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?

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?

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?

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.

CEO of the international payment system LEO, the shareholder of IBOX Bank

CEO of the international payment system LEO, the shareholder of IBOX Bank