European banks embrace Swift gpi

By Jon Watkins

The French bank recently launched Swift gpi in Germany, Belgium, Spain, Italy, Netherlands, the UK, Switzerland, Hong Kong and Singapore. It was one of the early adopters of the initiative, joining in 2017. The solution covers payments issued and received by Societe Generale in 11 countries (those named above plus France and Monaco) denominated in euro or other global currencies.

“More than one third of Swift gpi payments issued by Societe Generale are confirmed by the beneficiary bank in less than five minutes. This performance alone demonstrates the efficiency of our collaboration with Swift and the added value that gpi holds for our clients,” says Desserre.

By using gpi, SocGen enables clients to track and manage their cross-border payments. Benefits include increased processing speed of global payments, fee transparency, real-time payment tracking, and end-to-end payment information transfer. Corporate treasurers will soon have access to the gpi tracker through the SG Markets platform or via host-to-host reporting solutions.

Since it was launched during 2016, more than 450 banks have joined the Swift initiative and can channel payments into more than 200 countries – representing 78% of Swift’s total cross-border payments in volume. In February 2018, a mix of 22 banks and corporates initiated a pilot to test the Swift gpi for Corporates (g4C) standard. It enables corporates to initiate and track gpi payments, to and from multiple banks, directly from their ERP and treasury management systems. The standard delivers a fully integrated, single view on the status of their cross-border payments.

By October 2018, the majority of corporates and banks in the pilot went live on the standard, including Airbus, BBVA,, Borealis, Citi, Deutsche Bank, General Electric, IATA, JP Morgan, LVMH Moët Hennessy Louis Vuitton, Microsoft, Ping An Group, Roche, Sumitomo Mitsui Banking Corporation, Societe Generale, Standard Chartered Bank and Swift Treasury.

Thibault Moncouet, corporate finance operations, Airbus Integrated Treasury, said at the time that the pilot had been “the perfect opportunity” for the company to “co-create a common solution that responds to our requirements”. It was important for corporates that banks offer a standardised solution, he said, instead of “us having to adapt our systems differently depending on the bank we are working with”.

Lisa Wagner, group treasury manager at Microsoft said: “The ability to access a greater level of payment information in a timely manner through Swift gpi is bringing immediate benefits to our payments experience with greater transparency and responsiveness to our vendors. Providing multi-bank information all in one place and in the same format fits into our modern finance roadmap.”

The solution solves a number of significant challenges for corporate treasurers, by allowing real-time tracking of payments, facilitating more accurate reconciliation and preventing costly and time-consuming investigations for missing or incorrect payments.

Peter Claus-Landi, senior director, Treasury, GE, said: “The biggest value that gpi delivers to GE, as well as the rest of the corporates, is the transparency and the defined service level agreements around the transaction lifecycle of the payments. With g4C, we will finally be able to have a better understanding of how long it takes for a payment to move from point A to point B, so it will help us with optimising liquidity.”

The platform also gives corporate treasurers full transparency over fees and FX, providing insights into the most efficient way to send payments around the globe. Claus-Landi added: “The overall data insights that gpi will provide are going to be huge for corporates as it will unlock a lot of information that we’ve never been able to see before.”

Societe Generale’s Desserre believes there is pressure on banks from many different sources; regulators are pushing banks to make payments faster, fintechs are challenging banks over efficiency, and correspondent banking customers are demanding tracking and transparency. Banks are also pressuring themselves by implementing gpi, which highlights how efficient a bank is. “It’s not just a question of processing – gpi is also a question of processing payments efficiently and in a timely manner. That is a challenge for some banks. Second and third tier banks – some of which still use Swift manually – may find it difficult to service clients in the faster and instant payments future.”

The next phase of Societe Generale’s gpi implementation will be to offer Swift gpi through an API, so that clients can check the status of their international payments themselves. “This is a win-win because the client can get answers more quickly, when they want, and the bank can deliver better service to clients without as much work.”

Meanwhile, in Spain during March, Swift announced that six Spanish banks, accounting for 85% of the country’s cross-border payments, had adopted gpi. The banks are Banco Sabadell, Banco Santander, Bankinter, BBVA, Caixabank and Grupo Cooperativo Cajamar.

Carlos Dalmau, head of international solutions at Banco Sabadell, said the solution had helped the bank to incorporate added-value features for its clients, increasing processing speed and bringing transparency and traceability to cross-border payments. “Swift gpi gives visibility and autonomy to the different business areas, which now have a clear view on the status of their payments. Banco Sabadell will keep expanding its cross-border payments offering as new Swift gpi services are launched.”

Stéphanie Rodriguez Aniorté, head of product – global FI GTB at Santander Corporate & Investment Banking, said Swift gpi would allow the bank to reinforce the relationships with clients by offering them a “continuously improving experience for their international transfers”.

There are a number of initiatives in the pipeline for gpi this year, including a Stop and Recall capability, which will enable the immediate halt of payments not yet credited and the efficient recalling of credited payments. Also, payment initiation and tracking will be extended to multi-banked corporates, and Faster gpi Payments will deliver universal instant payments. Other projects in the pipeline are:

  • Pre-validation, reducing friction by pre-validation payment information
  • Case resolution, improving customer experience through efficient processing of enquiries and investigations
  • Closed ecosystem settlement, providing fiat settlement for trade and platform ecosystems
  • Notification/visibility incoming, enabling tracking and notifications for incoming payments
  • Request for payment, enabling an integrated procure to pay solution for cross-border payments
  • Financial institution transfers, tracking for high value financial institutions
  • Defining a cross-industry common API
  • Designing an API portlet, enabling smaller banks to implement the gpi Tracker without the need for detailed coding.
More recently, banks from France, Germany, Italy, Luxembourg, Russia and Spain have joined with Swift to test real-time gpi cross-border payments through the Eurosystem’s Target Instant Payment Settlement (Tips) platform. The European Central Bank (ECB) and Swift initiative aims to extend the reach of instant cross-border payments into the European market by enabling gpi in Tips. Banks will carry the cross-border legs of the payments, which they will then settle through Tips, allowing for instant crediting of accounts at ultimate beneficiary banks across Europe. Among the banks participating in the pilot are Banque Internationale à Luxembourg, BBVA, Deutsche Bank, Natixis, Santander, Sberbank and Unicredit.

The ability to process gpi cross-border payments instantly, even when the final legs of the payments have to be cleared on arrival within the destination country, is key to ensuring ubiquitous availability of real-time cross-border payments, says Swift.

On average, 40% of Swift gpi payments are credited to end beneficiaries within five minutes. However, when the final legs need to be cleared within the recipient country, payments are sometimes delayed owing to the limited operating hours of local clearing systems. The real-time, 24×7 payment systems and longer ‘credit windows’ enabled by the continuous availability of central bank money settlement, via platforms such as Tips, can remove these delays, ensuring that payments can be credited in seconds.

A similar arrangement was successfully tested by Swift in 2018 with Australia’s domestic instant payment system, the New Payments Platform (NPP), and a group of banks from Australia, China, Singapore and Thailand. The trial successfully demonstrated that by enabling gpi in real-time domestic systems, cross-border payments can be effected almost instantly, even when they involve domestic settlement and non-gpi banks.

Swift is working with its members to extend the scope of this initiative to other real-time systems around the world.