SWIFT’s Julien Blanchez, Head of Data and Analytics, looks at the central role of data in supporting the move to real-time payments.
Innovations in payments, both domestic and international, have developed at great pace in recent years, driving remarkable changes.
Goods and services are moving more quickly, more frequently and across greater distances than ever before. To support this acceleration, value needs to shift further, faster and with greater transparency. The less friction in the transfer, the better.
Whilst there is a clear demand for faster, easier payments, they must also be safe, secure and compliant. This is where data plays a pivotal role. The quality of data and the way organisations use it, is paramount to reducing friction in payments
Enabling faster payments with smart data
Today, a large majority of international payments are processed straight through, requiring no manual intervention. However, the small proportion of payments that require manual processing often do so due to incomplete or inaccurate data relating to the end beneficiary. The ensuing enquiries and delays can take a disproportionate amount of time and resource to resolve.
SWIFT is working to eliminate these to provide a better customer experience by providing the financial community with smarter tools that improve the quality of the underlying data.
By providing full end-to-end tracking across the payment chain, we are enabling financial institutions to identify the underlying causes of errors and to take action to remedy them with other banks in the chain.
Our pre-validation and case resolution tools help banks avoid delays by ensuring the requisite payment data is correct and complete before the payment is sent, or quickly resolved when, for example, a payment is held up due to missing regulatory and compliance information.
Improving the quality of the data enables the industry to extract value more easily from Artificial Intelligence (AI) tools, further driving automation and preventing illicit use of the global financial system. This is already taking shape in the compliance space, for example, where advanced data analytics capabilities are enabling banks to improve their screening algorithms and reduce the number of false positives when trying to detect fraud.
More data, more structure, richer insights
International payments often contain unstructured and ambiguous beneficiary account data, causing unnecessary delays and delayed processing. To remedy this, we need to capture richer data in a more structured way.
This transformation is already ongoing, with the widespread adoption of ISO 20022 across major market infrastructures around the world and the industry-wide move to the new standard within the payments space.
ISO 20022 provides rich and structured data that is suited to the needs of regulators, market overseers and reporting firms that rely on unambiguous data for meaningful analysis.
Increased use of mandatory and structured data will further enable automation of reconcilia- tion processes and greatly improve visibility of cash positions for beneficiaries.
The standard also provides a common data dictionary, agnostic of syntax and technology choice. This will support new services through the use of APIs, and provide quality data for the application of artificial intelligence, enabling banks to offer innovative services to meet their clients’ changing needs.
Improving data quality is essential for the scaled deployment of AI in financial services. The adoption of ISO 20022 will continue the ongoing transformation of correspondent banking, and will usher in a revolution in international payments.
Leveraging our collective intelligence
Unlocking the potential of data is not easy. Even less so in the financial sector. That’s why some challenges will be best overcome through collaboration or by the community acting as a whole. SWIFT, together with its community, is working on new data capabilities to utilise the collective intelligence of our data. This includes embedding identification schemes into payment flows and exploring new ways to enrich and blend our respective data.
We believe realising the full potential of our common data is the best way to help the banking community evolve in the fast changing world of financial services.