International bank fund transfers become easier: SWIFT

International bank fund transfers become easier: SWIFT

Mumbai, May 10: With sending money into cross-border accounts set to get as efficient as domestic fund transfers, remittance companies will need to reinvent themselves according to SWIFT — the global cooperative promoted by banks to facilitate funds transfer through messaging.
SWIFT’s head of Asia-Pacific and Europe, Middle East & Africa, Alain Raes, said that the business model for remittance companies got created because of inefficiencies. He said that domestic remittances got efficient faster because they were part of a single-payment ecosystem, while the multiple jurisdictions made it more complex. But now in many jurisdictions banks were plugging in their domestic transfer platforms to cross-border and the SWIFT messaging system was getting comprehensive and carrying more details, enabling funds to move directly.
He said that already immediate account-to-account transfers are possible in several jurisdictions like China and Australia. “We are moving into discussions around Southeast Asia, Singapore, Malaysia and Indonesia that will be getting into a proof of concept soon. We are now in discussion with the European Central Bank to interconnect their real-time platform with the rest of the world,” he said.
According to Raes, remittance companies will have to find other uses for the large resources they have built up.
“There are many blue-collar workers who go to work in the Middle East and because of these innovations in the banking system, they have started to use other modes of transfer. The shift to banking is going to bring down remittance costs sharply,” said SWIFT India CEO Kiran Shetty. SWIFT is also helping banks to automate cross-border remittances by providing them with application programming interfaces (APIs) for all its products and services. “We believe that in the long term, API technology has more future than distributed ledger technology (blockchain),” said Raes.