The Boston Consulting Group (BCG) say Ripple and other cross-border payments challengers often outperform banks in more than one aspect.
in a new report, the global management consulting firm says cryptocurrencies are increasingly relevant and that banks need to “revamp” their cross-border business practices to keep pace with new technology.
“Card networks, fintechs, and infrastructure providers such as Ripple and Earthport have entered the cross-border payments space in recent years. These challengers often outperform banks in speed, pricing, API integration, and the overall customer experience. To stay competitive, banks will need to change their approach.”
The BCG also notes that that banks relying on the Society for Worldwide Interbank Financial Telecommunication (SWIFT), a legacy international payments messaging system, will need to continually innovate.
“Many banks have introduced SWIFT gpi to improve the speed and tracking of international payments. But with challengers providing convenient solutions like ‘request to pay’ that facilitate remittance and reconciliation, banks need to continue refreshing their own offerings.”
SWIFT gpi (global payment initiative) is a suite of cloud-based tools designed to increase the speed and transparency of international payments. SWIFT is used by more than 11,000 financial institutions.
In its global payments report, BCG also notes that banking consortiums can alleviate the “significant investment” costs associated with blockchain-enabled cross-border payments.
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