability. The platform will unlock new experiences for end customers with faster settlement, enhanced end-to-end data and value-added services – enabling a truly instant and frictionless experience across SWIFT’s network connecting 4 billion accounts in more than 200 countries. 2022 will be the starting point, with traffic expected to ramp up on the new platform in 2023 and beyond.

SWIFT has support from across the financial community for the transformation it is driving.

David Kretz, Global Head of Strategy and Payments, Global Transaction Services, Bank of America, said: “This past year, SWIFT helped lay the groundwork for the transformation of cross-border payments in 2022. The migration to ISO 20022 in particular will enhance the quality of data within payments messages. This will allow more consistent processing across global clearings, and create opportunity for improved efficiency and insights for both corporate and financial institution users.”

Fan Yaosheng, General Manager of Clearing Department, Bank of China, said: “The launch of SWIFT’s new strategy in 2020 was a landmark moment for international payments and we are pleased to see progress has been made quickly and in close collaboration with the wider financial community. The SWIFT strategy promises to unlock a myriad of new opportunities for the industry, and we are excited to be able to bring these benefits to our own customers.”

Mike Bellacosa, Global Head of Payments and Transaction Services, Bank of New York Mellon, said: “We know that our customers prioritise security, client experience and cost-effectiveness when moving money across borders. The initiatives SWIFT has launched this past year help us provide an enhanced service to our clients, and we anticipate more enhancements to come as the strategy continues to take shape.”

Pierre Fersztand, Global Head of Cash Management, Trade and Payments, BNP Paribas, said: “With ISO 20022 adoption in progress at banks and market infrastructures and the evolution of the SWIFT platform, the SWIFT community is laying foundations that will accelerate innovation in cross-border payments in the years to come. Corporates are essential players in this journey and at BNPP, we are reaching out to our customers to help them construct their multi-year roadmap. We continue to encourage SWIFT in providing a collaborative space for the industry, where together we can build frictionless, fast, compliant and data-rich cross border payments.”

Amit Agarwal, Co-Head of Citi Treasury and Trade Solutions Payments and Receivables, said: “Citi is very supportive of SWIFT’s role as a driver of innovation in the development of a more widely replicable Market Infrastructure interlinkage model, and the creation of standards to open Instant Payments systems to cross border. This work has created a clearer path for the community to a vastly improved 24/7, instant end-user experience. Additionally, this streamlined payments model has the potential to provide greater access, economic progress and support of growing ecommerce and marketplace flows.”

Ole Matthiessen, Managing Director, Global Head of Cash Management, Deutsche Bank, said: “We are pleased about the recent launch of beneficiary account verification (BAV) services, which perfectly complements our own Deutsche Bank client strategy. We are looking forward to continue our partnership and collaboration with SWIFT and the community in the BAV space, ultimately benefitting both our Corporate and Institutional Clients by increasing cross-border payment efficiency while reducing fraud and exception handling”

Tom Halpin, Global Head of Payments Products Management, HSBC, said: “The scale of the SWIFT network is vital to driving the industry change that enables frictionless cross-border payments, and enables our community to adapt rapidly to changing customer needs. For HSBC, SWIFT is a critical and collaborative partner, equally committed to driving innovation that helps our customers do business at pace.”

Umar Farooq, Global Head of Financial Institution Payments and CEO Onyx by J.P. Morgan, said: “We’re pleased to see SWIFT focusing on the transformation of underlying infrastructure for global money movement, aligning with the financial industry’s expectation for continued innovation and digitalization.”

Philip Panaino, Global Head of Cash Management, Standard Chartered, said: “Since their new strategy was announced, we have been working alongside SWIFT to co-create the vision for the future of payments for our industry. The Innovation Sprints that have been run this year have been crucial, and we look forward to working with SWIFT further to innovate in the areas our clients care most about.”

Paul Camp, Head of Global Treasury Management, Wells Fargo, said: “We have been pleased to see several new services and enhancements from SWIFT come to life this year. We appreciate the open dialogue with SWIFT, as well as its commitment to understanding Wells Fargo’s global transaction banking priorities.”

About SWIFT
SWIFT is a global member owned cooperative and the world’s leading provider of secure financial messaging services. We provide our community with a platform for messaging and standards for communicating, and we offer products and services to facilitate access and integration, identification, analysis and regulatory compliance.

Our messaging platform, products and services connect more than 11,000 banking and securities organisations, market infrastructures and corporate customers in more than 200 countries and territories. While SWIFT does not hold funds or manage accounts on behalf of customers, we enable our global community of users to communicate securely, exchanging standardised financial messages in a reliable way, thereby supporting global and local financial flows, as well as trade and commerce all around the world.

As their trusted provider, we relentlessly pursue operational excellence; we support our community in addressing cyber threats; and we continually seek ways to lower costs, reduce risks and eliminate operational inefficiencies. Our products and services support our community’s access and integration, business intelligence, reference data and financial crime compliance needs. SWIFT also brings the financial community together – at global, regional and local levels – to shape market practice, define standards and debate issues of mutual interest or concern.

Headquartered in Belgium, SWIFT’s international governance and oversight reinforces the neutral, global character of its cooperative structure. SWIFT’s global office network ensures an active presence in all the major financial centres.

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Michael Turner
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SWIFT@Finsbury.com