Deutsche Bank’s ambitions are firmly in the cloud as it looks to improve cross-border payment tracking visibility by investing in the global payments innovation (gpi) initiative. Janet Du Chenne speaks to Wim Raymaekers, Global Head of Banking Market and project lead for the gpi at SWIFT, and Christian Westerhaus, Head of Product & Strategy, Institutional Cash Management at Deutsche Bank, to find out more.

A SWIFT-led initiative to improve the cross-border payments experience has gained considerable momentum since launching in January this year.

With 78 banks on board at the time Flow went to press, up from 51 in January, the global payments innovation (gpi) initiative shows that the correspondent banking industry is committed to meeting customers’ demands for real-time payments and transparency of fees and responding to disruption from new entrants.

The initiative will do this firstly by standardising payment processes through a set of business rules designed by SWIFT, in collaboration with participant banks. This global international standard will lay the foundation for a set of application program interface (API) initiatives, which will enable banks to provide their corporate clients with end-to-end tracking of payments, same-day use of funds, transparency of fees, and the transfer of rich payment information.

Visibility through the cloud

The ability of banks to provide end-to-end payments tracking will be made possible through a database ‘in the cloud’ hosted at SWIFT, currently being developed. This feature will provide end-to-end visibility on the status of a payment transaction, from the moment it is sent until it is confirmed – similar to tracking services provided by international shipping companies.

This goal, says Wim Raymaekers, Global Head of Banking Market and project lead for the gpi at SWIFT, has so far had good buy-in from large transaction banks and from domestic and regional banks and has, in fact, exceeded expectations since its conception in September last year. “It was the right idea at the right time given the payments industry faces demands for real-time services by clients and disruption by new entrants,” says Raymaekers.

The first phase of the initiative is under way with a pilot focused on business-to-business payments. Early results from the pilot will be presented at Sibos in September, with go-live planned for early 2017. Once live, banks that are signed up to the gpi will be able to access the service through APIs. “Agent banks can integrate it into their own channels and make it available to customers,” says Raymaekers.

To ensure standardisation, banks’ existing technology will also have a rule layer with service level agreements (SLAs), says Raymaekers, and SWIFT will make its new technology available with mutualised tracking, enabling banks to improve tracking for cross-border payments. “We are providing API access into the payment tracker which will become live with a graphical user interface, followed by open access,” says Raymaekers.

In the future, gpi allows for the digital transformation in payments by building on current technology. “In responding to market change, we cannot wait five years to improve the existing technology,” says Raymaekers. “With gpi, there will be the payments tracker in the cloud. The first step is to look at digital transformation, with much richer data being available.”

The real value

Christian Westerhaus, Head of Product & Strategy, Institutional Cash Management at Deutsche Bank, expects that the real driver of gpi lies in its deployment by banks, together with SWIFT, each for their own components. This means payments and processes will be executed on the basis of banks’ current infrastructure using SWIFT functionality. “The difference is that the new tracking of transactions won’t be via the chain of payments messaging as it is today. That tracking will instead be available in the cloud through SWIFT,” he says.

“This is where we will see the real benefits of standards and reach, via the international SWIFT network, and combining this with forward-looking solutions for tracking payments.” The gpi’s success depends on the willingness of correspondent banks to connect and banks enabling their corporate clients’ current accounts to benefit from the agreed gpi business rules. Its proof will be borne out of those banks making the investment and the enhancement of the global correspondent banking network. A critical mass of players and international payments has to be connected, he adds.

“In essence it’s about enhancing transparency, fewer investigations, and for customers it means same-day international transfers on the basis of what banks have already established, where state-of-the-art governance and business control processes are key. The gpi is also based on participating banks’ approaches to KYC, embargo filtering and regulatory controls, so it therefore underscores that you have to be compliant in the first place, that you have a willingness to co-operate on rules, a willingness to invest and a willingness to respond to the needs of corporates.”

To ensure same-day processing of payments, full transparency and traceability, Deutsche Bank will be making investments in gpi in alignment with its overall technology build plans, integrated with the bank’s IT roll-outs. Indeed, its participation in the gpi is part of the ongoing roll-out of the Bank’s payment process platform, with further investment in client service applications.

In keeping with financial institutions’ and client needs for speed of payments and traceability, the second phase of gpi, where the payments tracker goes live on the cloud, is when this efficiency and transparency will start to be delivered. “That is the basis on which we focus and on which we continue our build,” says Westerhaus. “The role of SWIFT as a standards body is key as is the role of the banks to agree on the concept and the rules, as well as the investment to achieve this step in the transformation of correspondent banking.”

Christian Westerhaus

Global Head of Products & Strategy, Institutional Cash Management

Christian Westerhaus

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