JPMorgan Treasury Services has launched what it calls a Global Payments Infrastructure (GPI) service on an outsourcing basis. It is a modular solution that aims to enable banks to replace their existing US dollar funds transfer infrastructure with JPMorgan’s clearing components, such as Internet-based initiation and private-labelled service tools, wire processing, funds control, position management and reconciliation support.
Although direct link clearing options were previously available to JPMorgan clients, the bank says this is the first time that it has offered clearing technology and operating services as a single product set. It says two financial institutions, one international and the other domestic, are currently in the process of adopting JPMorgan’s GPI solution to enhance their USD clearing offerings to customers.
“Through our Global Payments Infrastructure solution, financial institutions can more effectively reallocate capital and resources to address their core business and growth opportunities,” explains Thomas Halpin, US dollar Clearing Business Executive for JPMorgan Treasury Services. “As the global leader in USD clearing with up to $2.3 trillion processed every day, JPMorgan is uniquely qualified to host a funds transfer technical solution that truly meets today’s challenging operating environment and commoditized payments market.”
JPMorgan says the new service offers the usual benefits of outsourcing, such as reduced unit costs (by “as much as 50 percent” it boasts); changing a fixed to variable cost structure; lower investments in operating platforms in order to comply with regulatory and market requirements; access to “industry-leading” products and services’ direct clearing membership, allowing continued visibility in the market without incurring counterparty risk; enhanced risk management; and room to generate new revenues and improve client satisfaction.
“JPMorgan’s Global Payments Infrastructure solution is built on proven technology and delivered by an experienced team with proven results,” says Halpin. “Through this offering, client financial institutions will gain access to our best in-class products, with the global scale and rigorous risk management controls that have helped JPMorgan maintain its position as the world’s largest U.S. dollar clearer.”
JPMorgan’s GPI offers two service models. Through the Application Service Provider model, JPMorgan hosts a funds transfer technology solution on behalf of a bank, while the client continues to provide the operating and/or service resources required to execute its clearing activity. With the Business Process Operating Services model, JPMorgan hosts the technology solution, as well as provides the business processing and/or servicing, including investigations, repairs and other day-to-day operations that support the client’s clearing activity.