The Euro Banking Association (EBA) has recently published findings from its survey on cross-border payments, exploring challenges and potential enhancements across the European payments landscape.
This survey, conducted in Q2 2024, focused on 13 cross-border payment initiatives with a European footprint, including solutions such as BIS Nexus, EBA CLEARING’s RT1 OCT Inst solution, Swift Go, and TIPS cross-currency payments.
Key areas of concern for stakeholders included transparency, cost, speed, and access, echoing the objectives set by the G20 roadmap for faster, cheaper and more inclusive cross-border payments.
Here’s a closer look at some of the report’s core insights:
Emphasis on Transparency and Customer Needs
Customer needs and transparency emerged as the top priorities. The EBA survey revealed that retail and corporate customers are most concerned with transparency, particularly the ability to monitor and trace funds in real time.
Additionally, cost considerations ranked highly for SMEs, who often struggle with hidden fees in the current cross-border payment structure.
Harmonising data standards and regulatory frameworks was identified as essential for achieving this transparency and for ensuring broad adoption across markets.
Prerequisites for Market Adoption
Survey respondents cited several prerequisites for adopting new cross-border payment solutions.
These included the support of customer needs, harmonised data standards, and a standardised regulatory framework.
The EBA’s findings suggest that banks are pushing for solutions that maximise interoperability, reduce bespoke development costs and ultimately improve reach across diverse European markets.
Potential Solutions and Contributor Initiatives
The EBA report classifies the 13 assessed initiatives into solutions and contributors.
Solutions, such as the BIS Nexus project and Swift Go, are designed to enhance processing speed and cost-effectiveness.
Meanwhile, contributors such as the ISO 20022 migration with IP+ adoption are expected to address structural issues by harmonising standards across borders.
Swift GPI, a prominent contributor, is seen as critical for improving transparency, as it enables real-time tracking of cross-border transactions, a feature highly valued by corporate clients.
Speed, Cost, Access
For banks with high transaction volumes, speed is paramount.
Solutions like the TIPS cross-currency payments initiative and EBA CLEARING’s RT1 OCT Inst are highly regarded for their potential to streamline settlement processes.
On the cost front, respondents acknowledged the value of initiatives like the OCT Inst scheme and Swift GPI, which are anticipated to lower operational costs and offer clear savings for both banks and end-users.
Outlook and Challenges
Looking forward, the EBA survey underscores the importance of continued collaboration among financial institutions, regulators, and technology providers.
Achieving the G20’s 2027 deadline for a seamless cross-border payment framework will require considerable progress, particularly in areas such as transparency and cost reduction.
With initiatives like the Swift Transaction Manager and EPC OCT Inst Scheme paving the way, the EBA’s findings highlight that significant strides have been made – but also that substantial work remains.
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