…Swift’s Head of Sub-Saharan Africa discusses with the B&FT
Olivier Lens, Swift’s Head of Sub-Saharan Africa discusses in an exclusive interview with the Business and Financial Times on the expansion efforts in West Africa and Ghana, including collaborations with banks and payment systems, and notes that Swift and PAPSS are complementary systems.
- What is the level of adoption of Swift on the African continent, especially in West Africa?
Africa is an important region for Swift and we have been serving African customers for decades. We opened our first
African office in Johannesburg, South Africa, in 2002 and have since expanded our footprint, opening new offices in Accra, Ghana and Nairobi, Kenya to get closer to our customers. This has led to Swift payments volumes in Africa almost tripling in the past decade and Swift now serving customers in each of the 55 countries that make up the continent.
The level of adoption of Swift on the African continent is relatively high. While all countries in Africa are connected to Swift, many still rely heavily on traditional payment systems, such as cash and money transfers. However, we see an upward trend as more African countries realize the potential of Swift and its ability to enable instant and frictionless cross-border payments.
In West Africa in particular, Swift adoption rates are high. It is used for RTGS payments in many nations, as well as for cross-border payments and there are entire communities in Ghana and Nigeria that use Swift for Transaction Screening and Payment Controls.
- How developed are SWIFT’s operations in Ghana?
In 1994, Swift started operating in Ghana, with GCB Bank Plc being the first bank in the country to join our network. Since then, we have been actively working to expand our reach within the country. In March 2015, Swift opened its local office in Accra, Ghana. This office serves as the hub for the cooperative’s operations in the country and is the first of its kind in West Africa. The office is responsible for providing direct support to the banking community, helping them to connect to the global Swift network and to use its services. Swift also works with its partners in Ghana to establish and maintain a secure and efficient financial environment.
- Is there a plan to collaborate with banks and payment systems in Ghana to maintain SWIFT’s presence in the medium to long term?
Swift is partnering with Ghanaian banks and payment systems to ensure a lasting and tangible presence across the country. As an example, Swift is collaborating with the Bank of Ghana to upgrade and modernize the infrastructure for Real Time Gross Settlement and international payments. Swift is providing technical support to the Bank of Ghana to ensure the implementation of international standards and best practices. Additionally, we are exploring other potential collaborations with banks and payment systems in Ghana.
- To what extent will SWIFT compete with PAPSS, the Pan-African Payments and Settlement Systems?
Swift and PAPSS are two different payment systems, so they are not in direct competition with each other. Swift is a global payment messaging system that enables the secure and reliable exchange of financial messages between banks, while PAPSS is a regional system focusing on payments and settlements in the African market, so we see the two systems as complementary.
- What effect would the implementation of PAPSS have on SWIFT’s operations in Ghana, particularly with respect to the African Continental Free Trade Area (AfCFTA)?
Implementing PAPSS could be beneficial for Swift’s operations in Ghana, especially when it comes to the African Continental Free Trade Area. This system would facilitate cross-border payments support the African Union’s mission of forming a single market and trading bloc by making payment systems interoperable across the continent, thereby facilitating the free exchange of goods, services, and capital.
- What is the G20’s roadmap for enhancing cross-border transfers and how is Swift contributing to achieving these goals in West Africa and Ghana?
In 2020, the G20 made enhancing cross-border payments a priority, focusing on the challenges of cost, speed, access and transparency. By working to these goals, it is possible to make remittances, faster, cheaper, and more transparent and inclusive, while maintaining their safety and security. This could have widespread benefits for citizens, businesses, and economies worldwide, supporting economic growth, international trade, global development, and financial inclusion.
The payment challenges that exist across West Africa and Ghana can be addressed in part through the work of the G20 roadmap. For example, Swift’s service dedicated specifically to the low-value payments segment – Swift Go – makes sending money home a more transparent and faster process, so broadening access and fostering financial inclusion.
- How is Swift broadening access to its solutions in West Africa and Ghana, and what are the benefits of these partnerships with Amazon Web Services, Google Cloud, and Microsoft Azure?
Swift is broadening access to its solutions in West Africa and Ghana through partnerships with Amazon Web Services (AWS), Google Cloud, and Microsoft Azure. These partnerships offer a range of benefits, including enhanced security, improved scalability, and resilience, and reduced operational costs. AWS offers a wide range of services, including hosting, database and analytics, and machine learning. Google Cloud provides a suite of cloud services such as storage, analytics, and machine learning. Microsoft Azure provides a comprehensive range of cloud services, from hosting to database and analytics.
These partnerships allow Swift to provide customers with access to powerful cloud computing solutions and secure data storage, as well as enhanced security features and scalability. In addition, these partnerships provide customers with cost-effective and reliable services, allowing them to better manage their IT operations, reduce costs, and increase efficiency. Furthermore, these partnerships allow Swift to expand its presence in Africa and provide local customers with access to its services.
- What is Swift Go, and how is it providing consumers and small businesses with more choice for sending money internationally?
The low-value cross-border payments segment is growing rapidly (e.g. the global remittance market is predicted to grow by 46% by 2026). It’s also highly competitive, with new providers vying to deliver services to meet customer needs and threatening to move up the value chain to deliver other core banking services as well.
With Swift Go, financial institutions can enable their small business and retail customers to send and receive predictable, fast, highly secure, and competitively priced low-value international payments (i.e. payments below 10,000 USD/GBP/EUR) anywhere in the world, direct from their bank accounts.
When a bank signs up to Swift Go, they promise to offer transparency, best-in-class speed and to make no deductions. This ensures that consumers and SMEs receive predictable payments experience end-to-end; the sender always knows exactly how much their transfer will cost before they hit send. Swift Go payments travel over the same infrastructure and rails as SWIFT gpi, meaning banks and their customers benefit from the same security and service availability level.
- How has Swift Go improved cross-border transactions for consumers and small businesses in Ghana, and how many banks have signed up for this service so far?
Africa has the fastest population growth rate in the world, averaging 2.7 per cent per yeari, and the youngest median age. A young, urban population provides a ready market for electronic payments. In order to accommodate e-payment growth across Africa and help young entrepreneurs, it is vital that there is payment infrastructure in place to provide efficient and transparent transactions.
Currently, over 15 banks in Ghana have signed up for Swift Go and 8 of these are already live.
- What is the current adoption rate of Swift Go in West Africa?
Over 40 entities in West Africa have signed up to use the Swift Go service.
- How will the migration to ISO 20022 and the ramp-up of Swift’s transaction management capabilities benefit crossborder transactions in West Africa and Ghana in 2023?
Cross-border payments today are constrained by unstructured, incomplete, and inconsistent data. This poor-quality data, sourced from a variety of clients and disparate domestic payment schemes, is subject to interpretation and can require manual intervention and repairs before processing.
ISO 20022 creates a common language for payments, worldwide. By improving the quality and richness of data in domestic and cross-border payments, ISO 20022 will significantly help to boost operational efficiency and improve straight-through processing (STP) rates. It can help to increase transparency and visibility, leading to a reduction in risk and better adherence to compliance regulations, along with bringing improved data analytics. This makes for enhanced customer experiences through efficiency gains, along with the provision of new products and services based on a wave of innovation.
Our transaction management platform ensures interoperability between users of different data formats and connectivity channels, allowing financial institutions to take the journey to ISO 20022 migration at their own pace.
As different countries and institutions make the move to ISO 20022, Swift is acting as a facilitator to help the community understand and prepare for the migration. Key to unlocking the benefits of ISO will be scaled adoption. For West Africa and Ghana, as with all regions, this means that the full advantages of the new standard will be unlocked once jurisdictions across the world are working from the same sets of data, ‘speaking the same language’.
- What is Payment Pre-validation, and how is Swift using this service to prevent payment errors and reduce costs for the industry in Ghana and West Africa?
While most cross-border payments are processed without issue, a leading cause for those that fail or take longer to process is incorrect beneficiary information – from misspelled names to transposed account numbers. And, because they are detected late in the process, these issues can be among the most time- consuming and costly to resolve. Our Payment Pre-validation service enables banks to verify payee account details before an international payment is sent, removing a key point of friction in cross-border transactions.
Before sending a payment, banks can check the validity of the beneficiary account by comparing it against our vast library of transaction data – that’s over 9 billion payments travelling between 4 billion accounts every single year. Data is secure and centralized, meaning participants can pre-validate payments against all historical transactions – whether sending them to a long-term banking partner or a new bank on their books.
Checks are completed in real time via APIs, so pre-validating payments will only save time and reduce friction.
- What is Swift Securities View, and how is it bringing transparency to the processing of securities transactions in West Africa and Ghana?
Swift Securities View enables market participants to track securities transactions in real time, from end-to-end, throughout their lifecycle. This increased visibility enables them to quickly identify trades at risk of failing, including early detection of any discrepancies between buy-sell instructions, so they can take pre-emptive action.
Organizations and their users will be able to integrate the service via multiple channels including APIs, messaging and GUIs. Swift Securities View will leverage the Unique Transaction Identifier (UTI), which is an ISO standard that already exists in the securities industry. The UTI links messages related to the same securities settlement flow, enabling automated tracking of both sides of the transaction by all market participants involved, not unlike the tracking of a package via a postal delivery service.
- How is Swift contributing to the development of CBDCs and tokenized assets in West Africa, and what role does Swift envision for itself in this process?
Cash use is still prevalent in Africa (in sub-Saharan Africa, only 37% of women and 48% of men have a bank account, according to the World Bank), making a strong potential use case for CBDCs.
Swift is an active participant and collaborator in many CBDC projects and, although West Africa is still nascent in exploring digital currencies, many of the lessons learned from CBDC projects around the world can be applied to this developing market.
Regional integration is and will continue to be a significant driver of CBDC interoperability for all countries. Forging regional ties through integration and cooperation can eliminate obstacles to trade and make regions more competitive in the global marketplace, bringing greater economic stability and resiliency. It is also seen as a way to foster intra-Africa trade flows and attract foreign direct investment from within and beyond the continent. Swift’s focus on creating an interoperable payments infrastructure is laying the foundations for regions across Africa and beyond to develop domestic CBDCs that can work with one another.
- What is Swift doing to engage the financial community across Africa?
Growth in the use of Swift across Africa has consistently out-performed global growth – in fact Africa remains one of our fastest growing regions globally. Over the past decade, Swift payments volumes in Africa have almost tripled, we now have more than 1,100 SWIFT-connected institutions and customers in each of the 55 countries that make up the continent.
To ensure that we meet the needs of the African community, Swift works closely with Member and User groups in more than 40 countries on the continent. Additionally, Swift brings its customers together at other forums to discuss common challenges and shape solutions that benefit the entire financial community.
Once a year, Swift brings together the entire African financial community at its flagship regional event, which this year will take place in Johannesburg. Building on the decades-long success of the African regional conference, Swift Connect Africa will bring Africa’s financial community together in person again for the first time since 2019. The event is expected to attract around 600 leading financial services executives from 55 countries across Africa and beyond to do business and shape the future of Africa’s financial industry.
