The Society for Worldwide Interbank Financial Telecommunication (SWIFT) revolutionized international transactions with the introduction of its Global Payments Innovation (gpi). The primary goal of SWIFT gpi is to modernize and automate cross-border payments, ensuring speed, traceability, and transparency.

The Automatic Process: GPI Bank to GPI Bank

When both the sending and receiving banks are gpi members, the process can be fully automated. This makes the transaction faster, more efficient, and eliminates potential errors that may occur during manual processing. It enables real-time tracking of payments from start to end, providing a level of transparency previously unseen in cross-border transactions.

The Semi-Automatic Part of the Process: 
Non-gpi Bank to gpi Bank or gpi Bank to non-gpi Bank

The semi-automatic gpi process comes into play when a transaction is initiated by a non-gpi bank to a gpi member bank. This transaction starts manually and becomes automated once it reaches the gpi member bank. If the non-gpi bank does not populate SWIFT fields 121 and 111, it becomes the responsibility of the first gpi member bank in the transaction chain to complete these fields accordingly thus ensuring the transaction meets the gpi standards for tracking and service level identification. 

1. Field 121 (Unique End-to-End Transaction Reference – UETR): This field is used to identify a payment transaction throughout its entire life cycle. It’s a mandatory field for all gpi transactions, and each transaction must have a unique UETR.
2. Field 111 (Service Type Identifier): This field is used to indicate the type of service, or level of urgency, required for a transaction. For example, a value of 001 indicates a normal payment, whereas 002 specifies a high priority payment.

At the initiation stage, a manual input of transaction details is required, including the beneficiary’s information, amount, currency, and purpose of the transfer. This initial process is necessary as the non-gpi bank might not have systems in place to automate this part of the transaction.

The semi-automatic process then allows for a human to manually review the transactions to ensure compliance with regulations, such as Anti-Money Laundering (AML) and Know Your Customer (KYC) rules. Large or non-standard transactions may also require manual authorization or approval, ensuring they meet specific risk management or policy criteria.

Human Intervention can stop the Automatic Processes

Despite the predominant automation, certain circumstances could require human intervention, even in fully automatic gpi transactions.

1. Fraud Detection: If a system flags potential fraudulent activity, a transaction might be halted for human review. This could be due to patterns that match known fraud methods, unusually large transfers, or transactions involving regions or parties with a high risk of fraud.
2. Recall Requests: If a recall request is made for a transaction (e.g., due to an error or a detected fraud), a human may need to intervene to process the recall, particularly if the recall request is complex or requires coordination between multiple parties.
3. Regulatory and Compliance Concerns: Automatic transactions might be paused for human review if they involve countries or entities subject to sanctions, or if there are other compliance concerns. This review can help ensure the transaction complies with all applicable regulations.
4. Technical Issues: In the event of a system outage, bug, or other technical problems, human intervention might be required to fix the issue and ensure the transaction is processed correctly.

While SWIFT gpi’s key promise lies in automation and efficiency, the reality of global financial transactions means there is still a role for human oversight. This blend of semi-automatic and automatic processes, paired with the necessary human intervention, allows the SWIFT gpi system to cater to a broad range of needs, while maintaining the highest standards of speed, security, and compliance.