People have used many different methods throughout history to send messages to one another. Smoke signals were one of the earliest types of messages — these were used thousands of years ago by Chinese generals along the Great Wall of China to warn soldiers of enemy attacks. In the 16th century, the English Navy used “messages in a bottle” to communicate about enemy positions. During World War I, carrier pigeons with notes tied to their feet were sometimes the only reliable way to send messages about pending attacks. When it comes to international banking, the Society for Worldwide Interbank Financial Telecommunication (Swift) has been the main messaging network for initiating secure international payments for more than 50 years. Swift connects more than 11K financial institutions across more than 200 countries, underpinning trillions of dollars in transactions every day.Today, Swift is undergoing significant changes that are designed to enhance the speed, transparency, and reliability of cross-border payments. These include the transition to Swift GPI (Global Payments Innovation), ISO® 20022, and Swift Go.Swift GPI: The New Cross-Border Payment StandardSwift GPI has become the new standard for cross-border payments, addressing pain points such as slow transaction times and opaque fees. Most cross-border payments are now credited within minutes or hours, which significantly reduces settlement times. In addition, clients and community financial institutions (CFIs) now have full visibility of fees and payment status in real time, while users can monitor payment progress.For CFIs, Swift GPI improves customer satisfaction and reduces the number of payment-related inquiries, making them more competitive in the international payment space. More than 4.5K banks worldwide have adopted Swift GPI to enhance their cross-border offerings. To implement Swift GPI, CFIs must invest in technology upgrades to integrate Swift GPI features and train staff on how to leverage these tools to provide a superior customer experience. Alternatively, CFIs can align with a partner such as PCBB to leverage Swift GPI functionality. ISO 20022: A More Consistent Data FormatISO 20022 is a global financial messaging standard that provides structured, rich data to enhance the speed and accuracy of cross-border transactions. It offers a more consistent data format across different markets and payment types, which makes these transactions proceed more smoothly. Improved payment messaging data will enhance compliance processes and reduce errors, leading to faster and more efficient processing. Also, better data will improve risk monitoring for fraud and money laundering and help CFIs meet stringent regulatory requirements.In preparing for the transition to ISO 20022, CFIs should evaluate their messaging systems to make sure they can handle ISO 20022’s structured data. This will involve updates to back-office systems and training for relevant teams. In addition, CFIs should educate customers who enter wire transfer requests via an online banking platform or upload files from a business application. These files will need to be ISO 20022 compliant by November 2025 for international transactions.Swift Go: Designed for Smaller, Low-Value TransactionsSwift Go is a newer messaging service designed specifically for low-value cross-border payments. It provides affordable, real-time services to individuals and small businesses to meet the growing demands for fast, secure, predictable payments from these customers. Swift Go is similar to Swift GPI, but is used for smaller transactions that are often processed instantly or within one day. Swift Go offers predictable fees and clear foreign exchange rates upfront, which builds trust for customers using international transaction services. It allows smaller CFIs to compete with fintechs and other financial services providers in the rapidly growing low-value payment market.Other Swift System ChangesSwift is undergoing several other changes in addition to Swift GPI, ISO 20022, and Swift Go, including:
- The Swift Customer Security Programme (CSP). This program mandates security controls to protect the global financial system in light of faster and more transparent cross-border payments. CFIs connected to Swift must comply with a set of CSP security controls to mitigate cyber risks and attest to compliance with these measures annually.
- API integrations. Swift is increasingly integrating APIs (Application Programming Interfaces) into its ecosystem, allowing CFIs to access real-time data, enhance customer services and reduce operational costs. APIs enable more dynamic interactions between systems, speeding up processes like balance inquiries, payment status updates and more. By adopting Swift APIs, CFIs can offer real-time updates, seamless transaction tracking and enhanced customer service.
- New technology adoptions. Swift is adopting new technologies such as real-time payments and blockchain collaborations to remain competitive with fintechs, cryptocurrencies and blockchain-based solutions being offered as alternatives to traditional cross-border payment systems. Swift’s established infrastructure, regulatory backing and initiatives like Swift GPI and ISO 20022 give it a significant edge over newer entrants.
- Tools for regulatory compliance. As international payment regulations become more stringent, compliance with Anti-Money Laundering (AML) and Know Your Customer (KYC) guidelines is essential. Swift tools like the KYC Registry and sanctions screening solutions help CFIs manage these requirements effectively.
Enhance Your International OfferingsThrough initiatives like Swift GPI, ISO 20022 and Swift Go, the evolving Swift system offers CFIs a path to deliver faster, more transparent and more secure cross-border payment services. By embracing these changes and ensuring compliance with Swift’s security and regulatory requirements, CFIs can enhance their international offerings and remain competitive in a rapidly shifting financial landscape.
