Earlier this year, a group of banks successfully tested SWIFTs service for workers remittances designed to enable fast, efficient and cost-effective international person-to-person payments.
Financial institutions indeed see the workers remittances market as a rich source of new customers and revenue. Traditional correspondent banking arrangements, however, have not delivered the price and time transparency or ease of use that customers expect, while proprietary services are difficult to scale across multiple countries and counterparts.
SWIFTs new service solves these problems by providing a framework onto which banks can develop their workers remittance service. The framework consists of contract templates, a market practice for service levels and product definitions, reference data services, ISO 20022 standards and a cost-effective messaging service.
Using SWIFTs service, banks can now deliver a robust value proposition to their customers. The common market practice allows banks to provide cost and time transparency to customers. Contract templates, reference data and XML standards enable banks to use any payment product at both ends of the transaction in an efficient way, thus saving cost and reducing time to set up new counterparts. Finally, the service is commercially neutral, giving banks total flexibility in consumer branding, pricing and foreign exchange for these payments.
SWIFT delivered an excellent set of tools to make the service easy to understand and use for both business and technical users in financial institutions, comments Arthur Cousins, Standard Bank of South Africa who led an advisory group that defined the service requirements.
Banks will find this service attractive as it provides a cost-efficient framework between banks while allowing innovation and competition in the retail space, adds Luc Meurant, Head of Banking Markets at SWIFT.
D.C.