Technology: A digital upgrade for funds verification

Technology: A digital upgrade for funds verification

Proof of funding is a critical requirement for study at the world’s top higher education institutions. Prospective international students must show evidence of sufficient funds to support the costs of living and studying in that country, as a condition for student visa approval. The current process for verifying funds is mostly paper-based and cumbersome, with considerable potential for fraud. However, recent developments are helping to push this process into the digital age.

The need for global standards

A number of trends are converging, which make a strong case for developing global standards in international student funds verification:

Rise in self-funding: Times Higher Education noted a marked trend towards international students (and their families) paying their way privately – due to shrinking sources of public funding. Between 2000 and 2009, the proportion of spending on higher education that came from private sources grew by an average of seven percentage points across OECD countries.

Higher level of comfort with online banking: In certain pockets of the world, consumers haven’t written a paper cheque in years. This Ernst and Young Survey on Consumer Banking revealed that 47% of respondents globally said they prefer to use internet banking for simple transactions.

Personal identity management: Online users are demanding greater control over their ‘digital footprint’. Owners of online data should be entitled to point it to the authorities who have a legal right to access it. Similarly, online users should be able to block access to their data as well.

Upward trend in global student mobility: The world’s middle class stood at 737 million people in 1965, and is expected to grow to around 4.9 billion by 2030. Experts estimate that two billion people will enter the middle class in the next decade – and they may very well have high academic aspirations for their children to study abroad.

Shrinking budgets to process growing numbers: Hosts at both the campus level and the government level recognise the need to enhance efficiencies and boost the integrity of student visa processing. By effectively utilising proven technologies to facilitate the funds verification process, authorities can focus on other admissibility indicators that require a more nuanced and personal approach. Here are just few examples of the current reforms taking place around the world:

  1. The U.K. Border Agency is undergoing a reform of its student visa system
  2. U.S. Department of Homeland Security intends to deploy a “paperless” SEVIS II
  3. Students from select home countries can now apply online for their new student visa to Australia
  4. New Zealand will provide all student visa applications online by the end of 2013

In the increasingly competitive environment of international student recruitment, higher efficiency and greater integrity also serve as a competitive advantage. Prospective students often choose the path of least resistance, when comparing host country destinations as well as potential host campuses.

The SWIFT Solution

To address the need for information efficiency in international student mobility, the FundsV Working Group was formed in mid-2010 at the request of Belgium-based SWIFT (the Society for Worldwide Interbank Financial Telecommunications). The goal is to develop global standards that significantly improve the integrity of the funds verification process, by providing a robust platform that empowers students and their sponsors to securely point their online banking data to authorised hosts that request it. The world’s top host countries as well as top countries of origin currently participate in Working Group meetings, three times annually.

In January 2013, SWIFT released a new ‘authorities’ message class, initially proposed by the Federation of Finnish Financial Services. With the consent of the bank account holder, an organisation with legal authority granted by the government may now perform financial inquiries. This new functionality would nearly quadruple the coverage of financial institutions, from 2800 in the current FundsV network, to more than 10 000 SWIFT affiliates.

SWIFT’s new message class complies with the International Organization for Standardization via its universal financial message scheme, ISO20022. Its business modeling approach allows users and developers to represent financial business processes and underlying transactions in a formal but syntax-independent notation. ISO compliance leads to numerous opportunities for collaboration across the international education sector.

As the sector matures, international education professionals can decide to foster that growth within intelligent frameworks designed by safe, proven technologies. Colleagues must continue to seek input from successful sources outside of this industry itself, as true innovation happens when two (or more) distinct disciplines rub up against each other. In this case, online banking has mated with one critical admissibility indicator for global student mobility of qualified applicants – proof of funding.

By Cheryl Darrup Boychuck, Chief Architect of FundsV and owner of the U.S. Journal of Academics