Transforming cross-border payments with new technologies
In developing its third phase of services, SWIFT gpi is exploring the potential of using new technologies such as distributed ledger technology and blockchain, in the cross-border payments process.
SWIFT gpi DLT Proof of Concept (PoC) for Nostro Reconciliation
Under the current correspondent banking model, banks need to monitor the funds in their overseas accounts via debit and credit updates and end-of-day statements. The maintenance and operational work involved represents a significant portion of the cost of making cross-border payments.
As part of the technology evaluation in the SWIFT gpi roadmap, SWIFT launched a Proof of Concept (PoC) in 2017, to test distributed ledger technology (DLT) and determine if this new technology can be applied to reconcile banks’ nostro accounts more efficiently and in real time, lowering costs and operational risk. While DLTs are currently not mature enough for broad use on cross-border payments, this technology may provide solutions for the associated account reconciliation.
SWIFT will leverage its key assets to bring the technology in line with the financial industry’s requirements, including strong governance, PKI security scheme, BIC identify framework and liquidity standards expertise, with the goal to deliver a distinctive DLT PoC platform for the benefit of its community.
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Exploring new technologies
SWIFT gpi is exploring the potential of using new technologies such as distributed ledger technology and blockchain, in the cross-border payments process.
A Distributed Ledger Technology Proof of Concept
The gpi DLT PoC is exploring if banks could use DLT to improve the reconciliation of their nostro databases in real time in order to optimise their global liquidity.
Leveraging SWIFT’s key assets
SWIFT will leverage its strong governance, PKI security scheme, BIC legal identifier framework and liquidity standards expertise to deliver a distinctive DLT PoC platform for the benefit of its community.