SWIFT cites high cost of splintered financial world

Many digital payment platforms remain disconnected from each other.

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Regulatory differences, emerging digital assets, and outdated banking infrastructure are leading to a more fragmented financial world, with projected economic losses of as much as $6.5t by 2030, according to Belgium-based cooperative SWIFT SC.

Whilst there are now dozens of ways to pay and transfer money across borders, many of these platforms remain disconnected from one another, Kevin Wong, CEO at SWIFT Asia Pacific, told Asian Banking & Finance.

"Financial fragmentation in 2025 is being driven by regulatory divergence and a lack of interoperability between financial systems," he said.

Fragmentation adds friction to international trade and hinders global economic growth, with projected economic losses of as much as 6% of global economic output five years from now, according to a January report by the Economist Impact commissioned by the Society for Worldwide Interbank Financial Telecommunication (SWIFT).

Almost 280 million fewer jobs will be created, innovation slows, financial inclusion efforts are hindered, and overall risk and uncertainty may rise, according to the research.