Oschadbank was the first bank in Ukraine to connect to SWIFT gpi — this shows how actively they’re developing themselves
Yesterday, the press service of the Oschadbank State Ukrainian Bank reported about joining to the SWIFT global payments innovation system. The new global technology will make the procedure of cross-border money transfers significantly more convenient for Ukrainian customers. What does this mean, how does the issue of international money transfers work and how relevant is it?
How does the SWIFT system work?
An abbreviation SWIFT gpi means «Society for Worldwide Interbank Financial Telecommunications» and one of the most striking examples of the desire of the civilized world to active globalization and mutual integration of economies.
The mechanism was created in the early 1970s on the initiative of 248 the largest institutions from top-19 most developed countries. Each financial institution has its own unique code, which serves as a way to identify the recipient and the sender. Now it’s a global network, in which already registered more than 10,000 financial organizations, and the simplicity of the transfer in Europe was reduced to entering the name and IBAN-code of the beneficiary’s account — it already has an interpreted SWIFT-code by default.
If we can skip formal details, the emergence of this “society” fundamentally changed the idea of financial transactions dynamics and significantly influenced on the active development of transnational companies. SWIFT payments made the economies of countries closer, and political boundaries — less important. That’s disconnecting from this system is equivalent to a collapse of the economy in the medium and even short term for any civilized country
It’s all about international payments for goods and services, trade operations of different countries, clearing payments, etc. To understand the importance of this system, it’s enough to look at the figures: there are more than 1 million per day in SWIFT with a $6 trillion turnover. Impressive statistics?
What is the advantage of SWIFT gpi?
The simplest explanation is that the new service allows you to significantly accelerate the receipt of funds. Customers of Oschadbank gained an advantage in speed and transparency. But most importantly, you can monitor the transaction online.
To do this, you use the gpi Tracker app. Before this your partner had to wait up to 3 banking days to receive money. With a new instrument the situation changes radically. About half of the payments are credited for half an hour, and the rest — within 24 hours.
The Press Service of Oschadbank is leading official statistics on the use of the new service. It has already connected over 180 banks and NFUs worldwide. They generate a daily turnover of $ 100 billion on 450 international payment tunnels.
Why Oschadbank was the first gpi connected to SWIFT?
There are several reasons for this, but they all go into the essence and principles of the financial institution. Firstly, “Oschad” is a sphere-forming state Ukrainian bank with the largest network of offline banking centers, the second by assets, with a rich history, etc. This is a really powerful background, which all foreign partners pay attention to. A good example is cooperation between AliExpress and Ukrposhta. Due to the nature of China’ economy, the country prefers to work with state monopolies with history and prestige.
Secondly, like “Ukrposhta”, “Oschad” had a powerful rebranding, a new management and a push towards innovative development. This is the innovation policy. Thanks to this the state bank, which was engaged in receiving utility bills from the older generation, integrated Android Pay, participates in the creation of cashless zones at festivals etc. This state institute has changed radically — and although there are still a lot of work on the service, their technical and human resources allow them to integrate projects like the new version of Swift.
Third, and this is a key point — after the decisive reforms from National Bank of Ukraine Ukrainian banks must be profitable instead of constantly receiving subsidies. And in order to make a profit, it is crucial for them to constantly develop themselves. For example, SWIFT gpi easily solves the problems potentially arising from cross-border payments: app users have the ability to check the information on any of the banks in the transaction path — this also includes the intended commissions at all stages. The availability of such tools is the real economic EU-integration of Ukraine.