Cross-border payments: Technological innovation and interoperability to improve client experience
The lines are moving in the world of cross-border payments; last September, Citigroup announced that it had completed a tokenized payment transaction between shipping giant Maersk and a channel authority. The beginning of a new era? And yet, does the image of openness and “decentralised” use, associated with cryptos, not contradict client expectations in this area, centred on the values of discretion, security and control?
To be sure, tokenization is not easy to implement, as it has a profound impact on the global financial system. But it could be a next big milestone in improving cross-border payments. For many years, Societe Generale’s correspondent banking department has been at the forefront of payment innovation for cross-border transfers. As a stakeholder and contributor to major changes in the sector, it is committed to improving its clients’ experience to guarantee them security, speed and transparency. To understand these challenges, take a look at the latest major developments in the sector.
Swift GPI (Global Payment Innovation): the great leap forward
In 2016, Swift, a financial cooperative, launched Swift GPI with the aim of improving four key aspects of cross-border payments: speed, traceability, transparency and security. This has greatly improved the client experience in this area. Since then, more than $300 billion has been traded daily via GPI in 150 different currencies and between more than 4000 financial institutions. Societe Generale was one of the first institutions to adopt GPI and quickly provided its clients with features such as the GPI tracker, which enables real-time payment tracking. Societe Generale is now actively involved in the development of value-added services such as pre-validation, case resolution and stop and recall, built on the initial GPI layer.
Operation simplification with Swift Go
In addition, Swift has launched an initiative, Swift Go, to improve the processing of low-value cross-border payments. This initiative has become necessary in recent years due to the growing demand for faster and more efficient money transfer services. Swift Go offers a solution to this demand by promoting a new standard for the transfer of low-value payments. This solution is closely linked to Swift GPI and ensures a transparent client experience through predictable processing fees and transparent end-to-end FX transactions. Societe Generale group, which owns retail banks in Africa and Eastern Europe, was among the first banks to participate in the Swift Go working groups.
Even more simultaneity with Immediate Cross-Border Payments (IXB)
The IXB initiative is a joint project of The Clearing House, EBA Clearing and Swift. It aims to connect two instant payment systems, RTP in USD and RT1 in EUR, across the Atlantic, to facilitate and support payments in one of the world’s largest financial corridors.
Societe Generale was one of the first members involved in this initiative and immediately understood the immense potential of IXB. A similar principle has already been proven in Asia with the PromptPay-PayNow connection in Thailand and Singapore and the recent UPI-PayNow linkage in India and Singapore.
Working with ProsperUs, preparing, and anticipating a next step towards digital assets?
Societe Generale is constantly improving its clients’ experience in cross-border payments, without compromising the security of assets. To do this, the Group approached ProsperUs during the first edition of P&T BAX: Payment & Transaction Banking Accelerator. Indeed, ProsperUs’ expertise in the issuance, clearing and settlement of tokenised assets, applied inter alia with the Banque de France, has made it possible to facilitate a transfer of funds between banks in France and Tunisia via central bank digital currencies.
In addition to cross-border payments, the collaboration between Societe Generale and ProsperUs aims to better understand how to improve interoperability between the on-chain and off-chain universes for different digital and digitised assets, ensuring smoother and more secure transactions.
All in all, as this brief retrospective clearly shows, technological innovation and interoperability are the two vectors for speeding up cross-border payments, mitigating risk and increasing transparency. In the current context, where client expectations are high and instantaneous information sharing is the order of the day, it is natural to wonder whether digital currencies will soon be an integral part of this world of payments. Automating certain conditions, saving time, traceability, 24-hour availability and reducing transaction costs…, will this also guarantee discretion, security and control? Societe Generale is carefully studying these future developments in order to offer its clients the best possible service.