How Can Investing in SWIFT Compliance Give Your Bank a Competitive Advantage?

In the banking industry, the Society for Worldwide Interbank Financial Telecommunication standard, or SWIFT, is the de facto standard for financial messaging. More than 11,000 financial institutions in 200 countries rely on the SWIFT system for the messaging protocols that accompany cross-border financial transactions. After almost 50 years in usage, SWIFT has become synonymous with security, expansive IT infrastructure, systematized data flow, and integrity when held up against threats of financial crime.

Banks can join the SWIFT network by registering for their own unique bank code, which will be used in all succeeding financial transactions involving SWIFT messages. The process of registering for a code and becoming SWIFT compliant was initially thought to be expensive and tedious, but modern payment processing solutions have since streamlined the process and made SWIFT membership a more attractive prospect for banks. 

What should you know about SWIFT compliance that could affect your bank? Moreover, why should you consider investing in a payment processing solution with a built-in SWIFT service? To answer those questions, we present this short backgrounder on SWIFT integration, compliance with SWIFT Global Payments Innovation (gpi), and the resulting competitive advantage that SWIFT can impart on your organization. 

Why Should Banks Pay Attention to SWIFT Compliance?

To put it simply, banks should pay attention to developments in the SWIFT network because its newest standard, the SWIFT gpi, is quickly becoming the go-to financial messaging standard for corporate customers. For many banks, corporate accounts are responsible for the lion’s share of revenues.

In order to keep the lucrative business of their corporate customers, banking executives need to understand what the latter’s needs are in the present moment. There’s no denying that global expansion and trade with international partners may be among those needs.

The SWIFT gpi framework promises additional speed, transparency, security, and reliability for businesses transacting with each other from different parts of the globe. As potential conduits for these high-value transactions, banks are in a good position to integrate SWIFT technology into their systems and become compliant with SWIFT’s requirements.

It may be in your own bank’s best interests to invest in the application process and to upgrade your current tech stack for better compliance to financial data security standards. On top of complying with SWIFT gpi’s universal payment confirmation standard, which requires your bank to confirm a credited payment after receiving MT 103 messages, your bank should also aim to comply with the related ISO 20022 standard, which relates to keeping payment data of higher quality.

Adopting these standards and working to improve your compliance technology can do more for your bank than simply resolving its regulatory woes. The investment may also result in a competitive advantage against other banks, as well as alternative players like fintechs. 

How Will SWIFT Compliance Add Value to Your Bank?

There are four potential benefits to investing in SWIFT compliance and in technology with SWIFT support:

It Will Decrease Friction in Your Customers’ Cross-Border Payments

The most compelling reason to invest in SWIFT-compliant and SWIFT-supportive technology pertains to the payment experience of your corporate customers. If your bank is a reliable conduit for SWIFT messaging, then your corporate customers will enjoy less friction and more transparency in their SWIFT payments. That, in turn, could make them more loyal to your bank for high-value transactions.

It Will Attract New SME Clients to Your Bank’s System

Becoming SWIFT-compliant and offering SWIFT services to corporate customers may also widen your current reach in the market. Your bank will have the chance to score new business especially among small and medium-sized enterprises (SMEs) that are looking to break out in the global scene.

It Will Make Your Bank a Viable Alternative to Other Cross-Border Payment Providers

Competition for high-value corporate banking services is admittedly very fierce in today’s environment. It isn’t only traditional banks that your institution has to contend with; you’re also up against so-called digital banks, fintech platforms, and other alternative providers that offer cross-border payment services. But your adoption of the latest SWIFT standard could distinguish you among your competitors and lead enterprises to choose you for their business-critical activities. If you can promise them fast, consistent, and secure international payments through SWIFT, they might just become your partners for the long haul. 

It Will Increase Regulatory Trust in Your Banking Brand

Lastly, it isn’t only your corporate customers that you want to leave a good impression on. You’ll also want to cultivate a reputation of trustworthiness and versatility among your regulators. Put your best foot forward when dealing with stakeholders in your bank’s SWIFT and ISO 20022 compliance, and your bank will earn a favorable legacy among regulators and stakeholders within the industry.

Final Words

Your corporate customers are looking for a banking provider that they can entrust with their growth. By making SWIFT a permanent part of your bank’s ecosystem, you can satisfy their needs to bring their business abroad and to document each high-value transaction according to a reputable standard. Explore new payment processing solutions today, and become your corporate customers’ go-to banking provider for SWIFT payments.