Cross-border payments now take minutes instead of days – the age of payments in real time is almost here
Digital interfaces for foreign exchange trading are making the entire cross-border payment process real time, boosting transparency and cost-efficiency as well as speed.
Digital systems and solutions have been used in forex trading since the turn of the millennium. Data transfer speeds have risen multifold and data transfer volumes have grown hugely in the same period. This stunning transformation is lifting the bar for cross-border payment and forex trading products in the new era.
“Customers expect and demand new-generation processes that meet current levels of speed, quality and reliability.”
This is how Business Lead Jarmo Koukonen of OP Corporate Bank describes this healthy competitive pressure. He points out that foreign exchange trading is wholly reliant on business activity in the real economy. Payment systems are under rapid development, which is having a direct impact on forex trading.
“Real-time payment is a hot topic and a major driver of process development. This throws down the gauntlet for forex trading — payments need to be real time.”
OP Financial Group has taken up this sectoral challenge with brio. The result is ready-made solutions for fast cross-border payments in forex trading.
“We can offer new, real-time digital interface solutions for real-time cross-border payment processes.”
SWIFT GPI takes payment lead times to a new level
Cross-border payment processes have been hampered by a range of bottlenecks and time lags. Not long ago, a payment from Finland to Sweden or Canada could take a day or two to go through. A major step forward was taken with last year’s introduction of the SEPA express transfer service.
“The SWIFT GPI service took payment lead times to a completely new level: at best, we are now talking about a throughput time of a few dozen minutes.”
The aim is become even faster — the next step will introduce real-time payment, with regular lead times of just a few seconds. In foreign exchange trading, the leap to the next level is already possible. We can now look forward to the same capabilities in payment and the overall process.
“This will become possible in the next few years — initiatives are underway, such as the P27 project to introduce real-time payments between the Nordic countries.”
A faster overall payment process will undoubtedly be one of the benefits of digitalisation. Koukonen attaches the same importance to transparency and cost savings.
“The customer will be able to track a payment in real time. Costs will fall markedly, by dozens of per cent. The beneficial effects on processes are also worth noting.”
Koukonen highlights the benefits of a fully electronic system — featuring only minor operational risks and enjoying strong trust — for the overall payment process.
SMEs will benefit from digitalisation of forex trading and hedging
Forex trading and hedging have been beneficiaries of digitalisation for years. For example, automation and robotics are used to obtain exchange rate updates several times a day. In addition to the development of real-time payment, Koukonen predicts major leaps forward in forex hedging.
“A new development step lies in the use of different types of simulation and the realisation of hedging policies on an automated basis. This will provide SMEs with the benefits enjoyed by large companies. We can already provide our customers with pioneering solutions in this field.”
Making platforms, systems and simulators available to more and more companies will lower prices for each customer and generate major benefits for their overall processes.
Make your company’s continuous foreign exchange trading easy with OP FX Manager.