Module: | MODULE A: INTERNATIONAL BANKING
Q245: Consider the following statements regarding the architecture of the SWIFT global payments innovation:
Statement 1: The Tracker component operates as a cloud based database that provides end to end, real time visibility on the status of a cross border payment message across all correspondent banks.
Statement 2: Under the Service Level Agreement, intermediary banks are required to process payments within strict timeframes and provide confirmation of credit to the beneficiary account.
Statement 3: The pre validation tool allows the sending bank to verify the beneficiary account details with the receiving bank before the payment is actually initiated, thereby reducing the rate of rejected transactions.
Which of the statements given above is or are correct?
Statement 2: Under the Service Level Agreement, intermediary banks are required to process payments within strict timeframes and provide confirmation of credit to the beneficiary account.
Statement 3: The pre validation tool allows the sending bank to verify the beneficiary account details with the receiving bank before the payment is actually initiated, thereby reducing the rate of rejected transactions.
Which of the statements given above is or are correct?
✅ Correct Answer: D
The correct combination is D. The SWIFT global payments innovation is an architectural overhaul of the traditional correspondent banking network designed to vastly improve the speed, transparency, and traceability of cross border payments. . Structurally, it consists of several core components.
The Tracker is a cloud based utility that assigns a unique reference code to every payment, allowing banks to track the funds in real time, much like tracking a physical parcel.
Historically, once a bank sent a payment instruction, it entered a blind spot until the beneficiary bank confirmed receipt days later.
To enforce speed, the network includes a multilateral Service Level Agreement that mandates participating banks to process transactions within strict windows and return a status update to the Tracker.
Furthermore, a major cause of delayed cross border payments was incorrect beneficiary data.
To solve this causally, the pre validation tool was introduced.
This technology allows the originating bank system to communicate instantly with the ultimate receiving bank system to verify that the account number exists and is open before the funds are sent, virtually eliminating payments rejected due to administrative errors.
The Tracker is a cloud based utility that assigns a unique reference code to every payment, allowing banks to track the funds in real time, much like tracking a physical parcel.
Historically, once a bank sent a payment instruction, it entered a blind spot until the beneficiary bank confirmed receipt days later.
To enforce speed, the network includes a multilateral Service Level Agreement that mandates participating banks to process transactions within strict windows and return a status update to the Tracker.
Furthermore, a major cause of delayed cross border payments was incorrect beneficiary data.
To solve this causally, the pre validation tool was introduced.
This technology allows the originating bank system to communicate instantly with the ultimate receiving bank system to verify that the account number exists and is open before the funds are sent, virtually eliminating payments rejected due to administrative errors.