Australia’s real-time payment system, the New Payments Platform (NPP), will be extended to allow cross-border payments from December 2022. At that time all financial institutions participating in the NPP must join its international payments business service and be capable of receiving cross-border payments via the NPP. This will become a mandatory compliance requirement in April 2023,1 necessitating real-time fraud management and sanctions screening. In preparation for that event, Commonwealth Bank of Australia is now live with real-time sanctions screening of domestic NPP payments.

Long involvement in fast cross-border payments

Over the past few years, Commonwealth Bank has partnered with banks around the world to research and test instant payment systems with a view to making cross-border payments faster, measurable and trackable. We participated in the original rule book for the SWIFT gpi (Global Payments Innovation), as well as instant payment proof-of-concepts in the Asia-Pacific and Europe. Last September, for example, we joined banks in Singapore, Spain and the US to evaluate SWIFT gpi’s ability to deliver and settle real-time payments across jurisdictions and to the UK. We proved that time zones are no barrier to real-time payment processing.1

From real-time fraud management to automated, analytical sanctions screening

Commonwealth Bank has visibility of around 40% of all financial transactions in Australia. It processes the largest volume of NPP payments2, and almost one in two inbound cross-border commercial payments are destined for a Commonwealth Bank beneficiary account.3

Every year the bank’s team of real-time fraud monitoring and investigation specialists detect around AUD500 million worth of attempted fraud against our customers. After a customer initiates a payment, it takes just milliseconds to decide whether or not the payment should proceed. Commonwealth Bank’s Fraud Decisioning Platform flags any deviation from a customer’s activity to trigger action, including automated intervention.

Banks around the world have been conducting sanctions screening of non-instant SWIFT payments for some time. However, it is real-time sanctions screening capability that will deliver a safe, secure and compliant real-time cross-border payment customer experience.

Craig Hiscox, Senior Business Analyst, Sanctions Technology at CommBank, says his team has automated many of the residual manual processes and incorporated improved analytical information to enable faster investigations. Like fraud, payments are now sanction screened in milliseconds. Where there is an alert, the decision takes just seconds. “Less delay means a better real-time payment experience for our customers” says Craig.

At the forefront of real-time sanctions screening in Australia on domestic NPP payments

In Australia, payments are typically screened post-facto, namely after the payment has been paid to the beneficiary account. However, with growing NPP data volumes and a dynamic sanctions screening landscape, we have taken the first step in readiness for cross-border NPP payments. On 28 May 2021 we switched to real-time screening on domestic NPP transactions, using a more holistic approach and greater use of available data so we can make more timely decisions.

Michael Selim, Commonwealth Bank’s Executive Managers, Sanctions Technology, says it is the same capability that will be needed when inbound cross-border NPP payments kick off next year. “We are using state-of-the-art technology to facilitate at-scale, real-time screening to meet regulatory expectations and existing compliance standards.”

The screening capability covers all parties, including both the initiator and the recipient of the payments, so we screen both other banks’ customers and our own. Michael says that provides an additional layer of confidence and governance.

When cross-border payments via NPP become available, we will be strongly positioned with this industry-leading capability that satisfies all the regulatory screening to ensure compliance with multiple regulatory regimes, says Michael. That makes Commonwealth Bank the partner of choice when making or receiving real-time AUD payments.

Things you should know

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. You should consider seeking independent financial advice before making any decision based on this information. The information in this article and any opinions, conclusions or recommendations are reasonably held or made, based on the information available at the time of its publication but no representation or warranty, either expressed or implied, is made or provided as to the accuracy, reliability or completeness of any statement made in this article. Commonwealth Bank of Australia ABN 48 123 123 124. AFSL and Australian Credit Licence 234945.