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Insights and Expertise

Are G20 Cross-border

Goals Achievable by 2027?

systems, delays due to different time zones and clearing
house operating hours, and the impact of compliance and
security checks.

But in the face of these challenges, progress has been
made. Last year brought major milestones, not the least
being when Swift went live in March 2023 with ISO20022,
for example.

This provides the foundation for banks to communicate in
the same language globally when processing cross-border
payments. In turn, it means the chance to fulfill the G20
targets, as the standard allows banks to reduce costs, im-
prove reconciliation and enhance financial crime detec-
tion.

However, migration to ISO20022 is perhaps not happening
fast enough to beat that looming 2027 date. This is partly
because the investment to migrate core banking systems is
By Edvards Margevics huge, and partly because corporations still need some con-
CONCRYT vincing of the benefits they'll get from such an investment.

ueling the import and export of goods and ser- An additional challenge here is that each jurisdiction and
vices, cross-border payments are the lifeblood of bank interprets ISO20022 slightly differently, making the
global trade. Yet a range of challenges continue term "standard" a little ironic.
F to hinder their speed and efficiency. This article
delves into how close we really are to the G20's ambitious But the ISO20022 journey is still at a relatively early stage,
cross-border goals, and the projects that could make them and there is time for these issues to be overcome. It re-
achievable. mains to be seen whether there is enough time to meet the
2027 deadline, but other efforts are underway that could
It seems a lifetime ago that G20 leaders endorsed a road be key to hitting the G20 goals.
map to revolutionize cross-border payments by 2027. Back Cross-border projects to watch
in November 2020, and in the midst of a global pandemic,
that date was a mere dot on the horizon—plenty of time to G20 leaders aren't the only one's intent on improving
achieve even the most ambitious goals. cross-border payments; some promising BIS projects are
underway with the same aim.
And ambitious they were. The road map set quantitative
targets to lower costs and increase speed, accessibility and Launched by the Bank for International Settlements (BIS)
transparency of international payments by the end of 2027, in June, Project Rialto (see www.bis.org/about/bisih/topics/
including 75 percent of cross-border payments to be cred- cbdc/rialto.htm) is designed to explore how instant cross-
ited to the beneficiary within an hour. border payments could be improved using a modular for-
eign exchange (FX) component combined with settlement
Now the deadline for these goals isn't a dot on the horizon, in wholesale central bank digital currencies (CBDC).
but a looming presence. Half of the seven-year period to
meet G20 requirements has now elapsed, and significant FX is a key component of cross-border payments, but cur-
challenges that must be overcome still exist. rently the FX services facilitated by correspondent banks
Obstacles on the road map can be expensive, slow and complex, exposing those in the
payments chain to liquidity, credit and settlement risks.
Despite the best intentions of the G20, cross-border pay-
ments remain riddled with challenges. Chief among them Decentralized solutions, CBDC and interlinked payment
are lack of interoperability between national payment infrastructures could unlock improved cross-border pay-
ments, but how they interact has not yet been explored.
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