Almost three quarters of banks say they know of and understand Swift's new Bank Payment Obligation, according to new research from The Aite Group.
The figures will make comforting reading for Swift and the ICC, which have championed the new instrument, although only 2% of banks are already using it.
The Bank Payment Obligation is effectively an electronic replacement for Letters of Credit (LoC) and should help speed up trade finance transactions.
“The BPO represents a fresh entry to trade finance,” said report author Enrico Camerinelli, senior analyst with Aite Group and a Transaction Banking Academy tutor. “Its current, lukewarm acceptance by banks and corporations will turn into full endorsement only after real examples prove its use as a payment instrument and risk mitigation tool for trade transactions in any part of the trade lifecycle.”
The report is available from Aite Group: http://www.aitegroup.com/Reports/ReportDetail.aspx?recordItemID=930
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