
Share this post
Swift drives global interoperability and innovation, aligning with the UK’s National Payments Vision to enhance seamless, secure payments.
The UK’s payments landscape is at an inflexion point. The recently published National Payments Vision sets a forward-looking strategy, outlining priorities such as enhancing the regulatory framework, advancing Open Banking, combating fraud, and building a world-leading payments infrastructure with cross-border interoperability. Adam Bealey, Swift’s Head of UK & Ireland, discusses how the cooperative connects and enhances the international payments ecosystem, driving innovation and helping advance the UK’s strategic priorities for the payments industry.
The UK’s roadmap to faster, more efficient payments
A key area of focus outlined in the National Payments Vision is enabling interoperability between domestic and international systems, supported by the adoption of ISO 20022 messaging standards while ensuring the security of the UK’s payment systems.
The UK government’s preferred approach is to upgrade the UK’s Faster Payments System (FPS) while assessing the longer-term requirements for the UK’s retail payments infrastructure. With Swift’s global network of over 11,500 members and our ongoing role as an industry convenor around standards like ISO 20022, we are uniquely positioned to support seamless interoperability between an upgraded FPS and cross-border transactions.
Integrating Swift with the upgraded FPS would enable a unique reference to be embedded within each transaction, delivering end-to-end tracking across both cross-border (Swift) and domestic payment flows. This added transparency would bring cross-border functionality to domestic instant payments, aligning with the G20’s roadmap and providing end users with a payments experience that is fast and secure.
Swift has already demonstrated that it can do this in an international context, collaborating in July 2023 with Lloyds, Iberpay and international banks from Spain, Latin America and Australasia – successfully demonstrating instant cross-border payments as part of the European Payment Council’s One-Leg-Out Instant Credit Transfer scheme (OCT Inst). This is an example of how the scale of the Swift network can be leveraged to interoperate market infrastructures to enhance the user experience. The project saw a payment message’s unique reference being carried end-to-end across both domestic legs and the ‘Swift leg’ provided by Swift GPI. The result is an improved customer experience.
Meeting and exceeding the G20’s targets
The introduction of Swift GPI raised the bar for cross-border payments, setting a new benchmark for speed, end-to-end transparency, and reliability. Since its launch seven years ago, it remains the industry’s gold standard for fast, frictionless payments that are traceable – much like a package out for delivery – underwritten by the highest levels of security for which Swift is known. During the Covid-19 pandemic, Swift GPI proved indispensable, accelerating the delivery of critical medical supplies by providing suppliers with real-time visibility of incoming payments, complete with all necessary details, giving them the confidence to ship goods before the funds had settled.
Today, Swift GPI continues to elevate cross-border payments, aligning closely with the G20’s roadmap that focuses on enhancing speed, cost, transparency, and choice. Swift’s dedication to instant, frictionless payments already exceeds these goals: 90% of payments on the Swift network now reach the recipient bank within an hour, far surpassing the G20’s 2027 target of 75% settling in the beneficiary account within that timeframe. Additionally, 86% of all Swift payments occur directly between two institutions or involve just one intermediary, minimising friction and enhancing efficiency.
Now, the UK is primed to take the evolution of its payments infrastructure even further. However, a commitment to shared standards will be crucial to do so.
ISO 20022: ushering in a new era of payment efficiency
While significant progress has been made to improve the speed of international transactions, the industry still has work to make cross-border payments instant and frictionless. This applies to all jurisdictions, with the UK’s National Payments Vision referring to the benefits offered by ISO 200022.
The richer, more structured data promised by ISO 20022 represents a significant leap forward, increasing straight-through processing and providing a foundation for future innovation. Not only this, but it uplifts the payments experience for market participants by improving operational efficiency, data analytics and compliance, as well as opening up avenues for more tailored end-customer experiences. By offering more detailed and accurate information, ISO 20022 enables better transaction management and reduces friction in the payment process, preventing false compliance alerts, enabling timely payment processing and reducing manual handling costs for banks.
That’s why scalable adoption of ISO 20022 within payments is critical to meeting the G20’s targets and underpinning the smooth flow of global trade.
Collaboration for an interoperable ecosystem
With instant payment systems continuing to proliferate, it is essential to achieve interoperability between these various systems so that they can operate and support innovation in a global context.
Swift uses its Payment Pre-validation service to connect different Verification of Payee (VoP) schemes. While banks within the Eurozone are focused on this to comply with the EU’s Instant Payment Regulation, we envisage taking VoP beyond Europe, providing peace of mind to individuals and businesses sending money internationally from the UK and other markets with domestic VoP schemes.
To date, Swift has enabled European VoP providers from France, Italy and the Netherlands to expand their reach across borders. By addressing interoperability challenges, we are ensuring global transactions remain swift and seamless and empowering our community to comply efficiently with international and local regulations while using their existing Swift infrastructure. By exposing our best-in-class services, such as Pre-validation and payment tracking through our APIs, institutions can seamlessly integrate these capabilities into their customer channels, driving efficiency and trust globally.
Resilience at the core
Resilience is the cornerstone of progress in enhancing payments, as highlighted in the National Payments Vision: “strengthening the foundations.” At Swift, resilience and security are embedded in our DNA. Operational excellence is our license to operate – with the global financial community putting their trust in us every day, the resilience and security of our network is (and has always been) our number one priority. We’re known for holding ourselves to the highest standards of security, reliability and resiliency and see doing so as an essential component of what we do.
We are also committed to empowering our community with cutting-edge defences against industry-wide challenges, including the ever-growing fraud issue.
Authorised Push Payment fraud, identified as a critical concern in the National Payments Vision, is a pressing example. Tackling such challenges requires industry-wide collaboration, and Swift has been playing a leading role in exploring how data collaboration can provide a proactive defence against fraud. Since February, Swift has been driving an industry pilot group of global financial institutions to explore how federated learning, paired with confidential computing technologies, can enable participants to share valuable insights while safeguarding proprietary data.
As a trusted partner at the heart of the financial ecosystem, Swift is uniquely positioned to unite the global community in addressing systemic fraud. Building on the strong foundations emphasised in the National Payments Vision, we are paving the way for innovation and new technologies to thrive in a secure and resilient environment.
Primed for a digital economy
New technologies and innovations continue to reshape the payments landscape, redefining money as we know it and bringing new ways of exchanging value. We must prioritise interoperability when innovating to ensure these advancements evolve sustainably and enhance global connectivity.
Swift has, over the past few years, convened more than 40 central and commercial banks and financial institutions from across the world to collaboratively explore how we can provide the critical interoperability between new and existing forms of value and the various networks, systems and technologies that are emerging in light of new innovations. Our previous experiments have shown that Swift’s interlinking capabilities can connect CBDC platforms with existing systems as well as with each other. This year, we are taking our experiments from a sandbox environment to real-world transactions in controlled trials that will see central and commercial banks transact in digital assets and currencies seamlessly through the single window of the Swift network.
Moving forward, we’ll continue to work closely with the financial community to advance use cases for our interlinking capabilities across CBDCs and tokenised assets so that value can instantly and frictionlessly across borders in whatever form it takes.
Looking ahead: a new frontier for cross-border payments
Payments are fundamental to achieving economic growth. The National Payments Vision outlines an ambitious path forward, but its success lies in building on key pillars: resilience, collaboration, and interoperability. By strengthening these foundations, the UK payments industry can thrive domestically and maintain its leadership on the global financial stage.
Learn more about Swift