Swift to expand its gpi into securities and FX transactions
Swift’s head of securities Juliette Kennel has revealed Swift’s gpi will be expanding into securities, foreign exchange (FX) and derivatives transactions once the firm has seen more widespread uptake in the market.
“Currently, its scope is cash payments. However, as the service is adopted by the industry, it will be expanded to include securities, derivatives and foreign exchange (FX) transactions as well,” says Kennel.
She predicts that this holistic approach is the inevitable outcome for the rest of the world too. As the value created by gpi grows exponentially, helping for example enhanced risk and liquidity managers deliver high value payments with transparency, the gpi offering will evolve “from its origins in payments to encompass the other half of every securities, derivatives and fund transaction”.
Looking ahead, Kennel envisions a world where there is no “chain that relies on each intermediary reconciling the details of the transaction with their own records”. Instead, she thinks gpi “could supplant the present methods of post-trade information processing altogether”.
Historically, companies had little, if any, information on the status of a payment once it was released. Until it arrived, there was no way of knowing whether it had reached the beneficiary, what fees and charges were deducted, or whether the payment was altered along the way.
Kennel dubs this old post-trade process as a “major source of inefficiency”, pointing ahead to how, on average, 40% of Swift gpi payments are credited to end beneficiaries within five minutes and almost all within 24 hours.