Wise vs SWIFT & Correspondent Banking
Former Market Infrastructure Executive at Swift
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Wise vs SWIFT & Correspondent Banking(October 21, 2024)
Former Market Infrastructure Executive at Swift
Interview Transcript
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Why was GPI a success and SwiftGo was not? I think I'm reading between the lines, but it sounds like Go was not a success not because banks didn't adopt it, but because it wasn't in Swift's interest.
GPI was developed by Swift to respond on behalf of banks to Wise. It plays to Swift's sweet spot, the cross border payments, which are predominantly high value, but it's not just that. The payment route GPI created enabled for the first time, end to end tracking and visibility. The banks involved in the GPI chain had to commit to sending the money on as soon as they received it. SLAs were in play and introduced, and they could no longer sit on the funds, which they happily would have done. I was a correspondent banker many decades ago and I know they would sit on the cash. There was no SLA and they had no desire or need or requirement to track the payments.
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What is that organization? I've read about it, and it seems like a global task force. I thought they had a project, maybe related to CBDCs. I can't recall exactly.
Let's discuss the pain points, specifically the major ones. Traditionally, banks are not 24/7, but they must be for instant payments to meet service level agreements. For domestic instant payment systems, they must operate 24/7, 365 days a year. However, cross-border payments introduce complexity. Their back-office operations aren't 24/7, 365. That's the first issue.
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