Bank-to-bank payment network Swift is to tap the brainpower of UK university students in an effort to find new ways for banks to more cost-effectively serve the global remittance market.
The 2016 SWIFT Institute Challenge will focus on remittances sent via banks operating in the UK market. Each applicant will be required to identify a solution that would enable a bank’s customer to send money cross-border, via their own bank, to an individual in a country where there is little or no banking infrastructure.
The formal banking sector, with its burdensome KYC and anti-money regulatory obligations is seen as a costly mechanism for the cross-border transfer of small cash sums and has largely been sidelined by a new wave of third-party mobile money transfer systems.
A World Bank report from October 2014 puts the global amount of remittances that year at $582 billion and estimates that migrants paid an average of 7.9% in fees on these money transfers.
“Bank remittances are a rapidly growing business impacting millions of people around the world” says Gottfried Leibbrandt, CEO, Swift. “Remittances create a positive spill over from the sending to the receiving country, and can provide stable growth for developing nations. We look forward to tapping into the university ecosystem and exploring the positive and practical implications of new concepts and process innovation.”
The top 10 applicants for the challenge will be invited to give a 10-minute pitch at the Swift Business Forum London on 20 April 2016, with the winners earning a £15,000 cash prize and an opportunity to participate at Sibos 2016 in Geneva.
The initiative has been welcomed by HM Treasury, which is keen to push the UK's role as a global financial centre and innovation hub.
Harriett Baldwin, economic secretary to HM Treasury, says: “Through this programme, Swift is bridging the gap between financial practitioners, academia and the student community, helping to identify new ways to make banking and financial services more efficient and effective in serving the evolving needs of UK customers.”