The PBOC’s joint venture with SWIFT will build a localised messaging network to provide Chinese FIs with a more stable connection to the main SWIFT network.
The PBOC (People’s Bank of China) has revealed that its newly-established joint venture with SWIFT will be used to establish a more stable connection to the global payments network and to enhance monitoring and analysis of cross-border payment messaging.
The new entity, called Finance Gateway Information Services Co, was established in Beijing earlier this year. At the time, it was reported that the joint venture’s business scope would include information system integration, data processing and technology consultancy.
According to the PBOC, the joint venture will build a localised messaging network to provide financial institutions in China with a more stable, resilient and secure connection to the main SWIFT network.
This will help to address unstable connectivity to the SWIFT network reported by small Chinese banks, which is affecting their cross-border transactions, the central bank said.
In addition, the joint venture will establish a data warehouse to store, monitor and analyse cross-border messaging information domestically to help the PBOC control risks to the financial system.
According to the PBOC, the data warehouse will make it easier for regulators to oversee the financial system and allow financial institutions to obtain a complete picture of their cross-border business.
The other shareholders of the venture include CIPS (Cross-border Interbank Payment System), PCAC (Payment & Clearing Association of China) and CNCC (China National Clearing Centre).
“The cooperation between SWIFT and Chinese-funded institutions in the development of financial gateway services is conducive to mutual benefit and win-win results, and provides users with more stable, resilient, safe and compliant services,” the PBOC said.
“In the next step, the PBOC will strengthen supervision and guidance to promote the standardised development of financial gateway services by all parties.”