Addressing fragmentation: The key to achieving G20 FSB’s 2027 payments goal – Banking & Finance News

By Kiran Shetty

The G20 comprises the world’s major economies and serves as a crucial platform for international cooperation in addressing global economic challenges. In recent years, the G20’s Financial Stability Board (FSB) has increasingly focused on ensuring smooth flow of value around the world. And in 2020, it set quantifiable targets to make cross-border payments faster, cheaper, more transparent and more inclusive, across three market segments of payments – wholesale, retail and remittances. For example, the G20 has set a speed target of achieving one-hour processing for 75% of international payments by 2027. 

While in-flight processing between originating and beneficiary banks has significantly accelerated, there’s still more work to be done at an industry level to ensure that end customers can access these funds as quickly as possible. At present, only 60% of wholesale payments reach end-customer accounts in under an hour. This is due to delays at the beneficiary leg caused by issues including payment controls (such as currency controls), batch processing and opening hours of market infrastructures. To achieve the goals set by the G20, the industry needs to collaborate at a greater level globally, and local infrastructure and policy step play an important role as well. 

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Addressing Fragmentation with a 360-degree view

Cross-border payments are one of the fastest-growing segments in the global payments ecosystem. According to UK Finance, they are expected to increase by 66% from 2017 to 2027, reaching over USD 250 trillion. This increase is driven by several factors including technology advancement, changing consumer preferences, globalisation, migration of workers across the world, and global expansion of supply chains, among others.

While the industry is working together to manage and support the increasing volumes, fragmentation of different kinds is also cropping up simultaneously. Fragmentation occurs as a result of varying data standards and formats across jurisdictions and systems of financial institutions. This results in inconsistencies while sending financial messages for payments, delays in processing payments and increased costs. 

Enhancing Speed, Transparency and Reducing Risks: Standardisation is the Way to Go

Standardisation is crucial in increasing speed and transparency and minimising fragmentation in cross-border payments. The adoption of ISO 20022 as a common messaging standard, will provide a uniform format for exchanging financial messages, enabling seamless communication across various platforms for cross-border payments. This will ensure all parties involved in payments understand and interpret transaction data accurately, reducing the risk of errors and discrepancies.

Furthermore, ISO 20022 allows payment providers to exchange more information in a structured manner, therefore increasing straight-through processing (STP). The use of structured and rich data will not only reduce the risk of fraud and financial crime but also accelerates transaction processing, leading to faster settlement times and reduced delays.

In addition to messaging standards, a standardised regulatory landscape is essential for facilitating international payments. The regulatory landscape governing cross-border payments is complex, with diverse requirements and legal frameworks across jurisdictions. 

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As the number of options to move money across borders continues to grow, it is also leading to greater friction, which causes the slowing down of payments and increased cost for financial institutions. These can be addressed while eliminating friction at every stage of the payments process by improving data, interoperability and screening services. 

The industry has worked collaboratively to develop tools to pre-validate payments before they are initiated. These tools utilise recent transaction data on the network to verify the accuracy of information, reducing errors and potential delays. In case where issues do occur, financial institutions can use solutions that simplify the investigation, improves efficiency, and reduce costs. The implementation of the ISO 20022 standard for payments will further enhance this. 


The Financial Stability Board’s G20 Roadmap is an important step forward in addressing the challenges and inefficiencies present in cross-border payments. The success of this roadmap hinges on the collective efforts of policymakers, stakeholders, and industry players. We need to come together as an industry to implement innovative solutions that will enable faster, more transparent, accessible, and affordable cross-border payments. This, in turn, will lead to smoother global trade flows and economic growth, benefitting people everywhere.

(The author is CEO and Regional Head, India & South Asia, Swift. Views expressed are the author’s own and not necessarily those of


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