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Benefits of gpi now extended to financial institution transfers

Benefits of gpi now extended to financial institution transfers

Securities,
30 November 2020 | 5 min read

New service brings full end-to-end transparency and tracking to high value MT 202 and MT 205 payments. With this, the full spectrum of payment types used by financial institutions on SWIFT now benefit from the transformed customer experience enabled by gpi. 

Financial institutions use an institutional payment to settle their obligations towards each other as well as for their own treasury operations purposes. 

A lack of real-time visibility and credit confirmation for these critical high-value payments can lead to a number of issues. These include counterparty exposure and incorrect assessment of intra-day liquidity positions, which result in costly missed deadlines, missed opportunities, misplaced liquidity and operating risk.

Being able to track all wire payments, MT 103 and MT 202s, and have them confirmed in real time is a crucial element in continuing to meet the expectations of our clients and internal service users.

Sarah Dunning, Commercialisation and Communications Lead for Clearing Transformation, Treasury Services, Wholesale Payments, J.P. Morgan

Following on from the success of SWIFT gpi in transforming the payment experience for customers using MT 103 customer credit transfers and cover payments, we have now extended the benefits of gpi to MT 202 and 205 financial institution transfers as well. 

Financial institutions typically use an MT 202 or 205 to perform treasury operations, settle securities or foreign exchange (FX) transactions, or for a number of other use cases. Now, thanks to our new service, financial institutions can benefit from full end-to-end transparency on the status of these payments, including confirmation when a payment reaches the beneficiary’s account and visibility on incoming payments.

What is the gpi financial institution transfer service? 

With the gpi financial institution transfer service, financial institutions are now able to track and trace both incoming and outgoing financial institution transfers sent over SWIFT and key non-SWIFT clearing and settlement channels. Firms also receive confirmation when the payment reaches the beneficiary’s account servicing institution and when it is credited on the beneficiary’s account.

This enables participants to identify potential exceptions, monitor their settlement and counterparty exposure in real time, and get more accurate and timely information to support their institutional intra-day liquidity forecasting and cash management.

The transparency provided by gpi is fundamental to us. With end-to-end visibility on the status of our payments, we’re able to ascertain exposures quickly and more proactively manage our risk and funding requirements.

Nicolas McMillan, UK Head of Collateral Operations and Client Services, LCH Ltd

What are the benefits of the gpi financial institution transfer service?

Real-time visibility on the status of financial institution transfers across the payment lifecycle results in substantial benefits, allowing financial institutions to:

  • Optimise liquidity management: Reduce your need for credit lines or additional cash borrowing and the risk of overdrafts. It also improves visibility on risk exposure and allows you to re-invest surplus cash. 
  • Reduce operational risk and cost: Identify exceptions early on and resolve them before the cut-off time. It also helps resolve and reduce customer enquiries, saving you time and costs.
  • Reconcile in real-time: You can reconcile your trades in real time, further improving cash management.
  • Enhance customer experience: Your customers gain improved liquidity forecasting through visibility of incoming funds as soon as the payment has been initiated by their counterparties.

Key features

The gpi financial institution transfer service brings the same level of service to MT 202s and 205s as currently exists for MT 103 customer credit transfers and cover payments. This includes:

  • End-to-end tracking: Providing visibility on a payment’s finality, even when the debtor is not the initiator of the transaction.
  • Visibility on incoming transactions: The creditor and their account servicer, or creditor agent, can see incoming transactions via an API or the Tracker GUI, enhancing liquidity forecasting.
  • Reporting of exceptions to the Tracker: Status updates like reject, not processed same day and additional information required are provided, increasing operational efficiency.
  • Unaltered references: Related references and beneficiary account numbers used across the transaction, enabling real-time reconciliation. 

How to get started with gpi financial institution transfers?

This service is optional and open to all SWIFT-connected financial institutions, whether you are already a gpi member or not.

  • Already a gpi member? The gpi financial institution transfer service leverages your existing setup; no additional subscription or provisioning is needed. You can trial the service without committing to the full rulebook until November 2021, or get started right away with full compliance and benefit from visibility of all statuses and data. Please contact your SWIFT account manager to learn more.
  • Not currently a gpi member? We have a number of options available for you as well, depending on your needs. Please contact your SWIFT account manager to learn more.

Early adopters 

A dedicated group of early adopters has co-created the solution with us, representing a range of financial institution types. 

Alfa Bank CLS Intesa Sanpaolo
Barclays CME Group J.P. Morgan
Brown Brothers Harriman Deutsche Bank LCH Ltd
Citco Gazprombank National Clearing Centre of Moscow
Citibank HSBC VTB Bank

 

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