A ‘LEGO moment’ for payments

ISO 20022 could be the foundation on which financial institutions can build an infinite number of creative solutions, says

MD of Payments and Transaction Automation at valantic FSA

The interlocking principle of the LEGO brick made it unique when it was launched onto the toy market, inspiring boundless creativity as each generation added its own imaginative new layer.

According to Simon Wilson, valantic FSA’s MD of Payments and Transaction Automation, the universal adoption of payment messaging standard ISO 20022 is financial services’ own ‘LEGO moment’. Once fully embedded in the world’s transaction systems, the standard will similarly trigger a period of intense digital construction, with as-yet unimagined interlinked products and services sitting on top of a new payments architecture. What will these structures look like and how far are they from becoming a reality? Wilson is realistic: there’s a way to go. But valantic FSA is already enabling clients on the journey and inspiring their imagination.

Founded in 2012, valantic FSA is now one of the leading business solutions technology platform companies, enabling customers to flexibly buy and build powerful electronic trading, post-trade, payments, and enterprise data capabilities. Its client list includes giants of banking, such as Erste Bank, Santander and UBS. The flagship platform within its payments vertical is X-Gen, a low-code, end-to-end messaging and workflow automation solution for financial institutions, capable of handling both ISO 20022 MX messages as well as legacy formats, which slots into an institution’s existing systems, including client channels and core banking platforms.

Wilson’s colourful LEGO metaphor is an apt one for what’s happening in the payments industry and, hopefully, it’s a portent of what it can do for banks’ contested place within it. The LEGO company is, despite fierce online competition for kids’ attention, still innovating and is still the most valuable toy company in the world, after all. Could ISO 20022 better help banks compete with their own digitally native rivals? We asked Wilson how he sees this ‘LEGO moment‘ panning out.

their budget on just keeping the lights on, keeping one step ahead of the regulator, that they’re struggling to invest in real change that adds value to customers.

But to compete with those new entrants, some of which are looking pretty mature themselves now, they will have to change to offer better value and better services. The ISO 20022 standard is helping to bring that about.

TPM: The deadline for full implementation of ISO 20022 across many critically important systems is looming fast. What does that mean for the industry, and the players within it?

SW: It has taken some time for that deadline to sink in, and it’s been shifted a few times already – I think there’s a natural expectation that this stuff can be done, but it’s harder in reality than maybe many people appreciated.

THE PAYTECH MAGAZINE: How has the cross-border payments industry changed in recent years and how has that impacted the banks?

SIMON WILSON: In many ways, cross-border payments have been at the bleeding edge of change – not only because the shift to ISO 20022 has been coming for a long time, but also because, historically, cross-border has been one of the most profitable areas for banks, and, like bees to a honeypot, it’s attracted a lot of competition.

That’s forced banks to modernise. Banks have been spending so much of

Everyone knows that the hard deadline for everyone is coming, but it’s very dangerous to leave it until 2025 [when the Swift migration completes]. The sooner the basics, in terms of a compliance foundation, are in place, the sooner banks can look forward to leveraging the revenue opportunities around it. The technology modernisation journey will take some time, for sure.

So, while there’s core system ISO 20022 transformation, there are plenty of short-term fixes as well. They’re very valid and absolutely have their place, but remember that this is about reducing complexity long term, to help reduce costs, so we mustn’t let those short-term fixes become legacy themselves.

Thinking carefully and strategically about what the path to true modernisation might look like, in a risk-adjusted, sensible fashion, is all part of the journey that many banks, in reality, are still on.

TPM: So, would you say most banks are ready for ISO 20022 adoption and implementation, or not?

SW: I’d say the banks are broadly in a good position, and if not ready today, they will be imminently. But the pressure has been high and they’re dealing with it in different ways.

As I said, there’s lots of core transformation of technology needed, in terms of moving to ISO, but there’s a lot of shorter-term wraparound message transformation capability being used, too. Long-term, to be fully digitised, to be modern, to reduce the costs of running a payments ecosystem, there are lots of options for banks.

But then there’s also an eye to how banks make the most of the business opportunities that ISO 20022 presents. We’ve barely started on that curve yet, and it will be a refreshing change to talk more positively about the opportunities and benefits of the change, and not just the pressure of the deadline!

TPM: So, how much thought is being given to leveraging the added-value opportunities presented by a mass migration to ISO 20022, and how can technology providers such as valantic FSA help with that?

SW: There’s one challenge for banks in addressing system replacement and message transformation. There’s another in leveraging that – looking at the operational setup, bringing in new technology to analyse the data and help use it to automate processes. There’s another area, as well, and that’s educating the banks’ customer base. Ultimately, this is all about providing better value for customers, whether that’s through smoother, faster processing of payments, or through new services that leverage the data, right? And, on the client side, their systems aren’t all shiny, new and modern, either. through services such as Request To Pay, combining that with the ISO 20022 data and real-time, so that maybe you’re providing invoice financing, or trade finance, on the back of goods hitting the shore, rather than waiting for a whole bunch of paperwork to be progressed?

The more banks can help their corporate client treasurers think about the data that they’re providing to them, the more the bank can use it in an effective way, and return value to the corporate – as, indeed, fintechs are starting to do. More value will be returned to the banks that way, too, which means they can monetise all the investment they’ve made in the move to ISO 20022.

So, there are three aspects there for them to grapple with – the first is about getting it right, the second and third are about making the most of it.

Once ISO 20022 becomes the universal messaging standard for all transactions, the foundation will be there for creating an almost limitless range of products and services on top. It's a bit like LEGO bricks. You get your key blocks locked in place –in this case, your core technology, capable of handling MX messages – and then add or swap out other blocks to create any number of value-added services.

We’ve barely scratched the surface of the inventiveness and innovation that could come around the products as moving money becomes more standardised and more commoditised, which is part of the advantage of a single dataset.

The more that it becomes about leveraging it in the product domain – by integrating evolution and modernisation of the whole banking architecture, operations as well as IT – the more the benefits for corporates will really become apparent. And there will eventually be some big winners among the banks that lead the way in implementing those things.

TPM: What are some of the benefits for corporate clients of banks that embrace ISO readiness earlier than some of their competitors?

SW: There’s a lot of opportunity around the new data standard, not just from an efficiency perspective – which is important, but the exciting stuff is the new services that can be provided around the standard, especially when you’re combining the data with real-time.

As I said, it’s not just about how you process a payment – moving money, in the form of data, from A to B. It’s about how you leverage that in the realm of other products and services that the bank offers. How can you improve the granularity at which you credit rate your risk, from a lending perspective? How can you improve the reconciliation valantic FSA valantic FSA is at the heart of the evolving banking and payments landscape –delivering powerful applications through X-Gen, our low-code/no-code platform.

TPM: What are some of the challenges, and maybe opportunities, coming out of cross-border payments, now that people’s expectation is of real-time movement of money?

SW: ‘Expectation’ is certainly the way to describe it because what we often see is people’s experiences in their lives as an individual, are also transferred to the corporate world. Even when it’s B2B, that’s true of payments, too.

Passionate about payments.

To find out more about our low-code payments solution, visit www.valantic.com/fsa

Digitize. Augment. Evolve.

That expectation of speed is something that the industry has come under a lot of pressure to provide, and I believe it’s made great progress. If you look at Swift, I think the latest figures are something like roughly 70 per cent of the network payments that are cross-border go through within five minutes. Now, that’s not instant, but given the complexities, that’s pretty darn good.

Getting that last 30 per cent – that five minutes down to 30 seconds, or whatever it is – is very challenging, though. It’s challenging operationally to be able to deal with the complexities of real-time and cross-border, but it’s also challenging in terms of the technology change that is needed, and how unsuitable banks’ legacy systems are.

We’ve seen banks take different approaches, at different speeds; some are further on that journey of replacing their core with ISO-native systems, some are doing message transformation around the edge. To be honest, most are doing a bit of both, in different ways. But, ultimately, if we are to realise the advantages of real-time for customers, and of the additional data that the new ISO standard brings into play, then new technology is needed.

It’s needed to make things smoother, more efficient, to leverage that data to provide better fraud and sanctions checking, for instance, and to provide new services. It’s a challenging area, but we see a lot of customers taking a very proactive approach to it.

For me, what’s going to be really interesting is the talk of equality in terms of the credit transfer standard, SEPA, and Instant, and equality in pricing. Now you’ve got something that’s going to trigger demand, because it’s not going to cost more to do instant.

Coming back to what we said before, in the corporate world, it’s going to become much more of an expectation. And that will bring challenges. As the volume shifts, and other services are introduced around things like Request to Pay, that’s going to bring pressure on technology that was maybe introduced as a short-term fix for some people, as opposed to a robust, long-term kind of capability.

Operationally, dealing with a higher volume of rejects and complications, albeit there should be less with ISO 20022, puts pressure on the back office, too. So the more you can use artificial intelligence and robotics to deal with those exceptions, rather than people, the lower cost and the better it will be.

TPM: You’ve alluded there to real-time payments presenting banks with an even greater challenge when it comes to identifying and preventing financial crime. Is the increased dataset behind an technology, you can leverage that data, and react to it much more quickly, which means spotting things earlier. There’s a consistency in the data, to help with the checks around sanctions and AML.

So, yes, a general recognition and commonality helps improve efficiency and the quality of what people are doing. But there isn’t any room to be complacent. We’re going to have to keep modernising, to keep ahead of those bad guys.

TPM: ISO 20022 is just one part of the payments landscape – it just happens to be the noisiest one at the moment. What other events should banks be focussed on?

ISO payment really going to help banks combat anti-money laundering (AML) and other types of fraud? SW: It’s always been a race to stay ahead, between the bad guys and the good guys. But the world, from a payments perspective, will now at least be on the same message set. I won’t go as far as saying on the same standard, because there will still be plenty of variations, even within ISO 20022, but it clearly helps when you’ve got the same recognition of what data is there. With the upgrade of

SW: There are things on the horizon, that will be near soon enough. Dare I mention PSD3 and the further evolution of open banking, and how that’s leveraged? And, as I’ve already mentioned, you’ve instant payments in Europe, and the mandate for all banks to do that, which is coming. What I find fascinating is that with a single ISO standard in the cross-border space, there’s the coming together of the last leg – direct connectivity – from a real-time perspective between schemes. And that’s upping the ante.

There’s been an interesting proliferation of different ways to move money globally. Only a few weeks ago we saw Singapore and India link their real-time schemes – two big financial centres, with big populations, so, potentially that’s a huge volume of payments that might go through.

Whether it’s cross-border or domestic, there are also the increasing number of wallets, different mechanisms for payments, and, not least, the introduction of central bank digital currencies, and what that enable. There is no end of change. And still so much that’s unknown. For us, it’s about helping banks modernise their technology, and have the right foundation of flexibility to be able to react to whatever that future brings, in whatever order it might be. Whatever happens, I think we all know it’s going to be an exciting ride.

Dual purpose: And you thought agile working and waterfall programme management were on different planets…

While it sounds unlikely, combining agile methodology with a deadline-driven waterfall approach worked well for Danske Bank in meeting existential demands on its core payments system. Christian Luckow, the man who leads the teams, explains

Spare a thought for the Nordic banks. They managed the ‘big bang’ migration to payments messaging standard ISO 20022 by Europe’s real-time gross settlement system

TARGET2 in March. But – unlike their colleagues further south, who could catch their breath before Swift begins its transition to the same standard in November – they were already knee-deep in another structural change.

The project, called P27, would have created the world’s first integrated region for real-time domestic and cross-border payments in multiple currencies. ‘Would have’ because the plug appeared to have been pulled on it in April.

Both the adoption of ISO 20022 and the creation of P27 for Denmark, Finland and Sweden, was in response to the demands and expectations of businesses and consumers who want and require instant, safe and cheap digital payments, especially in the cross-border space.

The pressure of demand for digital payments is exemplified in Sweden where cash was used for only eight per cent of business transactions by the end of 2022, according to the Copenhagen School of Business, while 95 per cent of the country’s 15-to-65-year-olds have downloaded mobile payments app Swish, which is co-owned by a majority of the country’s banks. leaving no clear indication of what – if anything – will happen next.

Managing wide-ranging structural programmes like ISO 20022 and P27, while still keeping the wheels on the banking bus and an eye on future developments, like central bank digital currencies, has made for a challenging few months, admits Christian Luckow, who leads Danske’s Core Payments tribe as well as its innovative Payments Centre of Excellence. And it got even more challenging when P27 withdrew its clearing licence application from the Swedish Financial Supervisory Authority,.

“This actually means we are even busier now, as we have to connect directly to the central banks instead of through P27,” says Luckow. “The ‘simplification’ that P27 was supposed to bring is not happening – at least for now.”

Instead, besides ISO 20022, the Danish and Swedish central banks’ implementation of TIPS will drive additional complexity and effort for Luckow’s teams.

That’s not to say he isn’t excited about the major advantages that ISO 20022’s MX-based messaging will have over the existing MT text system.

“The challenge [with MT] is that the data in many cases has to be interpreted,” he told an audience at a Banking Renaissance event earlier this year. “That means more data gets caught up by anti-money laundering checks and by missing data elements. So, straight-through processing goes down, leading to a worse customer experience. If instant payments are not working, we get complaints. The issue is that we are getting more and more volume.”

Speaking outside of the conference, he tells us: “Especially in Denmark, instant payments have been around for quite a while, and are very heavily used. Instant cross-border payments is what people are expecting now. Customers have kind of said ‘why can I make a payment to my sister in the next town within a second, but if I want to make a payment to my sister who lives in Sweden it takes two days? It doesn’t make any sense. It’s only 30 minutes away, across the bridge?’. Which I think is a fair question. But, as you can imagine, with different legislations, different jurisdictions, it’s not easy to do anything cross-border,” says Luckow.

Regardless of what happens now to P27, he has no doubt that the standardised and data-rich formula of ISO 20022 payment messages will eventually be a true game changer. At Banking Renaissance, he cited as an example the challenge Swedish banks currently face in processing batch payments of salaries at precisely a minute after midnight, as decreed by Swedish law.

“Imagine the amount of payments that have to happen at the same time because of that legislation. Today, that’s difficult to fit into a payment standard because it’s plain text files, and, if you introduce a data element, everybody has to use slight modifications. Whereas, with ISO, because it’s MX-based, you can essentially add optional components, which means the standard can be much more widely used than the ones we use today, and we can start adding much more specific data elements – such as remittance details. That essentially means it’s going to be a lot easier to reconcile payments with invoices. I come from invoice financing, so, for me, this is a godsend and I can’t wait for it to be widely used!” modernising agenda, each demanding very different ways of thinking and working: the waterfall versus the agile approach.

Then there are the clear advantages to do with compliance.

“There is so much more legislation, a lot more focus on fincrime. That means we are kind of getting dragged in the opposite direction, in terms of being able to service our customers to the level that they are used to,” he says.

ISO 20022 can help streamline that, particularly when it comes to identifying the origin of a sender whose payment has gone through multiple banks before reaching the payee’s. Digging for that data among MT messages to meet compliance, means the customer may well be kept waiting for the payment to clear.

“It’s a very complex environment to work in,” Luckow told Banking Renaissance. “We have part of our business that basically runs on the mainframe… but then we have our fully agile development centre that does everything the way that we now know we should be doing things. Sometimes those two overlap.”

And that’s precisely what they did to great effect in the implementation of ISO 20022. Luckow’s teams managed to reconcile the ‘create fast, fail fast’ methodology of fintech ‘agile thinkers’ with the ‘waterfall’ approach of traditional rigid deadline programme management. And even Luckow was surprised at how well these two apparently antithetical approaches worked together in practice.

“We have established that the agile mindset works incredibly well [in a waterfall environment],” he explained. “We just have to do it slightly differently because we don’t have the luxury of developing things and fixing them on the go. We’re using the agile methodology to still move us forward in the sprint, do incremental improvements, but with a fixed deadline: it has to work by that date, no ifs or buts.

“I think our employees, once they got used to the idea, have quite enjoyed it because one of the challenges that we found as an incumbent bank with agile was ‘if I can always keep reiterating, if I can always be improving, what is the urgency to actually get something done?’

Notwithstanding these and the many other advantages of everyone adopting ISO 20022, the variable speeds at which multiple actors move towards it over the next two years will almost certainly create its own problems, particularly on the Swift network, says Luckow. It’s a situation acknowledged by Swift, which has created a workaround that allows banks to fetch any data missing in the conversion between the old and new formats in order to perform sanctions screening and other tasks.

None of this stuff is easy, but it’s made even more difficult if, like Danske Bank, you’re maintaining a 20-year-old core operating structure while introducing a

“Here, we do have very firm deadlines and the stakes of us not delivering are massive. But combining it with a methodology that means you're constantly moving, constantly improving, works really well.”

Later, he tells us: “We’ve had to change mindset. We’ve had to look at it a lot more strategically, in terms of when so much is changing at the same time, how can we do that efficiently? It also means knowing what we should not be focussing on right now, and then go back to it later.”

Luckow reckons it will take three to four years for the payments industry to stabilise after such a seismic change as ISO 20022. Once it’s fully functioning under the new regime, though, the standard will ‘enable so much more’, he adds.

“Then we can start focussing on the actual customer value again.”

The world of cross-border payments has long faced a number of challenges, among them security, high costs, lack of speed, and poor transparency.

A further one is lack of uniformity and the need to bridge the disparity between large players and smaller enterprises. Small and medium-sized enterprises (SMEs) will typically experience higher costs because they make smaller transfers, meaning the cost-to-value ratio is much higher.

The goal for cross-border payments is to create fast, secure, cost-efficient transfers that work for everyone, irrespective of who is making the payment and how much is being transferred. Thanks to initiatives such as the G20 Roadmap, the new ISO 20022 standard for exchanging payment messages, and the growing number of real-time systems worldwide, the cross-border payments frontier is moving in the right direction.

Change is also being driven by organisations offering alternative rails, such as Mastercard, which is heavily involved in cross-border innovations.

Alan Marquard is executive vice president of transfer solutions at

Mastercard. “My role focusses on international money transfers, which encompasses businesses such as Mastercard Send [a platform that enables secure, near real-time payment transfers], Global Bill Pay and Cross-Border Services.

“We’re seeing that cross-border is in much greater demand than even just a few years ago and responding to that. People are sending money home more often and in large amounts, and migrant labour is increasing. And since the pandemic, there has been a big increase in digital payments.

“As domestic payments have become contactless and digitised, the expectations for service quality for cross-border payments have also increased.”

However, some customer needs and expectations are non-negotiable. “Security is fundamental,” he says. “That means transaction security, knowing where the money is and that it’s traceable, and, of course, the security of the data itself. Speed of payment is also important, particularly for remittances.”

Marquard contends that the complexity of cross-border payments is sometimes underestimated by users, not least when you compare it with email, where information moves instantly and seamlessly across borders.

“People ask, ‘why can’t I send money as quickly as an email?’,” he says. “When you look at domestic, we’ve really progressed. There are real-time payment systems in more than 60 countries now, and we’re getting used to doing things instantly. But when it comes to cross-border, it’s a complicated, spaghetti-like system.”

Those expectations among customers are not universally the same, of course. While businesses might want integration with accounts payable and accounts receivable systems, people sending money to their loved ones are usually more concerned about the speed of payment, because money is often needed urgently.

Users don’t want an explanation of why it can’t be done, of course. That‘s for the industry to solve. Historically, cross-border payments were mainly used by big corporates making large-value payments via a correspondent banking network. Although that model remains important for high-value payments, it’s not suitable for small-value payments, which is where providers like Mastercard are filling the gap.

“One of the biggest challenges is maintaining a network and having enough reach,” says Marquard.

“You need to make payments to a huge number of destinations. In a correspondent relationship, that means having banks in every country and having an individual relationship with each one. Some of the big global players in correspondent banking have de-risked, meaning they have pulled out of jurisdictions they deem high risk because of money laundering, for example.

“We can connect to 90 per cent of the world’s population, with all the related onboarding, know your customer (KYC), transaction monitoring and fraud prevention that goes with it. It involves a lot of technology and there’s a huge operational machine behind it. Liquidity management and FX management are critical, and there’s the whole licensing regime to also take into account. We automate as much as possible, and we’ve invest in and maintain the infrastructure. The result: they provide their customers with a full-scale cross-border solution, which gives them access to more than 100 markets from a single connection.

“The overall size of cross-border payments is something like $250trillion a year,” says Marquard. “With our cross-border service, we focus on flows of around $23trillion a year, which is a sizeable chunk, and it needs to be managed carefully.

“Remittances, in particular, have a crucial impact on people’s lives, so promoting financial inclusion is very important.”

Climate For Change

Regulations have helped to encourage innovation, and there has been a concerted effort to create a framework for are linking payment systems with QR interoperability, so now you can make purchases in another country on QR codes, and it gets processed through your domestic instant payment system, and then on the other side.”

Requirements such as KYC, AML, messaging standards and data rights sit in the private sector, and this is where it gets complex, as you need everyone to be aligned for cross-border payments to work smoothly. Liability is an issue when there are different KYC standards in the payment chain, and because the checking process is more onerous, it slows down payments and increases costs.

So what effect will ISO 20022 have? Does Marquard view it as a panacea for cross-border payments?

“In its own right, ISO 20022 is a really

International co-operation:

Project Nexus is a blueprint to connect multiple instant payment systems taken a really big step recently with a new tool called Cross-Border Services Express.”

It enables financial institutions to seamlessly set up an international payments offering for their customers, notably the consumers and SMEs that have long needed better cross-border payments. The Express Service levels the playing field and complements Mastercard’s existing Cross-Border Services offering.

“For a bank that wants to offer crossborder payment services, we offer integration with risk management systems, payment systems, or reporting,” he adds. “A lot of players aren’t API-ready. So, by working with the fintechs Payall and Fable FinTech we’ve devised an easy integration approach. We supply an end-to-end white label service that provides access to our network via a customisable and easy-toimplement interface, and additional high-value services, such as KYC and AML.”

This means smaller banks can do quick and easy integrations without having to change that goes beyond the standard interpretation of ‘regulations and compliance’. Initiatives by central banks, the G20, and the Committee on Payments and Market Infrastructures, while not necessarily laws, act as a prompt to the private sector. Then you have actual legislation like PSD2, which makes transacting safer and stimulates open banking.

One of the goals of Project Nexus, which sprang from the G20 Roadmap for improvements to cross-border flows, was to create an interlinking proposition and standardise the way the growing number of instant payment systems connect.

“Project Nexus has got the industry focussed on interoperability and there’s a lot of innovation now,” says Marquard. “Take Singapore, for example. They good thing,” he says. ”However, remember that the big players are the early adopters, while there are plenty of small institutions that aren’t there yet. So, we have a translation layer to take payment instructions in any form.

“The other thing about ISO is that everybody thinks it is a kind of universal, harmonised standard in its own right, but it’s being implemented differently and not e veryone has all the information that needs to be input to minimise failures.

“Safety, trust, and simplification of choice are what I would like to see above all,” he says. “That’s the proposition we’re building at Mastercard. Our strategy is to provide a multi-rail offering, process all transactions easily and securely, and continue to inspire trust in our brand.”

Hailed as having the potential to revolutionise cross-border payments, the financial messaging standard ISO 20022 is set to unify the global financial industry once and for all through a common language for communicating the world’s transactions.

Already the most widely adopted financial messaging standard globally, 2023 is seen as the year in which it begins to achieve critical mass, enabling the speedy transfer of financial information – from payments to trading securities –practically everywhere by using a format in which the information accompanying a payment is less likely to get garbled or lost in translation. But not just that.

In the almost 20 years since the standard first became available, technology has advanced to unlock potential added-value services, unimagined at the time of ISO 20022’s introduction. By leveraging the additional, much richer information that can accompany a payment in the ML format, it is envisaged that cross-border payments will not only reach the same speeds as instant domestic payments – the transparency afforded by extra data substantially reducing delays in, for example, sanctions screening – but also unlock a host of added-value services for clients.

Among the big players now signed up to the standard are the Bank of England, which moves its Clearing House Automated Payment System (CHAPS) along with its Real-Time Gross Settlement System (RTGS) to ISO 20022 in June, the Single Euro Payments Area, whose settlement system TARGET2 transitioned in March, and payments messaging infrastructure operator Swift, which began its phased migration in November.

In the US, while anyone using The Clearing House’s (TCH) real-time payments (RTP) service will already be on ISO 20022, TCH has delayed the migration of CHIPS – the largest private sector USD clearing system in the world – to 2024, so it can observe the experience of systems that have already migrated.

This year, too, the Federal Reserve’s new instant payment system, known as FedNow, will be launched using the standard. A recent Mastercard review of 61 other real-time payment systems around the world found almost two-thirds were based on ISO 20022.

We asked Marc Recker, global head of product – institutional cash management at Deutsche Bank, to reflect on the journey so far and what might lie ahead.

THE PAYTECH MAGAZINE: Can what has happened to cross-border payments be described as a revolution?

MARC RECKER: Not a revolution, but a necessary evolution, which kicked off in 2017. Back then, some leaders from transaction banks, under the orchestration of Swift, came together and said ‘we need to change’, because there were very competitive pressure from fintechs.

If we hadn’t done something, clients would have left us. And that was where the industry, in a record timeframe, brought out a product called Swift gpi, that brings transparency, speed, and better client experience as a service.

It was a huge success because the industry embraced that change and because of the increased collaboration among industry peers in the market, and the willingness to continue to drive the change agenda. That journey is continuing, by focussing on the friction points around payments, not only the payments processing itself.

TPM: What has been the consequence of Swift gpi?

MR: What we did back in 2017 was bring in transparency. And the first result that we could observe is that now more than 70 per cent of all cross-border payments processed through the Swift network are processed in under five minutes. I know it’s not instant, but it’s close to real time, because you cannot underestimate the complexity of a cross-border payment.