Societe Generale: What’s next on the wish list of the corporate treasurer for global payments innovation?

Published 

By Aurélien Viry, Global Head of Payments and Cash Management at Societe Generale and Benoît Desserre, Head of Global Transaction Banking at Societe Generale

“GPI is a legitimate response from the banking industry to the problems corporate treasurers face in making global payments, namely timing, transparency and traceability”
Aurélien Viry, Global Head of Payments and Cash Management at Societe Generale

“What we see with GPI today is only the beginning. A further development of GPI could be the ability to recall payment transactions. At present, the recall of an incorrect transaction is time-consuming, inefficient and costly. Going forward, the GPI banks could collectively develop agreements for recall procedures that are fast and efficient.”
Benoît Desserre, Head of Global Transaction Banking at Societe Generale

  • The SWIFT global payments innovation (GPI) service aims to respond to an increased demand from treasurers for speed, transparency and traceability in cross-border payments. Is the proposed service going far enough or is this just the beginning of a much longer journey? Which other pain points need to be tackled and how are banks responding?
  • When the global payments innovation initiative becomes a reality for corporates, there will be a push for further innovation in global payments. GPI is all about timing, transparency and efficiency. We are at the beginning of a journey, which may lead to many new capabilities and a change in the way banks charge their clients for global payments.GPI is a legitimate response from the banking industry to the problems corporate treasurers face in making global payments, namely timing, transparency and traceability. In the past, treasury departments would make payments but didn’t know when a payment would reach the counterparty.
  • GPI puts a time limit on that, with banks committed to ensure payment arrives within two hours. Going forward, it is likely to be less than two hours and may even evolve into instant payment. Transparency is addressed by GPI banks committing to inform treasurers of the fees that will be attached to any cross-border payment. This is a breakthrough as correspondent banking has a complex pricing structure, which depends on several factors. Often it is not clear which party to a transaction is imposing a fee, which can damage a bank’s relationship with its corporate client. Finally, traceability will enable corporates to discover where a payment is at any time and who is handling it. This is particularly useful if a client wishes to place another order for goods – knowing where the incoming payment from the receiver is will give the supplier more confidence to fulfil the subsequent order.
  • A further development of GPI could be the ability to recall payment transactions. At present, the recall of an incorrect transaction is time-consuming, inefficient and costly. Going forward, the GPI banks could collectively develop agreements for recall procedures that are fast and efficient.
  • The success of GPI will rest on getting the involvement of the key correspondent banks globally. Unless such participation is achieved, the traceability element of GPI will suffer. It is a sensitive issue for some correspondent banks, however. By participating in GPI, banks will to a certain extent reveal how much margin they make on correspondent banking. There are also technical issues. Some correspondent banks still process SWIFT payments manually and will be unable to commit to the two-hour time window in their service level agreements, let alone any shorter period. Participation in GPI for these banks will require significant investments in tools and systems.
  • GPI has been developed at a time when corporate clients are demanding more sophisticated cash management services. Because the charging arrangements in cash management are complex, we may see the emergence of different pricing models for GPI. Some banks may offer GPI services for free, but other services will attract a charge. The pricing will depend on the type of client and the business it does with the bank. Given the capabilities GPI will deliver, it is likely that many corporate clients will pay for this new service as it addresses so many problems associated with global payments.

 

Follow Societe Generale’s latest SIBOS news and expert views on their dedicated website.

 

Most recent episodes

40th Annual New York Cash Exchange: What Can Treasurers Expect?

Ahead of the 40th annual New York Cash Exchange, two of TMANY’s distinguished board members, David Miller and Timothy T. Hesler, CTP, provide TMI CEO, Robin Page, with a quickfire rundown of what attendees can expect from this year’s conference. Our guests share their aspirations for the event,...

00:00

Expectation-Beating Inflation Prints Ratchet Up Pressure on Monetary Policy

Welcome to the third edition of Liquidity Link Live, your exclusive market analysis provided by Northern Trust Asset Management, one of the world’s largest cash managers. Tune in each month to discover the very latest insights on the UK, Eurozone and US markets. This edition was recorded on the 9th May...

04:48

Making the Sustainable Transition: A Roadmap to ESG in Treasury

Over the last 18 months, Societe Generale has experienced a steady increase in requests from their corporate clients to integrate ESG features in treasury management.  Louis-David Rouyer, Philippe Pougeard, and Emmanuelle Petelle (Societe Generale) provide TMI’s Eleanor Hill with a whistlestop run...

22:24

Lift Off for Fed Rate Rises

Welcome to the latest edition of Liquidity Link Live, your exclusive market analysis provided by Northern Trust Asset Management, one of the world’s largest cash managers. Tune in each month to discover the very latest insights on the UK, Eurozone and US markets. This edition was recorded on the 5th of...

04:58

Treasury in 2022 and Beyond

Industry experts Bob Stark (Kyriba) and Sebastian di Paola (PwC) join TMI’s Editor, Eleanor Hill, to explore the very latest treasury trends – and to discuss how smart treasurers can get ahead of the game by ...

43:21

How BearingPoint Harnessed Data-Driven Forecasting with CashAnalytics and SAP

Listen back to our recent forecasting masterclass, where Group Treasurer Eveline Stam, and Conor Deegan (CashAnalytics) provided TMI’s Eleanor Hill with a comprehensive overview of how consultancy firm BearingPoint achieved company-wide cash forecasting nirvana by combining specialist solutions from...

37:14

The 3 T’s of The Future: Tech, Treasury, and Transformation

Over the past two years, an increasingly dynamic environment has not only accelerated technology development – from quantum computing to blockchain technology, and even the metaverse – but also technology adoption, bridging colleagues and breaking down silos in a remote work world. In this podcast,...

44:02

Monetary Policy Continues to Drive Markets as Ukraine Invasion Weighs on March Meetings

Welcome to the second edition of Liquidity Link Live, your exclusive market analysis provided by Northern Trust Asset Management, one of the world’s largest cash managers. Tune in each month to discover the very latest insights on the UK, Eurozone and US markets. This edition was recorded on the 3rd of...

05:25

Tax Spotlight: How the OECD’s Two-Pillar Solution Impacts Treasury

Aaron Lee and Joseph Lee (DBS Bank) join TMI’s Eleanor Hill to discuss how the OECD’s Two-Pillar Solution aims to address the tax challenges arising from the digitalisation of the economy. Ahead of the 2023 implementation date multinational corporates will have much to consider around these reforms....

24:00

FX Connections: Bringing Transparency to Cross-Currency Payments

Cross-border activity is growing at a remarkable rate, making FX payments a hot topic for treasurers across the globe.  In this TreasuryCast episode, Eleanor Hill asks Daniela Eder and Gibran Maqsood (Barclays Corporate Banking) to provide their key action points around FX payments in 2022. Our guests...

21:00