This is the second of a 2 part post that covers the advantages and disadvantages of SWIFT connectivity. In the post I’ve Got 99 Problems But SWIFT Connectivity Ain’t 1, I cover all the advantages of SWIFT connectivity. But like any solution it is never straight forward and without its flaws. In this post I will highlight some of the challenges of using SWIFT as your bank connectivity solution. Please note this isn’t intended to be a criticism of SWIFT as a bank connectivity solution, but rather to highlight to corporates that SWIFT isn’t always the answer to all of your bank interface headaches.

SWIFT Connectivity Challenges

Again this is with reference to SWIFT connectivity for corporates, and in no particular order…

1. Joining SWIFT

As a corporate it is getting easier to join SWIFT, but it does take time and will involve resources from across your organisation. Resources to complete the joining procedures, review the data and legal documents, and your techies to review how you will access the SWIFT network

Having completed the SWIFT membership procedure you then need to work with your banks to understand their SWIFT set up and procedures. Anything legal and documentation related is rarely straightforward.

2. The first cut is the deepest

In order for you to get the most out of SWIFT connectivity, you have to invest a significant amount of resources, time and money in order to build a secure and automated end to end interface between your ERP system(s) and your banks. You must not underestimate the effort involved in this initial set up, and not be led to believe that any subsequent SWIFT implementations will be straightforward.

While it is true that the first implementation is the trickiest, with the steepest learning curve and most to do, subsequent deployments of SWIFT connectivity are never as straightforward as you would hope.

3. SWIFT Connectivity ain’t plug and play

Continuing on from the above point, we all know that you cannot simply copy and paste a bank interface. Each interface is different, the following list indicates some of the reasons why each interface is unique:

• The ERP system may be different
• The ERP system may be the same, but there may be nuances in its data set up or configuration
• The business needs and requirements may be different
• The interface with the bank may need to handle a specific in-country requirement
• The target bank may be different
• The local clearing system and / or rules and regulations in the country may be different

So even when the underlying SWIFT connectivity is in place, it is never as simple as plugging the new interface into SWIFT and hey presto!

4. Costs

SWIFT is not the cheapest bank connectivity solution available. But as you start to standardise and centralise your bank interfaces into the SWIFT model, you will start to realise efficiency gains of moving to SWIFT. But this does not come cheaply. Also keep in mind there are ongoing per message and per file SWIFT charges that can build up if you’re not careful. Particularly if you are sending a high volume of cross border messages and / or files over the SWIFT network. One solution to consider in this instance is a single BIC solution. Depending on how you connect to the SWIFT network will also impact the ongoing costs.

5. Reliability

In the post I’ve Got 99 Problems But SWIFT Connectivity Ain’t 1, I reference SWIFTs 99.999% availability statistic. Thats great, but if your banks SWIFT gateway is down or unavailable for whatever reason – your payments and reporting processes are put on hold! Its not necessarily SWIFT that is the concern here, but all of the sub-journeys that your files and messages need to make on their way to or from the SWIFT network.

6. A Strong Bank Partnership

For SWIFT to work as a successful connectivity solution, corporates need close support and guidance from their bank(s). Banks must provide support from the most senior levels through to the immediate project team to ensure the success of the SWIFT project. Without good bank collaboration, the project is set to fail.

7. SWIFT connectivity is only as strong as the weakest link

Sorry for the cliché! One of the key objectives of any SWIFT implementation is to have a single, centralised, secure and standardised connectivity solution with multiple banks. This also presents some challenges. Namely, dependence across your organisation on this single, centralised connectivity solution.

In this instance you need to think very carefully about your:

• Source ERP system(s)
• Middleware process and software
• The mechanism through which you connect to SWIFT, be it:
  • A direct link through internally hosted SWIFT infrastructure
  • SWIFT Service Bureau
  • Alliance Lite 2
• Banks SWIFT availability

There are a lot of potential points of failure in the above list, and different teams involved in the end to end SWIFT connectivity. If any one of the above breaks down, the SWIFT connectivity process is broken. Now in a centralised and standardised connectivity model a breakdown in one of the above may impact one or more business functions or locations and in extreme cases, it could have GLOBAL repercussions for your organisation – Aaarrrggghhhh!

8. Good Project Management

As you can see from the above, there are many touch points in any end to end SWIFT connectivity solution. For both the initial implementation and subsequent SWIFT implementations to be successful you need strong project management processes overseeing the deployment. There are many moving parts, and like any implementation you are likely to discover new or unexpected requirements. The business case must be strong, with good engagement from key stakeholders, along with a defined list of deliverables. Lastly the project needs to run through the key phases of a project in a timely manner involving resources from both the corporate and the bank.

9. Data Formats

Despite some progress through initiatives such as CGI (Common Global Implementation), the idea of a standard and consistent ISO 20022 XML payment format across many countries is not quite there yet. There are always slight differences in the format requirements due to reasons mentioned in point 3 above. Each of these requirements means that you have to deviate at best ever so slightly and at worst drastically from the standardised model that you had originally envisaged.

It is great that the formats are fairly similar in that they are ISO 20022 XML. But when you start tweaking interfaces in each country you very quickly you start to build a catalogue of unique interfaces. Each of which needs to built, tested, deployed and supported.

10. Understanding the tipping point

You need to review the various and available connectivity solutions and make a solution choice that is right for your organisation. There is a point at which SWIFT becomes a viable option, you need to understand that particular tipping point for YOUR organisation. These 10 Bank Connectivity Questions will provide you with a good start to understanding your existing environment and will help you work with connectivity providers and your banks to assess an appropriate bank connectivity solution.

SWIFT Connectivity for Corporates

As I mentioned at the outset, the goal here is to highlight that SWIFT is not a bank connectivity utopia. It is a complex solution requiring multiple teams and processes, internal to your organisation and external. Each of these needs to be closely considered and reviewed. SWIFT connectivity is clearly a great bank agnostic solution, but it is the way in which you chose to implement the SWIFT solution and the teams that you partner with that determine the overall success of the project. SWIFT is not a magic bullet and embarking on any new corporate SWIFT connectivity initiative offers both opportunities and drawbacks.

The post 10 Reasons Why SWIFT Connectivity Is Not a Magic Bullet appeared first on SEPA for Corporates.

As you can probably tell, I’ve been on a bit of a SWIFT for Corporates mission recently. The posts I’ve Got 99 Problems But SWIFT Connectivity Ain’t 1 and 10 Reasons Why SWIFT Connectivity Is Not a Magic Bullet have been extremely popular. Having completed these posts, I thought it would be interesting to revisit the key messages for corporates from the ‘SWIFT for Corporates’ session during the London SWIFT Business Forum held in April this year.

Check out the SWIFT for Corporates slideshare for the fancy pie charts and full details, but following are the key messages that corporates need to know:

1. Why are Corporates Implementing SWIFT?

• To reduce the number of bank connectivity solutions
• To enable straight through processing
• To give corporates better and more timely access to data
• To enable the implementation of industry data standards
• To automate bank communications with multiple banks
• To implement a bank connectivity solution that is ERP system and bank agnostic

2. Evolution of SWIFT for Corporates

• In 2009 there were 579 corporates registered with SWIFT, in 2014 there are 1405
• 43% of Fortune Global 500 companies use SWIFT, and an impressive 18 out of the top 25
• Most corporates come from Europe (69%) with the remaining from the Americas (21%) and Asia Pacific (10%)
• Corporates make up 12% of SWIFT membership

3. The Profile of Corporates using SWIFT

• By annual turnover (USD), its still the biggest corporates that are using SWIFT – the bandings being:
  • <$ 1 billion – 42%
  • $1 – 10 billion – 30%
  • >10 billion – 28%
• The number of bank relationships is pretty evenly split at about 25% across the following: 1-5, 6-10, 11-20, >21

4. SWIFT for Corporates – FIN Traffic

• Most of the corporate/bank FIN traffic is received by corporates (83%), and 17% is corporate to bank
• Of the FIN traffic:
  • Corporates send to bank, the most popular message type are MT101 (43%), MT103 (34%) and MT300 (10%)
    • Basically, your wire payments!
  • Corporates receive from their banks, the most popular are MT940 (50%), MT942 (27%) and MT900 (8.5%)
    • In short, bank statements!

5. SWIFT for Corporates – FileAct Traffic

• Most of the corporate/bank FileAct traffic is received by corporates (72%), and 28% is corporate to bank
• SWIFT don’t indicate the details of these FileAct transmissions – I suppose they don’t know, they just deliver on behalf of the banks & corporates . Although the request type information may offer some interesting clues about the file information type

6. SWIFT Connectivity Options

• Hosting the SWIFT connectivity infrastructure in-house
• Partnering with a SWIFT Service Bureau
• Utilising the SWIFT cloud based connectivity solution, Alliance Lite2

7. The SWIFT for Corporate “Suite”

I don’t want to do a SWIFT sales pitch, I will leave that to SWIFT! But the point I want to make is that they are getting into additional business flows – beyond the traditional payments and cash management. Most notably foreign exchange, trade finance, supply chain finance, regulatory requirements and Electronic Bank Account Management (EBAM).

SWIFT are also trying to make corporate ‘on-boarding’ easier, so they have a range of products and initiatives to help corporates along the way. I may cover some of these in the future – depending on the interest out there.

8. SWIFT for Corporate Trends

• In short, SWIFT want to register more corporates globally. In order to do this, SWIFT recognise they need to make it easier to register corporates and implement SWIFT solutions – this is great for corporates!
• In 2014, the:
  • Biggest growth was in the Americas, up 40% on 2013
  • Most corporates registered were in Europe, 121 compared to 107 in 2013
  • Of the corporates joining SWIFT half had an annual turnover of under $1 billion

 SWIFT for Corporates

It will be interesting to see how SWIFT develop their business case with corporates, and to see if they truly manage to entice a broader range of corporates through their proposed faster on-boarding solutions. If this happens, it presents corporates with very real opportunities to centralise, streamline and make various processes more efficient globally. What remains key though is that SWIFT continue to offer corporates a standardised and multi-bank solution across all products. The bank agnostic and global channel is the beauty of SWIFT, and as SWIFT spreads it wings into additional offerings it also remains its biggest challenge.

The post 8 SWIFT for Corporates Insights by SWIFT appeared first on SEPA for Corporates.

The recent SWIFT related posts have been pretty popular, and many of you have contacted me asking for more detailed information about SWIFT message types. To get the full lowdown on SWIFT message types, you need to read SWIFT’s very own Standards Inventory Of Messages. Its 47 pages worth of SWIFT message types, nice bedtime reading!! To save you the pain, I have read (learnt a bit too) and provided an overview of the main message types below. Unless you like talking about SWIFT message types, you don’t need to know most of these. But it is useful to know they exist and if you ever needed there are a range of messages out there. I have referenced some of the important ones from a payments perspective.

If you need more information, refer to the Standards Inventory of Messages…

MT – SWIFT Message Types:

• Category 1 – Messages starting MT1xx -  Customer Payments & Cheques
  • This is the most popular category for corporates making payments containing the:
    • MT101 – Request for Transfer
• Category 2 - Messages starting MT2xx – Financial Institution Transfers
• Category 3 – Messages starting MT3xx – Treasury Markets, to handle Foreign Exchange, Money Markets and Derivatives
• Category 4 – Messages starting MT4xx – Collection & Cash Letters
• Category 5 – Messages starting MT5xx – Securities Markets
• Category 6 – Messages MT600 – MT609 - Treasury Markets – Previous Metals
• Category 6 – Messages MT643 - MT649 - Treasury Markets – Syndications
• Category 7 – Messages starting MT7xx – Documentary Credits & Guarantees
• Category 8 – Messages starting MT8xx – Travellers Cheques
• Category 9 – Messages starting MT9xx – Cash Management & Customer Status
  • The most important messages for most corporates would be the:
    • MT900 – Confirmation of Debit
    • MT940 – Customer Statement Message
    • MT942 – Interim Transaction Report
• Category n – Common Messages found across the above Categories
  • MTn90 – Advice of Charges, Interest and other Adjustments
  • MTn91 – Request for Payment of Charges, Interest and other Expenses
  • MTn92 - Request for Cancellation
  • MTn95 - Queries
  • MTn96 – Answers
  • MTn98 – Proprietary message – messages defined and exchanged between users
  • MTn99 – Free format message – often used by banks to send details of payments in error
    • MT199 is often sent by the banks to corporates indicating why a payment has failed

MX – SWIFT Message Types:

For full details, refer to the SWIFT’s Standards MX General Information

An MX message consists of 4 parts -  ssss.eee.ppp.aa – where:

• 4 alpha characters – ssss – identifying the Message Type
• 3 alphanumeric characters – eee – identifying the Message Number
• 3 numeric characters – ppp – highlighting the Message Variant
• 2 numeric characters – aa – denoting the Version Number

As SEPA experts (hehehehe…!) you will be very familiar with SEPA Credit Transfer pain.001.001.03

For our purposes, the most important thing to know (for now) is the Message Type. After that you will need to work with your banking partners to understand the most appropriate Message Number / Variant & Version….

Message Types:

• ACMT – Account Management
  • For example:
    • acmt.001.001.02 – Account Opening Instruction version 2
    • acmt.002.001.02 – Account Details Confirmation version 2
• ADMI- Administration
• CAMT – Cash Management
  • For example:
    • camt.053.001.01 – Bank to Customer Statement version 1
• DEFP - Derivatives
• PACS – Payments Clearing & Settlement
• PAIN – Payments Initiation
  • As mentioned above, through SEPA you will be very familiar with:
    • pain.001.001.03 – Customer Credit Transfer Initiation
    • pain.002.001.02 – Payment Status Report – sometimes also called a PSR
    • pain.008.001.02 – Customer Direct Debit Initiation
• REDA – Reference Data
• SEEV – Securities Events
• SEMT – Securities Management
• SESE – Securities Settlement
• SETR – Securities Trade
• TREA – Treasury
• TSMT – Trade Services Management

Hope that has given you an insight into the different SWIFT message types, and an understanding of the various available messages. If it has helped you, kindly SHARE IT….

The post SWIFT Message Types – Know Your MTs from your MXs… appeared first on SEPA for Corporates.

If you’re looking at a SWIFT message for the first time, it can be a bit daunting. To the untrained eye the whole SWIFT message structure can look like gobbledygook. But actually, there is a bit of a method to the madness. Whether you are receiving, processing or constructing an MT101 or an MT940 message it is important to what you’re dealing with, and what needs to go where. Let me explain…..

SWIFT Message Structure

A SWIFT MT message consists of the following blocks or segments:

• {1:} Basic Header Block
• {2:} Application Header Block
• {3:} User Header Block
• {4:} Text Block
• {5:} Trailer Block

To keep it very simple I’ve not included any data at this point – but to highlight the SWIFT message structure will appear something like the following:

{1:}{2:}{3:}{4:

-}

{5:}

SWIFT Message Structure: Basic Header Block

This will provide information on the contents of the Basic Header Block – the bit that starts {1:

It will typically consist of something like: {1:F01YOURCODEZABC1234567890} where:

• {1: – Identifies the Block – i.e. the Basic Header Block
• F – Indicates the Application Id – in this case, FIN
• 01 – Indicates the Service Id
  • 01 = FIN
  • 21 = Acknowledgement (ACK) or Negative Acknowledgement (NAK)
• YOURCODEZABC – The Logical Terminal Address – which is typically your BIC 8 (YOURCODE) + Logical Terminal Code (Z) + Branch Code
  • I know YOURCODE is an invalid BIC – but lets go with it…
• 1234 – Session Number – Ask SWIFT or your Service Bureau how they want you to populate this – this is not very interesting for corporates
• 567890 – Sequence Number – As above, ask your SWIFT people how they want this populated
• } – Indicated the end of the Basic Header Block

SWIFT Message Structure: Application Header Block

The Application Header Block will always starts {2:

And will look something like: {2:I101YOURBANKXJKLU3003} where:

• {2: – Indicates the start of the Application Header block
• I – Informs you that you’re in Input mode (i.e. the Sender), O would indicate Output mode – so you would be the recipient of the message
• 101 – Message type – in this case, an MT101
• YOURBANKXJKL – The recipients BIC, consisting of their BIC (YOURBANK) + Recipients Logical Terminal Code (X) + Recipients Branch Code (JKL)
• U – Message Priority:
  • U – Urgent
  • N – Normal
  • S – System
• 3 – Delivery Monitoring – Ask your SWIFT contacts or Service Bureau how you should populate this, if at all - Optional
• 003 – Non-delivery notification period – again, ask your SWIFT contacts how to populate this, if at all – Optional
• } – Indicated the end of the Application Header Block

SWIFT Message Structure: User Header Block

The User Header Block will always starts {3:

And will look something like: {3:{108:ILOVESEPA}} where:

• {3: – Indicates the start of the User Header Block
• You can add a optional bank priority code, in this example I have not added it…
• {108:ILOVESEPA} – Indicates the Message User Reference (MUR) value, which can be up to 16 characters, and will be returned in the ACK
• } – Indicated the end of the User Header Block

SWIFT Message Structure: Text Block

The Text Block will always starts {4:

And will look something like: {4:

Followed by the details of the message you’re sending. In this case, it is a MT101 – as indicated in Application Header Block message type. For this piece, I strongly recommend that you find and read the appropriate SWIFT message specification – in this instance SWIFT MT101 Format Specifications –  and then work with your bank(s) to understand their specific message requirements.

Finally ending with -}

SWIFT Message Structure: Trailer Block

The Trailer Block will always starts {5:

This can be added by you or the system. Work with your SWIFT contacts to know if you need to indicate this block.

And ends with }

Sources:

• IBM SWIFT Message Block Structure
• Anatomy of a SWIFT Message
• SWIFT by Paras

The post The Structure Of A SWIFT Message, Explained! appeared first on SEPA for Corporates.

Having explained the various SWIFT message types and the structure of a SWIFT message, one of the other big questions that corporates contend with is what is the difference between a SWIFT ACK (Acknowledgement) and SWIFT NACK or sometimes referred to as SWIFT NAK (Negative Acknowledgement). Let’s get straight into it…

The Structure of SWIFT Acknowledgements

In the post Structure of a SWIFT Message post, I explain the 5 blocks that constitute a SWIFT message: {1:} Basic Header Block {2:} Application Header Block {3:} User Header Block {4:} Text Block {5:} Trailer Block Well, SWIFT Acknowledgements contain just 2 blocks: {1:} Basic Header Block {4:} Text Block The Basic Header Block is exactly as described in the Structure of a SWIFT Message. The important thing to note in the Basic Header Block is that a SWIFT Acknowledgement message will start  {1:F21

• {1: Indicates that its the Basic Header Block
• F21 Indicates that it is an (Acknowledgement) ACK/NAK message
• The rest of the Basic Header Block is as described in the Structure of a SWIFT Message post

Lets now go through the details of the text block, this is where the differences lie…

A SWIFT ACK – {451:0}

A SWIFT ACK would typically look something like the following:  

{1:F21YOURCODEZABC1234567890}{4:{177:1508052359}{451:0}{108:ILOVESEPA}}

Where:

• {4: – Text Block
• {177: – Date Tag
• 150805 – Local date of the submitting user on to the SWIFT network
• 2359 – Local time of the submitting user on to the SWIFT network
• } – End of Date Tag
• {451: – Accept / Reject Tag
• 0 – Accepted by the SWIFT Network
• } – End of Accept / Reject Tag
• {108: – Message User Reference (MUR)
• ILOVESEPA – Sent reference in the original outbound message
• } – End of MUR Tag
• } – End of Acknowledgement

Ok, so to state the obvious – THE most important piece to focus on is {451:0} indicating the message has been successfully accepted by SWIFT

A SWIFT NACK or SWIFT NAK – {451:1}

A SWIFT NACK would typically look something like the following:

{1:F21YOURCODEZABC1234567890}{4:{177:1508052359}{451:1}{405:T27}{108:ILOVESEPA}}

Where:

• {4: – Text Block
• {177: – Date Tag
• 150805 – Local date of the submitting user on to the SWIFT network
• 2359 – Local time of the submitting user on to the SWIFT network
• } – End of Date Tag
• {451: – Accept / Reject Tag
• 1 - Rejected by the SWIFT Network
• } – End of Accept / Reject Tag
• {405: – Reject Reason
• T27 – FIN Error Code – There are many, this is just an example – BIC incorrectly formatted or invalid
• } – End of Reject Reason
• {108: – Message User Reference (MUR)
• ILOVESEPA – Sent reference in the original outbound message
• } – End of MUR Tag
• } – End of Acknowledgement

Ok, so in the SWIFT NACK or NAK - the Accept / Reject Tag {451:1} equal 1, indicating the message has been rejected by SWIFT. It then includes a tag indicating the Reject reason {405:T27}

The Difference Between a SWIFT ACK and SWIFT NACK

If we put the ACK and NACK alongside each other:

SWIFT ACK: {1:F21YOURCODEZABC1234567890}{4:{177:1508052359}{451:0}{108:ILOVESEPA}}
SWIFT NACK: {1:F21YOURCODEZABC1234567890}{4:{177:1508052359}{451:1}{405:T27}{108:ILOVESEPA}}

We can see that the SWIFT NACK Indicates a Rejected Status {451:1} and the Rejected Reason Error Code {405:T27}

SWIFT FIN Error Codes

Now you’re probably thinking, “Great….! But how do I find out what a T27 or whatever error code I get is in plain English…?”

Good question – SWIFT have published a list of all the error codes. I couldn’t find the SWIFT document but check out IBM’s list of SWIFT Error Codes. Most of the errors for corporates will be found in the Text Validation Error Codes section

Hope that helps…!!

Source:

• SWIFT – System Messages – Advance Information

The post The Difference between a SWIFT ACK and SWIFT NACK appeared first on SEPA for Corporates.

The other week SWIFT published a release titled Transforming the business of banking. The article gets views from some of the top SWIFT for corporate representatives and outlines how SWIFT aims to sign up more corporate customers and further develop its solutions for existing customers. These objectives are part of SWIFT’s overall SWIFT 2020 Strategy. Check out the SWIFT 2020 Strategy SlideShare for further details. I think this is interesting because many corporates are looking to implement a single global bank connectivity solution – and SWIFT is an obvious contender, but SWIFT is not a magic bullet.

Read the SWIFT article for full details. Following is my summary:

SWIFT 2020 Strategy:

Alain Raes, SWIFT Chief Executive for EMEA and Asia Pacific highlights:

• SWIFT is not just for large corporates – smaller corporates, i.e. those with an annual turnover of less than US$1 billion and less than US$0.5 billion are increasing – accounting for around half of the corporates that have joined since 2014
• Existing solutions will be enhanced with further:
  • Messaging solutions across payments, treasury, trade finance, securities and regulatory reporting
  • Development of BPO (Bank Payment Obligation) /TSU (Trade Services Utility), 3SKEY, SWIFTRef, MyStandards, Financial Crime Compliance Services
• SWIFT aims to expand outside of their traditional hubs of North American and Europe by encouraging corporate growth in the APAC (Asia Pacific) region
  • This will be supported by improving bank readiness and 7 dedicated corporate sales teams dotted around the APAC region
• Promotion of Alliance Lite 2 – SWIFT’s own cloud based connectivity solution

Andre Casterman from SWIFT corporate and trade markets group emphasises the need to digitise trade finance to enable greater process efficiencies. The digitisation according to Andre will enable big data analysis, banks to become more agile and regulatory compliance.

Marcus Treacher is Chair of the Corporate Advisory Group – these guys guide SWIFT’s corporate strategy & governance – and SWIFT Board member. Marcus explains how the Corporate Advisory Group keep their fingers on the pulse by running corporate-bank workshops where they seek to understand corporate pain points. They relays these themes back to the SWIFT board. Hmmm, interesting.

Marcus reiterates the earlier point about wanting to attract smaller corporates and the use of Alliance Lite 2 as a way of getting them on board.

The Devil Is In the Detail

This all sounds great, and it is still early days for SWIFT and their 2020 strategy.

The SWIFT 2020 strategy buzz-line is to “become the preferred secure network for multi-banked corporates globally”. That will be music to many corporates around the world, for security is a HUGE concern for companies large and small. But actually in the published article there was very little about security and the types of initiatives and measures that SWIFT will be offering in that regard.

For anyone in the payments space initiatives such as the development of 3SKEY, SWIFTRef, MyStandards sound great. But documentation, cost and cross-bank readiness are likely to hinder mass adoption.

SWIFT are actively partnering with different vendors to deliver various solutions. As the range of products increases and the partners they work with diverisfy, SWIFT need to be careful that they don’t undermine their own core competencies. For example, a data breach at one of their partners could significantly reduce confidence in SWIFT overall.

SWIFT still have some way to go with corporate on-boarding and ensuring consistency and standardisation at the banks. Arguably these are far from complete just in a single region. As SWIFT look to expand beyond their core business they will need to exercise caution, ensuring their product expansion does not cloud and dilute their core strengths. Add to this mix the fast changing global environment through the use of technology in the way we work, rest and play, the rise and rise of technology companies looking to exploit niche markets – and you have an exciting challenge for 2020!

Let me know what you think below…

The post Is the SWIFT 2020 Strategy Good Enough? appeared first on SEPA for Corporates.

I wasn’t one of the 8200 Sibos attendees in Singapore this year, so I looked to various other channels to get my daily dose of SWIFT and Sibos news. By the sounds of things there were some really interesting panel discussions (particularly around blockchain) and insights into various disruptive technologies and consumer demands. Finextra and Banking Technology provided sterling articles and video updates from the SWIFT conference. But for me Twitter provided a really interesting insight into all things Sibos. As i was reviewing the #Sibos and #Sibos2016 tweets some pretty cool information and observations were being shared. In this post i will share the top 5 tweets from each day based on the most retweeted Sibos tweets (at the time of writing!). Some interesting themes are revealed….

Please keep in mind the indicated Retweets were at the time of writing.

The Sibos Twitter Winners:

Based on the Sibos related Retweet analysis the following companies seem to be the most popular (in terms of volume of tweets and retweets) over the last 4 days:

The overall Winners for the most Sibos related retweets is…. drum roll….

• Ericsson M-Commerce ‏@EricssonMcomm
• Simon Taylor: @sytaylor
• and of course…. SWIFT – via @Sibos, @swiftcommunity and @Innotribe

Sibos 2015 – Monday 12th October

32 Retweets – Blockchain:

Standing room only for blockchain #innotribe session #Sibos2015 cc @Neal_X @obussmann @joyce pic.twitter.com/XQpW2Xf4tC

— Simon Taylor (@sytaylor) October 12, 2015

26 Retweets – Opening Plenary:

Piyush Gupta, CEO, DBS Group:”We are on the cusp of an Asian century”#Sibos 2015

— Deutsche Bank GTB (@TalkGTB) October 12, 2015

23 Retweets – Innotribe:

For all those who missed the #innotribe sessions so far – a summary of day one @Innotribe @Sibos pic.twitter.com/xcAkEYIOUA

— Devie Mohan (@devie_mohan) October 13, 2015

21 Retweets – Fintech:

So far, #Sibos #Innotribe looks like a rock concert of who’s who in financial services and fintech. Well done @petervan @swiftcommunity

— Bradley Leimer (@leimer) October 12, 2015

20 Retweets – Fintech:

MT @obussmann: My @CNBC interview live from @sibos #Sibos2015 http://t.co/cdaecSyFba #FinTech #UBSinnovate — UBS (@UBS) October 12, 2015

Sibos 2015 – Tuesday 13th October

86 Retweets – Internet of Things:

See the networked society as we see it #Sibos #iot http://t.co/GBwMl9ZAJU — Ericsson M-Commerce (@EricssonMcomm) October 13, 2015

26 Retweets – Banks:

Banks must “reinvent” themselves to succeed in the digital future http://t.co/8GpEjPOVNI #Sibos2015 #fintech pic.twitter.com/GzjbdChBCk — Anna Irrera (@annairrera) October 13, 2015

19 Retweets – Fintech:

Cathy Bessant: Financial institutions are #fintech companies, though we don’t always get credit for it. #Sibos pic.twitter.com/iCGugBgrVh — Bank of America (@BofA_News) October 13, 2015

17 Retweets – Real Time Payments:

12 Australian banks have agreed to adopt #ISO20022 for real-time payments (New Payments Platform) @standardsforum #sibos — Sibos (@Sibos) October 13, 2015

17 Retweets – Real Time:

Thanks for visiting today, #Sibos! Be sure to visit @Accenture at I38, @Earthport at K44, @volantetech at J28. pic.twitter.com/H97o8lDMYb — Ripple (@Ripple) October 13, 2015

 Sibos 2015 – Wednesday 14th October

22 Retweets – Innotribe:

And the winner is… @Hyperledger! Congratulations from the whole Innotribe team! #ISCFinale #Sibos pic.twitter.com/cWolJSHUid

— Innotribe (@Innotribe) October 14, 2015

19 Retweets – The Cloud:

Learn how Microsoft is helping financial institutions move confidently to a secure and private cloud. #SIBOS http://t.co/jSbAJACB4G — Microsoft Enterprise (@MSFTenterprise) October 14, 2015

15 Retweets – Fintech:

Why do banks need fintech hubs? Packed out session at @Innotribe @Sibos #Sibos2015 pic.twitter.com/zrPrAc6OHf — Level39 (@Level39CW) October 14, 2015

14 Retweets – Disruption:

Capgemini and @FirstData talking about #payments #disruption and how banks are to respond in the future – #Sibos http://t.co/D0gmoCbLQd — Capgemini India (@CapgeminiIndia) October 14, 2015

12 Retweets – Innotribe:

And the winner is… @Hyperledger! Congratulations from the whole Innotribe team! #ISCFinale #Sibos pic.twitter.com/cWolJSHUid

— Innotribe (@Innotribe) October 14, 2015

Sibos 2015 – Thursday 15th October

16 Retweets – Blockchain:

So much discussion on Blockchain @Innotribe @Sibos that I felt like sharing this pic.twitter.com/jtoI4R0w6n — Anju Patwardhan (@Anjupatwardhan) October 15, 2015

13 Retweets – Innotribe:

#pepper collected data from attendees #mood #age and #gender. Impressive! #robot #contextual information #Sibos pic.twitter.com/In7aR7lrfI — Innotribe (@Innotribe) October 15, 2015

13 Retweets – Fintech:

Customer, regulations, payments and robots: some of the discussions at @Innotribe #Sibos2015 #fintech @Sibos pic.twitter.com/HQAip9z2JW — Devie Mohan (@devie_mohan) October 15, 2015

12 Retweets – Gender:

Of 8,219 participants only 25% female participants &17% female speakers – the diversity dialogue needs to be continued #Sibos @Swift @Sibos

— Deutsche Bank GTB (@TalkGTB) October 15, 2015

12 Retweets – SWIFT:

Thank you all! We appreciate your continued support and we look forward to welcoming you to Geneva #Sibos #2016 pic.twitter.com/GplQlZvKYL

— Sibos (@Sibos) October 15, 2015

Sibos 2015

Judging by the tweets alone, it sounded like a very forward looking Sibos this year. The key and recurring themes seemed to be how to utilise block chain, fintech and the challenges and opportunities for incumbents and new entrants, the role of regulation and of course innovation.

If you were at Sibos i would love to hear your comments below – does the above capture the key themes from the conference?

The post The Top 20 Tweets from Sibos 2015 appeared first on SEPA for Corporates.

Last week, it was all happening at Sibos in Singapore. One of THE most talked about and retweeted events at Sibos 2015 was the opening plenary by Piyush Gupta – the Chief Executive Officer (CEO) of DBS Bank. I wasn’t at Sibos, but the social media buzz around Piyush was such that I felt like I needed to know what the guy was saying. Piyush Gupta delivered a very interesting opening plenary, and the intention of this post is to share with you the top 10 things that i noted as i watched Piyush’s speech.

1. Asia is ALIVE and KICKING

Despite the continued news coverage indicating a general slow down in the Asian economies, the reality is that Asia is nevertheless a flourishing region. Piyush goes a step further and suggests that “we are at the cusp of a…. Asian century”.

Piyush described how in Asia technology, disruption and change is more visible than anywhere else and is actually happening. China was THE recurring example during Piyush’s speech – describing how technology , disruption and change is happening in the country in a accelerated manner,

Piyush Gupta proposes that the battleground of  the (payments and financial) industry and future is being fought in Asia!

2. Notice the “Mega Trends”

Ignore the cycles, and pay more attention to the “mega trends” says Piyush, they reveal more interesting insights:

• 2000 – Asia (comprised of 10 countries) was 40% of US GDP
• 2010 – Asia was 70-80% of US GDP
• 20120 Asia will be 120% of US GDP

Piyush explains how this type of change is not a flash in a the pan! This phenomenon is based on something very unique to Asia. It’s…

3. A Unique Demographic

Asia comprises a third of the worlds land mass, but it contains 50-60% of the world population. The population profile is pretty interesting with the average age in Asia is 28. In the US the average age is 36 and in Europe, 39.

According to Piyush Large numbers of people, particularly of young people naturally creates a dynamism and chemistry that will propel Asia from being a factory of the world to being THE marketplace of the world

Asia is going through its equivalent of the Marshall Plan (the post World War II Europe Recovery Plan). Urbanisation and infrastructure development will together create the second big driver of growth in the region. Consumption demand and affluence in Asia continues to grow, which in turn creates new and evolving opportunities.

4. The Integration of Asia

Piyush explained that there is unlikely to be a European Union type arrangement in Asia, but there will be a coming together of ideas. He referred to this coming together among “private” Asia. That is individuals and consumers in Asia that are coming together very rapidly.

Piyush highlighted how there is a new wave of multi-nationals in Asia, particularly in China and India. He went on to explain how multinationals in Asia were originally a smaller part of a European of North American conglomerate, that is no longer the case. Now the multinationals are from the region and closely integrated to the region. This is facilitating and integrating trade and capital flows in the region.

5. China is changing, but don’t worry…

Piyush Gupta outlined the frequently highlighted media concerns and presented a counter-argument:

The Chinese economy is slowing down, BUT…

• China growth has decreased from double digit growth to single digit growth. But highlights how 6-7% growth rates are still pretty impressive, especially when compared with other major economies such as Germany
• China is operating 2 economies:
  • Industrial economy which is growing a modest rates
  • Retail economy, this is the most interesting and enjoying double digit growth – for example:
    • Apple growth in the first 6 months of this year was 75%, making China for the first time a bigger market than the US
    • Nike announced a 45% growth rate in the first 6 months of this year

6. …Transition results in Disruption

• China is transitioning from a manufacturing to a service based economy and from a administered to a market driven economy.
• Transition results in disruption. This transition according to Piyush creates challenges in different parts of the economy. In the short term there will be challenges, the medium will be good for China, the region and the world
• The scale of China’s debt is bad but it is no worse than debt in the US
  • China has 3.5 trillion dollars in reserves has the capacity to abosrb any pains that it may encounter
• China will continue to be a major force in the region

7. Don’t give up on Asia yet

Piyush Gupta gave the following overview for Asia:

• Asia has transformed from a current account deficit to a current account surplus
• External debt to GDP of the crisis 4 countries in 1998 was 67-68%, now it is in the mid-teens
• Corporate debt has decreased, the banking system is more resilient
• Asia today is much stronger than it has been in the past
• The last 35 years have seen several crises: recession (1985), Asian crisis (1997), SARS epidemic (2003), the global financial crisis (2008) — this has to be expected and part and parcel of being an emerging market region” says Piyush

8. A Population of Digital Natives

For me this was the interesting bit, Piyush described Asia as a technology savvy population and here is why (according to Piyush):

• 50% of worlds internet population is in Asia
• Indonesia is the number 1 country for Twitter with 15 tweets per second and number 1 country for mobile Facebook users
• India is the number 2 country for Facebook, and will number 1 by 2017
• China has 350 million smartphone users, more than the population of US
• Alibaba has created their version of cyber Monday in Asia, last year they sold the equivalent of $9.4 billion of goods in 1 day, the US e-commerce sales were $2.6 billion – Alibaba did 4 times what the US did on 1 day through their own initiative in China

9. Chinese companies are making a profound impact on the industry

Piyush continued to highlight developments in China, and as he did so the numbers were frankly incredible. Piyush outlined how the most significant changes in the payments space are happening in China:

• Suggesting that “the biggest payments company in the world has to be AliPay”. AliPay is to Alibaba what Paypal was to Ebay
• AliPay has 300 million users, with 80 million transactions per day
• Alibaba has a online money market fund called Yu’ebao, in 8 months it raised $80 billion from 80 million customers
  • In 8 months Yu’ebao became 4th largest money market mutual fund in the world with zero branches, zero distribution platform, it is totally electronic and gained 100 million customer in 1 year
•  China’s P2P lending industry by the number of players, value and size is bigger than US and UK’s combined
• Know Your Customer – the Chinese online bank WeBank  uses online voice and facial recognition to do KYC for all bank accounts

Piyush described how Jamie Dimon talked about “Silicon Valley is coming”, Piyush Gupta offered an alternative that “the Chinese are here, not coming”!

10. Piyush Gupta – The Opportunity for Incumbents

Piyush Gupta finished up by making some interesting comments reflecting on the opportunity for the industry, explaining how things are changing from online to mobile. Piyush highlighted that in the past you physically went to the bank or to to your desktop to access your bank. Now through mobile you take the bank and the functions it provides with you. As a result the relationship changes – when and where the interaction with the bank and payments happen is totally transforming the industry.

Very interestingly Piyush describes how this isn’t disruption, rather it is transformation. Piyush argues this is a important distinction since “disruption assumes the end of the incumbent, transformation assumes the incumbent can make a change”.

Piyush ended up saying how the best people to navigate all of these changes and developments are incumbents. Particularly because people trust banks, the way banks manage risk, and leverage the power of the network – these according to Piyush are key strengths of the industry.

Now there’s food for thought…

The post Piyush Gupta on Growth, Decline & Disruption in Asia appeared first on SEPA for Corporates.

Anybody that is implementing the PAIN.001 format needs to read this! Sometimes when you are looking to update or implement a new payments format it is difficult to know where to start. Add to this the different variety of payment formats, differing bank proprietary formats and requirements, country specific requirements, technical jargon, the squeeze on limited resources both from the business and from the IT function, a often fast approaching deadline and very soon you find yourself wondering what to do…?!?!?!

Well this is where the CGI group at SWIFT can help. In this post, I will provide a very high level guide to what you need to know and what you need to do to get started with a new payment format implementation.

What is CGI ?

CGI stands for Common Global Implementation and is a collection of people from both the financial (banks) and corporate world. CGI is supported by SWIFT in order to promote the adoption of the ISO20022 financial messaging standards, and to simplify the implementation of these ISO 20022 messages.

What is ISO 20022?

ISO 20022 is an international standard used to simplify financial messaging. ISO20022 enables you to utilise a messaging format that can be used globally.

What is a PAIN.001 Format?

The PAIN.001 (Payments Initiation) format is just one of the messages within ISO 20022 message set

My bank has a PAIN.001 Specification, I’m good….

Well, kind of! You could follow and develop the PAIN.001 format according to the specification provided by the bank. Or you could follow the CGI PAIN.001 format, which has been widely adopted by most of the major banks around the world.

Ok, so where can i get more information on the work CGI are doing?

The best place to go is to the CGI Introduction to the Working Groups – here you can see all of the initiatives that the CGI group are working on. From this page you will see that Payments Initiation is just one of the many focus areas. Other focus areas include direct debits and bank statements.

Take me to the PAIN.001 Format Stuff…

You can find the PAIN.001 format information at the CGI Resource Centre. You need to click on the Credit Transfers / Payments Status Work Group (WG1) link, which will open up access to view further documents

Wow, which PAIN.001 document do i need to read?

To get started i would suggest that you read the following excel spreadsheet documents:

• Credit Transfer Base Template MIG – Approved
  • This highlights all of the tags that you need to populate in your payment file (the PAIN.001), the rules that you need to adhere to, with indication of optional, mandatory and conditional fields
  • The important thing to note is that is it a PAIN.001.001.03 – or for short, PAIN.001 v3
• Status Report Base Template MIG – Approved
  • This indicates how the bank will populate the Payment Status Report (PAIN.002) which will inform you of the processing status (at the bank) of the Payment File (PAIN.001) that have submitted
  • This is the PAIN.002.001.03 or PAIN.002 v3
• Credit Transfer Appendix B – Country Specific Data Requirements – APPROVED
  • This indicates which countries have adopted the above mentioned Credit Transfer Base Template, and has details of any country specific requirements

3 Things to Keep In Mind….

The above specifications:

• Have captured requirements for payments processing GLOBALLY – see if the country that you’re implementing the payment format is in the above list
• Cover both domestic ACH payments and urgent wire payments
• Always check with your bank that they support whatever you’re doing – the banks may have some slight variations!!

What is the Point of the CGI PAIN.001 Format?

The CGI PAIN.001 format will help you develop a standardised payment format (PAIN.001) that can be developed once and used in many countries, and with multiple banks. Rather than developing a new payment format with every bank and in different ways in a given country- the CGI PAIN.001 format gives you the ability to standardise the payment format and use it with some “minor changes” across multiple banks and countries.

It is important to understand that the CGI PAIN.001 format will need to be modified to adhere to any specific country, payment type or local clearing requirements. But once created, you will have a great start point for any payments interface.

Hope that helps!!!

The post A Quick Intro to Implementing the CGI PAIN.001 Format appeared first on SEPA for Corporates.

For anybody interested in payments and SWIFT, the SWIFT announcement last week of a Global Payments Innovation initiative was hardly a bombshell. In fact with all of the hype around fintech companies eating up incumbents, and the need for traditional financial institutions to become more innovative and attentive to customer demands you could argue that SWIFT are playing catch up. Anyway, what surprised me was the widespread attention this particular announcement received – so in this post i will go through a quick Q&A of the SWIFT Global Payments Innovation initiative….

What is the SWIFT Global Payments Initiative?

The global payments initiative will improve payments processing for corporates by providing better:

• Same day access to funds
• Visibility of fees
• End to end payment visibility
• Remittance information to suppliers

Who is the SWIFT Global Payments Initiative targeted at?

In a word, corporates! Its worth noting that the initiative is initially targeting business-to-business payments with participating banks. It would be really good to get a list of participating banks, and in which geographies they are participating…

When will the SWIFT Global Payments Initiative go live?

The announcement says early 2016, and indicates that it will be a pilot. I am guessing that means a couple of banks in a region…?!?! Look out for SWIFT press releases or watch this space for more information….

What is the purpose of the Global Payments Initiative?

According to SWIFT it will:

• Focus on cross border payments…
• Help corporates with their cross border payments processing – by providing real time payment status monitoring
• Improve supplier relationships – for example by providing better remittance information
• Enable treasury efficiencies – by improving liquidity
• Improve speed and bank payment processing – through the introduction of Service Level Agreements (SLA’s)

Why is this Global Payments Initiative different?

This is the interesting part. So in order to deliver this ‘mainstream’ solution SWIFT are:

• Working with Innotribe – the innovative arm of SWIFT that are doing all of the funky / sexy stuff
• Focusing on cross border payments – which let’s face it, is often forgotten about
• Introducing SLA’s to cross border payments – this will bring a defined service level to cross border payments and make the banks –  correspondent / intermediary – accountable
• The Technology being used – the press release talks about real time payment tracking, peer to peer messaging and most importantly blockhain….

Whhaaattt? Blockchain and SWIFT….?

Yeah! The SWIFT banking markets man Wim Raymaekers mentions blockchain in the press release and this has kicked off a lot of discussion! We don’t know the juicy technology details driving the global payments innovation initiative, but the mere mention of blockchain has resulted in various authorities offering their views. Without a doubt, the distributed ledger comment has attracted significant attention from peeps – this is what they’re saying…

• Check out a mix of views presented by The Coin Telegraph – ranging from applause to caution around SWIFT’s ‘adoption’ of the distributed ledger 
• The International Business Times talks about the ying and yang between a centralised and decentralised ledger system and the challenges for banks to adopt such a technology
• CryptoCoinNews considers the varying capabilities between banks, and the global compliance challenges presents by blockchain
• Silicon Angle talk about the time it will take for an organisation like SWIFT to implement blockchain, and the challenges they face with other more nimble and innovative startups such as Ripple getting into this space
• FinExtra provide a very interesting perspective questioning who will be the middleman of the future….
• The International Business Times talk about Ripple, Securities Settlements and the future of KYC

If you’re still reading, i would LOVE it if you shared this through LinkedIn….

The post What is the SWIFT Global Payments Innovation Initiative ? appeared first on SEPA for Corporates.

Two of the most popular posts on this blog are the Structure Of A SWIFT Message, Explained and the Difference between a SWIFT ACK and SWIFT NACK. Many of the readers of those posts have asked if i could do something similar detailing the SWIFT MT101 format. In this post, the idea is to give you a quick taster of the SWIFT MT101 format and request that you follow up on the specific details with your target bank. Let’s jump straight into the MT101 format….

What is a SWIFT MT101 Message?

The SWIFT MT101 message is a request for transfer, enabling the electronic transfer of funds from one account to another. Funds are transferred from ordering customers account to a receiving financial institution or account servicing financial institution. For us right now, the important thing to note is that the message format that enables this transfer is the SWIFT MT101 format.

Valid SWIFT MT101 Characters:

The following SWIFT character set is permitted in the SWIFT MT101 message:

a b c d e f g h i j k l m n o p q r s t u v w x y z
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
0 1 2 3 4 5 6 7 8 9
/ – ? : ( ) . , ‘ + { }
CR LF Space

Keep in mind that the:

• Curly brackets {} cannot be used in the message, only as delimiters to identify the different SWIFT structure blocks
• The dash “-” should not be used as the first character on any line

SWIFT MT101 Format:

General Information:

Tag 20 – Sender Reference:

• Mandatory
• Tag is shown as :20:
• 16 characters

Tag 21 – Customer Specified Reference

• Optional
• Tag is shown as :21R:
• 16 characters

Tag 28D – Message Index / Total

• Mandatory
• Tag is shown as :28D:
• 5n/5n

Tag 50C or 50L – Instructing Party

• Optional
• Tag is shown as :50C: or :50L:
• Depends on which reference is used 50C (BIC) or 50L (35 characters)

Tag 50F or 50G or 50H – Ordering Customer

• Optional
• Tag is shown as :50F: or :50G: or :50H:
• Ordering Customer
• Depends on which reference is used 50F , 50G or 50H
  • :50F:
    • 35 characters (account number)
    • 4 x 35 characters (name and address)
  • :50G:
    • /34 characters (account)
    • BIC (8 or 11 characters)
  • :50H:
    • /34 characters (account)
    • 4 x 35 characters

Tag 52A or 52C – Account Servicing Institution

• Optional
• Tag is shown as :52A: or :52C:
• Depends on which reference is used 52A or 52C
  • 52A:
    • BIC (8 or 11 characters)
  • 52C:
    • /34 characters

Tag 51A – Sending Institution

• Optional
• Tag is shown as :51A:
• BIC (either 8 or 11 characters)

Tag 30 – Requested Execution Date

• Mandatory
• Tag is shown as :30:
• YYMMDD

Tag 25 – Authorisation

• Optional
• Tag is shown as :25:
• 35 characters

Transaction Details:

Tag 21 – Transaction Reference

• Mandatory
• Tag is shown as :21:
• 16 characters

Tag 21F – F/X Deal Reference

• Optional
• Tag is shown as 21F:
• 16 characters

Tag 23E – Instruction Code

• Optional
• Tag is shown as :23E:
• 4 character code followed by up to 30 optional characters
  • Only the following 4 letter codes are valid: CHQB, CMSW, CMTO, CMZB, CORT, EQUI, INTC, NETS, OTHR, PHON, REPA, RTGS, URGP
  • If you choose to indicate characters after the 4 letter code, you should indicate it as follows :23E:URGP/ITSGETTINGLATE

Tag 32B – Currency / Transaction Amount

• Mandatory
• Tag is shown as :32B:
• 3 character currency code (ISO 4217 currency code) followed by 15 digits representing the amount

Tag 50C or 50L – Instructing Party

• Optional
• Tag is shown as :50C: or :50L:
• Depends on which reference is used 50C or 50L
  • :50c:
    • BIC – 8 or 11 BIC reference
  • :50L:
    • 35 characters for account reference

Tag 50F or 50G or 50H – Ordering Customer

• Optional
• Tag is shown as :50F: or :50G: or :50H:
• Depends on which reference is used 50F, 50G or 50H
  • :50F:
    • 35 characters (account number)
    • 4 x 35 characters (name and address)
  • :50G:
    • /34 characters (account)
    • BIC (8 or 11 characters)
  • :50H:
    • /34 characters (account)
    • 4 x 35 characters

Tag 52A or 52C – Account Servicing Institution

• Optional
• Tag is shown as :52A: or :52C:
• Depends on which reference is used 52A or 52C
  • 52A:
    • BIC (8 or 11 characters)
  • 52C:
    • /34 characters

Tag 56A or 56C or 56D – Intermediary

• Optional
• Tag is shown as :56A: or :56C: or :56D:
• Depends on which reference is used 56A or 56C or 56D

Tag 57A or 57C or 57D – Account with Institution

• Optional
• Tag is shown as :57A: or :57C: or :57D:
• Depends on which reference is used 57A or 57C or 57D
  • 57A:
    • BIC (8 or 11 characters)
  • 57C:
    • /34 characters
  • 57D:
    • /34 characters (account)
    • 4 x 35 characters

Tag 59 or 59A – Beneficiary

• Mandatory
• Tag is shown as :59: or :59A:
• Depends on which reference is used 59 or 59A
  • :59:
    • / 34 characters (account number)
    • 4 x 35 characters (name address)
  • :59A
    • / 34 characters (account number)
    • BIC – 8 or 11 character

Tag 70 – Remittance Information

• Optional
• Tag is shown as :70:
• 4 x 35 characters
  • The following codes can be used : /INV/ , /IPI/ , /RFB/ , /ROC/ /TSU/

Tag 77B – Regulatory Reporting

• Optional
• Tag is shown as :77B:
• 3 x 35 characters
  • Line 1: 8 character code/country/text
  • Line 2-3 : additional text
  • Valid codes:
    • BENEFRES – Residence of beneficiary customer
    • ORDERRES – Residence of ordering customer

Tag 33B – Currency / Original Ordered Amount

• Optional
• Tag is shown as :33B:
• 3 character currency code (ISO 4217 currency code) followed by 15 digits representing the amount

Tag 71A – Details of Charges

• Mandatory
• Tag is shown as :71A:
• 3 character code
  • Valid codes:
    • BEN – All transaction charges to be picked up by the beneficiary customer
    • OUR – All transaction charges to be picked up by the ordering customer
    • SHA – Transaction charges are shared

Tag 25A – Charges Account

• Optional
• Tag is shown as :25A:
• 34 characters

Tag 36 – Exchange Rate

• Optional
• Tag is shown as :36:
• 12 digits

SWIFT MT101 Example:

Following is a simple example of a single MT101 message paying EUR 123.45 from account GB12SEPA12341234123412 at BANKGB01XXX to supplier (James Bond), in his account GB12SEPA12341234123498 at BANKGB02XXX. The remittance information indicates it is a payment for SUPPLIER-INV-REF1

:20:123456789
:28D:1/1
:50H:/GB12SEPA12341234123412
ORDERING CUST NAME
ORDERING CUST ADDR LINE 1
ORDERING CUST ADDR LINE 2
ORDERING CUST ADDR LINE 3
:52A:BANKGB01XXX
:30:160211
:21:11FEB2016INV1
:23E:URGP
:32B:EUR123,45
:57A:BANKGB02XXX
:59:/GB12SEPA12341234123498
JAMES BOND
SUPPLIER ADDR LINE 1
SUPPLIER ADDR LINE 2
SUPPLIER ADDR LINE 3
:70:SUPPLIER-INV-REF1
:77B:/BENEFRES/GB
:71A:SHA
-}

Hope that helps!

The post Quick Guide to the SWIFT MT101 Format appeared first on SEPA for Corporates.

Yesterday i attended the SWIFT Business Forum, at Tobacco Dock, in London. It was a gloriously sunny day but really hectic with lots of really interesting sessions and discussions around SWIFT, fintech, blockchain, payments and even a ‘lively’ debate on Brexit. In fact there were so many parallel sessions that you had to make some difficult choices, which meant missing out on some topics. So with that in mind, i turned to Twitter to see what people were saying about those other sessions that i was unable to attend. What i found were a collection of really interesting tweets from the SWIFT Business Forum – which i thought you maybe interested in.

For in-depth details check out the Finextra and BankingTech overview. For a quick flavour, check out the following…

1. SWIFT Business Forum – Opening Keynote:

“Within 10 years, we won’t be talking about digital as its own sector. And #FinTech won’t be a separate focus.” – @eileentso at #BFLondon

— SWIFT (@swiftcommunity) April 20, 2016

2. SWIFT Business Forum – On Fintech Start-Ups…:

Dispatch from #BFLondon this morning— @bankofengland‘s Andrew Hauser says: “Central banks can’t afford to be Uber’d” https://t.co/t1zk1RpZeR — Oscar Williams-Grut (@OscarWGrut) April 20, 2016

3. SWIFT Business Forum – What will happen to Payments:

What’s going to change next 5 years in payments? transparency, speed, adoption, convenience #BFLondon — Peter Vander Auwera (@petervan) April 20, 2016

4. SWIFT Business Forum – The Elephant in the Room – APIs:

#BFLondon APIs / open banking panel. “When you use the word open, they get nervous about security.” A challenge to overcome. — Antony Peyton (@TonyBankingTech) April 20, 2016

5. SWIFT Business Forum – SWIFT Distributed Ledger Paper

SWIFT position paper on Distributed Ledger technology > here is the link #BFLondon https://t.co/kAUQHZ6lbR

— Peter Vander Auwera (@petervan) April 20, 2016

6. SWIFT Business Forum – Blockchain:

“Blockchain is a revolution in reconciliation not in payments” @sytaylor #BFLondon — Peter Vander Auwera (@petervan) April 20, 2016

7. SWIFT Business Forum – Another Blockchain Tweet

“It’s not THE #blockchain. We are not there yet. Right now it is many chains.” – Good point from @sytaylor @Barclays #BFLondon — Innotribe (@Innotribe) April 20, 2016

8. SWIFT Business Forum – There were others, but this is my last one

The industry could reduce costs by merely consolidating back offices. #blockchain isn’t integral to that. Emperor’s new clothes. #bflondon — Virginie O’Shea (@virginieoshea) April 20, 2016

9. SWIFT Business Forum – Global Payments Innovation Initiative

SWIFT:”Swift global payments innovation initiative is about business rules for better collaboration” #BFLondon pic.twitter.com/eqjHBX10Cq

— Deutsche Bank GTB (@TalkGTB) April 20, 2016

10. SWIFT Business Forum – The Irony, Fintech Innovation Award by the SWIFT Institute

#BFLondon Cannot believe the prize for FINTECH innovation competition in the UK is a CHEQUE https://t.co/zyx9IPPydT — liz oakes (@OakesLiz) April 20, 2016

11. SWIFT Business Forum – Microphone & Drink Issues

Was the person in charge of microphones also handling the organisation of closing drinks? Great event otherwise. #BFLondon

— Jim Bee (@SwanageClimber) April 20, 2016

The post 11 Kick-Ass Tweets From the SWIFT Business Forum London appeared first on SEPA for Corporates.

Along with 1300 people last week, i visited the SWIFT Business Forum in London – it was a great day with a number of well informed panel discussions and insights into the hot topics dominating the industry. My main focus was of course payments. There are plenty of overviews from the various sessions at the SWIFT Business Forum in London, one of the most detailed is the Finextra Swift Business Forum London 2016 – Live blog. Over the bank holiday weekend i was looking through the rough notes i made from the SWIFT Business Forum, and in this post i thought i would share some of the themes.

1. SWIFT Business Forum – Build The Future

In the introduction to the day Javier Pérez-Tasso, SWIFT’s Americas and UK region Chief, announced the theme of the day was “Build the Future”.

Javier talked about:

• Compliance and resilience in the wake of growing cyber threats and endless regulation
• Innovation - focusing on how digitalisation is driving the Fourth Industrial Revolution
• Fintech - on the emergence of the UK and in particular London as a dominant global fintech hub
• Infrastructure - highlighting how sexy innovative retail payments solutions are being supported by some pretty old systems, and how some underlying infrastructure changes are happening that will support the front end innovation
• Legacy – and the challenges between adapting and building from scratch

He finished with a nice quote by Gordon Moore, Intel founder, from 1965 where he talked about the pace of change – “Change has never happened this fast before, and it will never be this slow again. This shouldn’t come as a surprise”.

2. Eileen Burbridge - British Treasury’s “special envoy” for Fintech

This lady was pretty impressive, and ‘performed’ particularly well given the various microphone issues. I made the following notes from Eileen’s opening keynote:

• Eileen talked about dressing down for the occasion “to look less corporate” – it kinda reminded me of a post i wrote about looking innovative – no offense Eileen..
• She also talked alot about sparking – sparking technology, sparking conversation and was very engaging
• The financial sector has always been at the forefront of technology and innovation
• To understand that both technology and innovation are not new to financial services, but to note the difference in the industry right now are the newcomers – in particular the diverse profile of the newcomers – from various sectors, established and emerging markets, new user groups (various ages/social and economic profiles) — and what is driving these newcomers — technology!
• Within 10 years we will not talk about digital as a distinct sector, rather everything around us will intrinsically be digital

3. SWIFT Business Forum - Plenary Panel – Build The Future

Next up was a really interesting panel debate featuring:

• Andrew Hauser – a risk assessment director at the Bank of England
  
• Gottfried Leibbrandt – the chief exec at SWIFT
• Marion King – payments director at RBS
• Blythe Masters – chief exec of Digital Asset Holdings – a blockchain company
• Daisy McAndrew – a journalist

The guys made some noteworthy points:

Marion – Payments need to be made safely, securely and in real time

• Instant payments ain’t anything new, Faster Payments have been available in the UK since 2008 – I didn’t know that!
• BACS was launched in 1968 – whaaatt, BACS is 48 years old….!!
• Regulatory change and Legacy will drive change
• Her mantra was moving money safely, securely and in real time

Andrew – “We Cannot Afford to be Ubered”

Presented the banks point of view, and made an analogy between banks and a building site:

• Investors are needed to help transform a building site
• Architects are responsible for the vision, design and stability of the construction
• Plumbers are responsible for the underlying infrastructure, the drains and water supply to the site
• Health and safety inspectors must protect and secure the building site, its employees and visitors

With that analogy in mind, Andrew explained how:

• Change is going to happen whether banks like it or not and….
• A lack of change is dangerous and harmful to the overall financial system and in fact creates instability
• There are 5 trends from a traditional bank perspective that need to be addressed:
  • Resilience – financial providers, such as banks, need to be stable
  • Convergence – how to enable flexibility that can manage the merger of retail, domestic, international demands
  • Real time – many central banks right now operate 5 days a week – consumer demand is 24/7
  • Data and analytics – how can data be used safely and in a trusted manner
  • Access – who should have access to the financial system

Made some great points about:

• Finding the right conditions and applications for technology. Explaining how contactless technology is over 12 years old, but it was only when the right application was found (Transport for London) did the technology start to gain traction and widespread popularity
• How often what starts as technology questions quickly grow into wider questions about the industry and the ability to do things in news ways

Blythe – “Representing the industry eating everyone’s lunch”

Blythe nicely set the scene of the current financial environment – depressed revenues, volatility, illiquidity, rising costs due to the regulatory burden, unpredictable market conditions, new technologies attacking incumbents and increasing cyber-threats. With this as the back drop, Blythe proposed that using and enhancing a shared financial infrastructure was actually a really interesting proposition.

She acknowledged that changing the wheels of a fast running bus is difficult but explained how change could happen through Regulation, Network Effect and Collaboration which would enable a framework for change

In response to a question about banks not understanding technology and the fintech revolution Blythe explained that is oversimplifying the situation. She went on to say that Goldman Sachs employs around 10,000 engineers and that you could say that Goldman Sachs is a financial technology company!

On why there is so much hype around fintech, Blythe explained that the “intensity of the focus is because of the intensity of the need”. Nice!

Gottfried – “3 ways to go broke: Gambling, Women & Engineers”

Gottfried explained how in and amongst all of the disruption:

• The underlying business processes has changed very little
• Technology is expensive, especially if you get it wrong – and that is where he used the above quote about 3 ways to go broke!
• Infrastructure – often new infrastructure is added alongside the old infrastructure – he gave the example of airports citing the current arguments around expanding Heathrow Airport versus creating an entirely new airport elsewhere – and the similarities with banking

4. SWIFT Business Forum – The Future of Payments

This was another panel debate with:

• Wander Rutgers, Head of Banking, Transferwise
• Carlos Sanchez, CEO, Orwell Group
• Richard Martin, Head of Cash Management, Barclays
• Matt Loos, Executive Director and Senior Product Manager, Treasury Services, JP Morgan
• Christian Sarafidis, Chief Marketing Officer, SWIFT

Key Payment Trends

Carlos kicked off by talking about converging trends:

• Customer frustration with payments – for example international payments
• Payment simplification – the need for payments to disappear, be seamless – perhaps be embedded into something
• Bank stress – lack of liquidity, rising regulatory and compliance costs, the cost of maintaining existing rails and the need to build new rails

Wander spoke about a perfect storm for fintech companies:

• The failure of big banks to innovate particularly when it comes to international payments
• Payments regulation has enabled newcomers to enter the market
• Customers are ready to look beyond their traditional banks
• TransferWise is able to collaborate and work with banks to deliver a simpler solution

Wander questioned “if you can send an email to Gautemala, you should be able to send a payment there too”

Richard welcomed competition from fintech companies, and believed that this will ultimately drive the banks forward:

• But at the same time spoke about collaboration between banks and fintech companies
• Continued the theme about seamless payments by stating that “payments will be a hygiene factor”
• Barclays are evolving their products – for example Pingu started life as a Person to Person mobile payment application and is now business to customer and business to business

Matt pointed out the need for integration:

• There are several – around 50 – initiatives to build new rails – such as faster payments which is great. But they serve a domestic market and the challenge is how to link these so that they become cross border
• Through international / cross border ties, the industry can grow
• Often telecoms is highlighted as an industry where collaboration has happened between different partners, but Matt explained that there is a huge difference between payments and telecoms – if a phone call is cut off, you redial and continue; if a payment goes missing, you have a problem!

Christian asked how the industry could work better together, here is how the panelists responded:

• Matt – banks need to share information between each other in a more secure way. His mantra was together we are stronger!
• Carlos – highlighted how collaboration within the telecoms industry enables you to make a telephone call anywhere – banks need to do the same. Also, Regulation – without making it mandatory, nothing changes!

The Need for Start Ups…

On why we need startups, the panel agreed that start ups:

Richard acknowledged:

• That banks provide a broad spectrum of services whereas fintech companies utilised technology to provide laser focus in niche areas
• Start ups force banks to innovate
• Collaboration with fintechs keeps the customer happy!

Wander explained:

• That startups are lean, technology focused and disciplined competely to give the customer what they need
• How the culture drives start ups – a complete focus on delivering a innovative product, continuous improvement of the product, serving the customer right way from the shop floor through to the CEO – this culture is difficult for banks to replicate

1 Thing That will Change in Payments in the next 5 Years:

• Matt – Transparency
• Richard – Speed – the move to real time and anytime, any place, anywhere
• Wander – Adoption of people using non-banks for financial services will become the norm
• Carlos – Convenience – e.g one time onboarding will give access to multiple services

The post My Notes from the SWIFT Business Forum in London appeared first on SEPA for Corporates.

By now most people are aware of the reports of a second third SWIFT related hack. I was reading about the various reactions to the hacks and it is pretty alarming stuff. The Vietnam hack involves a SWIFT Service Bureau which for many corporates is a scary prospect, because many of them are also using SWIFT service bureaus to manage their connections to the SWIFT network. This is the world we’re in right now, and I’m pretty certain these types of attacks will increase. How SWIFT, corporates and financial institutions deal with the threat is the bigger question. For now, lets take a step back and take a look at the emerging news stories that reveal the key details:

SWIFT Security:

Firstly, a quick word on SWIFT and security. Clearly, security is a big deal for SWIFT, they pride and distinguish themselves from other connectivity solutions based on world class security and reliability – and there is a perception that the end to end SWIFT solution is 100% secure. Dare i say it there is complacency, and the recent events highlight the fact that the solution is only as strong as its weakest link:

• SWIFT‘s tag line is “The global provider of secure financial messaging services”
• SWIFT talk a lot about their “uncompromising approach to information security”
• When it comes to security, the SWIFT motto is “Failure is Not An Option” (FNAO)
• Many financial institutions have at some point or other been subjected to some kind of cyber attack, data breach and/or fraudulent payments
• The SWIFT network that connects banks and corporates is therefore a target and will be vulnerable, as are the institutions that use the SWIFT network

Known Hacks Involving the SWIFT Network:

In the order that they have been revealed:

• February 2016 – Bangladesh Bank (Bangladesh)
  • Attempted heist value: $951 million
  • Successfully transferred amount: $81 million
• December 2015 – TP Bank (Vietnam)
  • Attempted heist value: $1.1 million
  • Successfully transferred amount: 0
• January 2015 – Banco Del Austro / BDA (Ecuador)
  • Attempted heist: $12 million
  • Successfully transferred amount: $9 million

SWIFT Related Hacks – Breaking News Stories:

There are of course lots of articles covering the attacks. The following are the key stories that broke the news along with some what i found interesting insights:

May-2016:

• 20-May-2016: Reuters - Special Report: Cyber thieves exploit banks’ faith in SWIFT transfer network
• 20-May-2016: Wall Street Journal - Alarmed Swift Urges Banks to Report Hacking Attempts
• 19-May-2016: Wall Street Journal - Now It’s Three: Ecuador Bank Hacked via Swift
• 19-May-2016: Reuters - Exclusive – UK banks ordered to review cyber security after SWIFT heist
• 19-May-2016: Reuters - Top Democratic senator probes SWIFT, NY Fed about Bangladesh heist
• 19-May-2016: Reuters - Bangladesh Bank official’s computer was hacked to carry out $81 million heist: diplomat
• 18-May-2016: Reuters - U.S. banks scrutinize SWIFT security after hacks: reports
• 17-May-2016: Reuters - Slovenian bank was recipient named in failed Vietnam cyber-heist
• 17-May-2016: The Wall Street Journal - J.P. Morgan Reduced Some Employees’ Access to Swift System in Recent Weeks
• 15-May-2016: Reuters - Vietnam bank says interrupted cyber heist using SWIFT messaging
• 14-May-2016: Seeking Alpha - Swift Is Hacked Again. The Bitcoin/Blockchain Fat Lady Sings.
• 14-May-2016: Reuters - Bangladesh Bank heist similar to Sony hack; second bank hit by malware
• 13-May-2016: BAE Systems - CYBER HEIST ATTRIBUTION
• 13-May-2016: SkyPort Systems - FIVE NECESSARY IMPROVEMENTS TO THE SWIFT (NOT TAYLOR SWIFT) SECURITY MODEL
• 9-May-2016: Reuters - Exclusive – Technicians from SWIFT left Bangladesh Bank exposed to hackers – police
• 12-May-2016: New York Times – Once again, thieves enter SWIFT financial network and steal

April-2016:

• 26-Apr-2016: Bloomberg - Swift Hack Is a Story of Globalization and Poverty
• 26-Apr-2016: Reuters - Exclusive: SWIFT warns customers of multiple cyber fraud cases
• 25-Apr-2016: BAE Systems – Two Bytes to $951
• 25-Apr-2016: Reuters - Bangladesh Bank hackers compromised SWIFT software, warning issued

SWIFT Press Releases:

Since the stories broke, SWIFT have issued a number of SWIFT security statements:

• 20 May 2016: SWIFT customer communication: Cooperating on cyber-security
• 13-May-2016: SWIFT Customer Communication: Customer Security Issues
• 10 May-2016: Joint Statement: Federal Reserve Bank of New York, Bangladesh Bank and SWIFT
•  9-May-2016: SWIFT statement on recent allegations
• 25-Apr-2016: SWIFT comments on malware reports

The post A News Bulletin Overview of the SWIFT Related Hacks appeared first on SEPA for Corporates.

You may have guessed by now that i am pretty interested in SWIFT, and was particularly keen to hear what the SWIFT CEO (Gottfried Leibbrandt) would cover in a speech he gave to a Financial Services Conference in Brussels yesterday. Following the revelations from the recent SWIFT related hacks there was a greater degree of anticipation from the worlds media, financial institutions and corporates (i dont think that is over-hyping it!). As i read the speech, i made the following notes:

1. Cyber Security Keeps the SWIFT CEO Awake at Night

Clearly Gottfried is keen to stress the importance of security, and that is the first thing the SWIFT CEO talks about. Describing how the cyber risk is the main thing that keeps him up at night!

The multi-billion dollar value of transactions flowing through the SWIFT network can only happen if their is trust in SWIFT – which according to Gottfried requires the network to have paramount Confidentiality, Integrity and Availability.

2. Cyber Security is part of SWIFT’s DNA

Gottfried makes a couple of interesting points explaining how:

• Cyber security is not an after-thought at SWIFT – which, lets be honest is often the case
• Cyber security is not just about systems (hardware and software), but about “people, processes, procedures and checks”
• The SWIFT mantra is FNAO – “Failure is Not An Option”

3. The SWIFT Network Has NOT Been Compromised

Gottfried repeated the standard press release verbiage that the SWIFT network, systems, software and core messaging network have not been compromised in the recent hacks. Ensuring that this tight security and the integrity of the network remain intact is SWIFT’s number one objective.

But the SWIFT CEO acknowledges that the cyber threat is increasing and there will be further attacks.

4. Cyber security is a BIG Deal

The Bangladesh Bank heist hit the headlines in a humongous way given the incredible dollar amounts involved. Gottfriend defined this as: “…a watershed moment for the banking industry; there will be a before and after Bangladesh“.

In the speech Gottfried talks about how the fraudsters compromised the bank systems

• 1.) by gaining unauthorised access to systems that create the payments, from which the fraudulent payments were pumped into the SWIFT network
• 2.) by hiding the details of the fraudulent payments in the payment confirmation and bank statements

That aint good because it:

• Potentially has the ability to bring down a bank altogether or even multiple banks due to the inter-connectivity between banks through the SWIFT network
• Breaks trust in the overall financial system

5. Cyber Security requires Collaboration

Gottfried was unequivocal in stating “We cannot secure our customers’ environments and cannot assume responsibility for that“. But recognises that SWIFT has a important role to play in the overall global payments process and that SWIFT needs to be part of the overall solution — see point 7 below

6. Sharing Information will strengthen Cyber Security efforts

The SWIFT CEO urged the global financial community to share information about the cyber threat through trusted information sharing channels, like SWIFT. Gathering data about the threats means that financial institutions can learn from one another and implement appropriate controls and security measures.

Gottfried in this part of the speech champions the notion of a collective mission, speaking about:

• “global financial community have to be willing to share that information”
• “It is critical that the global financial community works together to bolster our mutual security“
• “security is our collective mission and can only be strengthened through a collaborative approach”

7. SWIFT will unveil a 5 Point Customer Security Program

Next Gottfried outlined a Customer Security Program aiming to strengthen overall security by:

• Promoting better collaboration, basically sharing information relating to cybersecurity, across SWIFT participants
• Strengthening the local security requirements within customers local environments
• Updating SWIFT guidelines and creating SWIFT security audit frameworks
• Getting banks to use payment pattern controls, so that they can spot suspicious/dodgy payment requests
• Introducing a formal security certification requirements for third party providers

These can only happen if there is cooperation within all participants.

8. The Security Threat is Evolving

In the old days the threat was men in balaclavas with guns, and now its “hoodies hunkering over keyboards“. Unprecedented connectivity brings about new and growing challenges.

9. Innovation is the Problem & the Solution

Gottfried discussed how technology has improved the banking experience but at the same time introduced new threats. And how these new cyber threats require innovative solutions to help preserve the integrity of the financial industry.

10. “Sometimes it takes a crisis” - Gottfried Leibbrandt

Gottfried detailed how the current cyber threat and recent hacks are incidents that the financial industry should use to bolster their security procedures and emerge stronger and more secure from.

The post “Sometimes it takes a crisis” – SWIFT CEO on Cyber Security appeared first on SEPA for Corporates.

One of the most popular posts on this blog is the MT940 Format Overview. The Mt940 overview has prompted all kinds of questions and one of the most recurring requests is for a list of the Transaction Type codes – the official term for these are the SWIFT Transaction Type Identification Codes or sometimes they are called Business Transaction Codes (BTC). This post gives you a quick rundown of the what the Transaction Type code is and the codes that you should expect to see in your MT940 bank statement.

Why do i need to bother about Transaction Type Codes?

As the name suggests the Transaction Type Codes help to identify the type of transaction being reported on the bank statement. These codes help your Treasury team identify the transaction on the bank statements and in turn enables them to allocate the transaction appropriately during the bank statement posting and reconciliation process.

Remember the bank statement indicates everything that is happening on a given account, and it goes without saying that knowing what each transaction represents is critical. Especially given the increase in actual, and attempted, fraudulent payments. But as the recent SWIFT related hacks revealed, with the right malware even a bank statement – or the bank statement printed report – can be manipulated.

Where can i find the Transaction Type Code

These Transaction Type codes are indicated in tag 61, sub-tag 6, and are prefixed with either “N” or “F”

1. 6!n Value Date (YYMMDD)
2. [4!n] Entry Date (MMDD)
3. 2a Debit/Credit Mark
4. [1!a] Funds Code (3rd character of the currency code, if needed)
5. 15d Amount
6. 1!a3!c Transaction Type Identification Code
7. 16x Customer Reference
8. [//16x] Bank Reference
9. [34x] Supplementary Details (this will be on a new/separate line)

What Transaction Type Codes are being used?

This is what you’re really looking for – I hope this helps you understand the codes being used and what they mean:

• Transaction Type Code - Description
• BNK - Securities Related Item – Bank fees
• BOE - Bill of exchange
• BRF - Brokerage fee
• CAR - Securities Related Item – Corporate Actions Related (Should only be used when no specific corporate action event code is available)
• CAS - Securities Related Item – Cash in Lieu
• CHG - Charges and other expenses
• CHK - Cheques
• CLR - Cash letters/Cheques remittance
• CMI - Cash management item – No detail
• CMN - Cash management item – Notional pooling
• CMP - Compensation claims
• CMS - Cash management item – Sweeping
• CMT - Cash management item -Topping
• CMZ - Cash management item – Zero balancing
• COL - Collections (used when entering a principal amount)
• COM - Commission
• CPN - Securities Related Item – Coupon payments
• DCR - Documentary credit (used when entering a principal amount)
• DDT - Direct Debit Item
• DIS - Securities Related Item – Gains disbursement
• DIV - Securities Related Item – Dividends
• EQA - Equivalent amount
• EXT - Securities Related Item – External transfer for own account
• FEX - Foreign exchange
• INT - Interest
• LBX - Lock box
• LDP - Loan deposit
• MAR - Securities Related Item – Margin payments/Receipts
• MAT - Securities Related Item – Maturity
• MGT - Securities Related Item – Management fees
• MSC - Miscellaneous
• NWI - Securities Related Item – New issues distribution
• ODC - Overdraft charge
• OPT - Securities Related Item – Options
• PCH - Securities Related Item – Purchase (including STIF and Time deposits)
• POP - Securities Related Item – Pair-off proceeds
• PRN - Securities Related Item – Principal pay-down/pay-up
• REC - Securities Related Item – Tax reclaim
• RED - Securities Related Item – Redemption/Withdrawal
• RIG - Securities Related Item – Rights
• RTI - Returned item
• SAL - Securities Related Item – Sale (including STIF and Time deposits)
• SEC - Securities (used when entering a principal amount)
• SLE - Securities Related Item – Securities lending related
• STO - Standing order
• STP - Securities Related Item – Stamp duty
• SUB - Securities Related Item – Subscription
• SWP - Securities Related Item – SWAP payment
• TAX - Securities Related Item – Withholding tax payment
• TCK - Travellers cheques
• TCM - Securities Related Item – Tripartite collateral management
• TRA - Securities Related Item – Internal transfer for own account
• TRF - Transfer
• TRN - Securities Related Item – Transaction fee
• UWC - Securities Related Item – Underwriting commission
• VDA - Value date adjustment (used with an entry made to withdraw an incorrectly dated entry – it will be followed by the correct entry with the relevant code)
• WAR - Securities Related Item – Warrant

Ref: Deutsche Bank MT940/942 Format Specifications

I see a Transaction Code in my MT940 that isn’t listed above, what is it?

Go and talk to your bank and ask them what the code refers to. Ask the bank if they are using any other bank proprietary transaction type codes, and if so, what are they? And what do they refer to.

Hope that helps folks!

The post List of MT940 Transaction Type Identification Codes appeared first on SEPA for Corporates.

In the post a Simple Guide to the SWIFT MT101 Format there is reference to tag 57 – Account with Institution. On the whole, you should use 57A which requires the BIC value. But for some domestic transactions you need to use the 57C option, and must indicate the National Clearing Code. Sometimes if you wish to make an international payment you may be required to indicate the appropriate National Clearing Code. Thats where this post will hopefully help! I list out the:

• 2 character national clearing codes to use in the SWIFT MT101 message (for international payments)
• 5 character national clearing codes to use in the PAIN.001 Clearing System Member Id <ClrSysMmbId>
  • Keep in mind that it is much easier to indicate XXXXX and leave your banks to populate the appropriate ISO 20022 External Clearing System Identification Code - Read 7 Reasons Why Your XML Payments Are Failing for further information!

NCC – National Clearing Codes:

• Australia:
  • SWIFT MT101 - 57C://AU followed by 6 digit bank code, no spaces
  • ISO20022 PAIN.001 - AUBSB (Australian Bank State Branch Code) followed by the 6 digit bank code, no spaces
• Canada:
  • SWIFT MT101 - 57C://CC followed by 9 digit bank code, no spaces
  • ISO20022 PAIN.001 - CACPA (Canadian Payments Association Payment Routing Number) followed by the 9 digit bank code, no spaces
• China:
  • SWIFT MT101 - 57C://CN followed by 12 digit bank code, no spaces
  • ISO20022 PAIN.001 – CNAPS (China National Advanced Payment System) followed by the 12 digit bank code, no spaces
• US (CHIP payments):
  • SWIFT MT101 - 57C://CP followed by 4 digit bank code, no spaces
  • ISO20022 PAIN.001 - USPID (CHIPS Participant Identifier) followed by the 4 digit bank code, no spaces
• US (FedWire Payments):
  • SWIFT MT101 – 57C:FW followed by 9 digit bank code, no spaces
  • ISO20022 PAIN.001 - USABA (Fedwire routing number) followed by the 9 digit bank code, no spaces
• Hong Kong:
  • SWIFT MT101 - 57C://HK followed by 3 digit bank code, no spaces
  • ISO20022 PAIN.001 - HKNCC (Hong Kong Bank Code) followed by the 3 digit bank code, no spaces
• India:
  • SWIFT MT101 - 57C://IN followed by 11 alpa-numeric bank code, no spaces
  • ISO20022 PAIN.001 - INFSC (Indian Financial System Code) followed by the 11 alpha-numeric bank code, no spaces
• Poland:
  • SWIFT MT101 - 57C://PL followed by 8 digit bank code, no spaces
  • ISO20022 PAIN.001 - PLKNR (Polish National Clearing Code) followed by the 8 digit bank code, no spaces
• Russia:
  • SWIFT MT101 - 57C://RU followed by 9 digit bank code, no spaces
  • ISO20022 PAIN.001 - RUCBC (Russian Central Bank Identification Code) followed by the 9 digit bank code, no spaces
• UK:
  • SWIFT MT101 - 57C://SC followed by 6 digit bank code, no spaces
  • ISO20022 PAIN.001 - GBDSC (UK Domestic Sort Code) followed by the 9 digit bank code, no spaces
• Switzerland:
  • SWIFT MT101 - 57C://SW followed by 3-5 digit bank code, no spaces
  • ISO20022 PAIN.001 - CHBCC (Swiss Clearing BC Code) followed by the 3-4 digit bank code, no spaces
  • ISO20022 PAIN.001 - CHSIC (Swiss Clearing SIC Code) followed by the 6 digit bank code, no spaces
• South Africa:
  • SWIFT MT101 - 57C://ZA followed by 6 digit bank code, no spaces
  • ISO20022 PAIN.001 - ZANCC (South African National Clearing Code) followed by the 6 digit bank code, no spaces
• Japan:
  • ISO20022 PAIN.001 - JPZGN (Japan Zengin Clearing Code) followed by the 7 digit bank code, no spaces
• New Zealand:
  • SWIFT MT101 - 57C://NZ followed by 6 digit bank code, no spaces
  • ISO20022 PAIN.001 - NZNCC (New Zealand National Clearing Code) followed by the 6 digit bank code, no spaces
• Sweden:
  • ISO20022 PAIN.001 - SESBA (Sweden Bankgiro Clearing Code) followed by the 4 digit bank code, no spaces
• Singapore:
  • ISO20022 PAIN.001 – SGIBG (IBG Sort Code) followed by the 7 digit bank code, no spaces
• Taiwan
  • SWIFT MT101 - 57C://TW followed by 7 digit bank code, no spaces
  • ISO20022 PAIN.001 - TWNCC (Taiwan National Clearing Code) followed by the 7 digit bank code, no spaces

Hope that helps!

 

Source: IBM Knowledge Centre – Clearing Codes

The post List of the NCC – National Clearing Codes appeared first on SEPA for Corporates.

I’m trying to get to grips with all things payments and blockchain related at the moment, and this quest has sent me in various directions. One emerging Fintech company thats fast occupying both the payments and distributed ledger space is Ripple. More on them later. But for now, i wanted to cover a couple of the Ripple Insights articles on SWIFT GPII – Global Payments Innovation Initiative. SWIFT, Payments and innovation are topics close to my heart, and Ripple provide a refreshing outlook on the SWIFT GPII. Their two articles What to Know Before Adopting GPII: Part 1 and Part 2 are well worth a read. As i read the articles, i made the following notes on why the SWIFT GPII aint up to scratch:

What is the SWIFT GPII?

The SWIFT GPII is all about improving cross border payments by:

• Common Standards – Introducing a new Service Level Agreement (SLA) that all participant banks will abide by
• Faster – Enabling participants to have same day use of funds
• Transparency – Stating payment fees upfront
• Visibility – Tracking of the payment from sender to the payment beneficiary
• Rich Remittance – Transferring ALL of the payment remittance information through to the beneficiary

This is all happening in 2017, and right now there are 73 participating banks.

Sounds perfect, Whats the Problem?

1. An SLA Update… Seriously?

The folks at Ripple argue that the existing payment infrastructures cant handle the global demands that the increasing number of cross border payments are putting on the current rails. The solution therefore is not as simple as an updated SLA, instead it requires a major overhaul and a new system (i wonder who can provide that…?) that can meet the needs of new consumer demands and expectations

2. Forget Same Day Settlements, we need REAL TIME!

While same day settlements are better than the current settlement cycles (which can be anything up to 5 working days, sometimes more), what people really want are real time payments.

3. Legacy Rails Cannot Handle Future Growth

Following on from point 1 above about the existing infrastructure, Ripple argue that when you consider the growth and demands of future technologies such as the Internet of Things (IoT), then existing payment infrastructures fall short. The argument is that existing infrastructures will struggle to cope with the increased transaction volumes and real time demands of the new technologies.

This reminds me of a post i did a little while ago about the problem with legacy systems.

4. Transparent Fees…. Really?!?!

• SWIFT say that the GPII will enable the “Transparency and predictability of fees“
• Ripple say “SWIFT cannot offer pre-disclosure of fees before a payment is initiated“

SWIFT need to clarify what they mean by “transparency and predictability of fees” – in short:

• Will SWIFT users know upfront how much a cross border payment will cost ?
• Will the fee be the same across participant banks?

5. Rich Remittance…. What has changed??!?!

• SWIFT say that GPII will feature “transfer of rich payment information“
• Ripple say “SWIFT’s GPII will continue to mandate its 140-character message for payment instructions“

Again, clarity around what “rich payment information” really means is required. If it really is a continuation of the current 140 characters, then this is nothing to write home about!

6. Upfront Visibility – Dude, Where’s my Payment?

The current problem with SWIFT cross border payments, Ripple argue, is that the process requires the transfer of the payment from bank to bank one at a time. The more correspondent banks involved usually makes the overall journey of the payment more prone to error(s), delays and increased costs. All of these “skips” introduce uncertainty (i wonder who can provide a solution for that…?).

And what if one of the banks is not a SWIFT GPII participant? The correspondent bank will not necessarily play by the GPII rules, and the benefits of the SWIFT GPII may not be realised.

7. Underlying Security Concerns are not Addressed

In another article, Ripple explain that the existing technology used to initiate and send payments continue to expose security weaknesses in the overall cross border payments process. Referring to the recent SWIFT related hacks Ripple argue that the distributed ledger technology needs to be implemented to increase cross border payments security.

Ripple suggest that multi-signing across validated parties using a distributed ledger offers increased security because it ensures that a single person/group cannot initiate a (fraudulent) payment.

The post 7 Ripple Reasons Why the SWIFT GPII Ain’t Good Enough appeared first on SEPA for Corporates.

The other day i was updating the post A News Bulletin Overview of the SWIFT Related Hacks, and started reading up about the Vietnam hack. The interesting thing about the Vietnam Tien Phong Bank hack was that the fraudulent transfers were routed through an external or third party provider used by the bank to connect to the SWIFT network – to you and me that is a SWIFT Service Bureau.

That got me interested and i started snooping around to find out more about SWIFT Service Bureaus. It led me to SWIFT’s very own Service Bureau Directory!

Pick a certified SWIFT Service Bureau or don’t bother….

…Unless you’re using SWIFT’s very own Alliance Lite 2 – more on that another day! But seriously, hooking up to SWIFT is a significant investment for any corporate – and so you shouldnt be using the SWIFT infrastructure and connectivity services of ‘Bob down the road’. If you’re going to use a Service Bureau you need one that meets SWIFTs own guidelines:

• Capabilities of the providers have been vetted and certified by SWIFT themselves
• Bureau’s in SWIFT directory meet the highest levels of security and reliability (day to day and disaster recovery) standards
• Service providers are the cream of the crop, and meet stringent international standards
• Providers are trained and certified in all aspects of SWIFT connectivity including ownership and operation of the SWIFT infrastructure
• SWIFT have been on-site and inspected and audited the SWIFT related infrastructure and processes for themselves

SWIFT Service Bureaus Compliance Requirements:

Check out:

• Details about the SWIFT Partner Program
• The difference between a ‘Standard‘ label and a ‘Premier‘ label SWIFT Service Bureau
• Information around the SWIFT Share Infrastructure Program

The Best SWIFT Service Bureaus:

The following information taken from the SWIFT Service Bureau Directory is true at the time of writing. Please note:

• The Standard / Premier label status will expire at a point, and will need to be renewed. So if you’re reading this in July 2017 some of the below listed Service Bureaus may no longer have either Standard or Premier status.
• Although the bureaus are listed in a given region, their services often span cross regions and are likely to be international  (you need to check)
• See the SWIFT Service Bureau directory for up to date information:

SWIFT Service Bureau in Africa:

• Premier label Service Bureaus = 0
• Standard label Service Bureaus = 2
• • Kenya Commerce Exchange Service Bureau - http://www.kenexnbi.com
  • Trustlink - http://www.trustlink.co.za/

SWIFT Service Bureau in North America:

• Premier label Service Bureaus = 5
  • Expertus Technologies - www.expertus.ca
  • SunGard AvantGard - http://www.sungard.com/
  • Akshay Financeware - http://www.paycommerce.com/
  • Axletree Solutions - www.axletrees.com
  • Misys International Banking Systems (MIBS) - www.misys.com
• Standard label Service Bureaus = 3
  • Eastnets Americas - http://www.eastnets.com/
  • Expertus Technologies - http://www.expertus.ca/
  • GXS - http://www.gxs.com/

SWIFT Service Bureau in South America:

• Premier label Service Bureaus = 2
  • Business Computer Group Panama (BCG) - http://www.bcg.com.ve/
  • Financeware Comerco e Servicos - http://www.financeware.com.br
• Standard label Service Bureaus = 2
  • Bancared Service Bureau - http://www.asbanc.pe/
  • RTM-Rede de Telecomunicaçoes Para o Mercado - http://www.rtm.net.br/

SWIFT Service Bureau in Asia & Pacific:

• Premier label Service Bureaus = 0
• Standard label Service Bureaus = 2
  • Decillion Group - http://www.decilliongroup.com/
  • Xchanging - http://www.xchanging.com

SWIFT Service Bureau in Europe:

• Premier label Service Bureaus = 5
  • D+H - http://www.dh.com/
  • EFIS EDI Finance Service - www.efis.de
  • SIBS – Sociedad Interbancaria de Serviços - www.sibs.pt
  • Fundtech Financial Messaging - http://www.dh.com
  • Grupo Exceltia - www.grupoexceltia.com/
• Standard label Service Bureaus = 26
  • Alliance Factors B.C.S. - http://www.alliance.ru
  • AnaSys - http://www.anasys.com/
  • Bellwood Service Bureau - http://www.bellwood.ru/
  • BFK Ltd - www.sb-bfk.ru
  • Borica – Bankservice - http://www.bobs.bg/
  • Bottomline Technologies - http://www.bottomline.co.uk/swift/
  • Bottomline Technologies SA - http://www.bottomline.co.uk/gtsuite/
  • Broadridge Financial Solutions - http://www.broadridge.com
  • Calastone - http://www.calastone.com/
  • Cedacri - http://www.cedacri.it/
  • Centric Financial Solutions & Services B.V. - http://www.centric.eu/
  • CIS - http://www.cis-eu.net
  • Digital Systems A.S.- http://www.digitalsystems.sk/
  • Euro-Information - http://www.e-i.com/
  • Fides Treasury Services - http://www.fides.ch/
  • Finanz Informatik - http://www.f-i.de
  • FL-Sistem - http://www.fl-sistem.hr/
  • Information Technology Gateways - http://www.itg.am/
  • Integrator IT - http://www.tii.ru/
  • Kazakhstan Interbank Settlement Centre - http://www.kisc.kz/
  • Krajowa Izba Rozliczeniowa S.A. - http://www.kir.pl/
  • National Settlement Depository - www.nsd.ru
  • Sungard Financial Systems France - http://www.sungard.com/avantagard
  • TAS - http://www.tasgroup.it/
  • Tieto Finland - http://www.tieto.com
  • Van Den Berg Consulting and Service - http://www.vdb.de/

SWIFT Service Bureau in Middle East:

• Premier label Service Bureaus = 0
• Standard label Service Bureaus = 2
  • Allied Engineering Group - http://www.aeg-mea.com/
  • Eastnets - http://www.eastnets.com/

Oh sh1t! Our Service Bureau is not listed above….

Then call them up, and ask why not! Perhaps they are mid-review with SWIFT, or have another reason (I’m curious to know what it is, so please share it anonymously in the comments below) or maybe the Bureau just hasn’t bothered — in which case, i would be very worried.

The post Is Your SWIFT Service Bureau On The List? If not, WHY Not? appeared first on SEPA for Corporates.

For those lucky enough to attend Sibos 2016 in Geneva, i have outlined what i think are some pretty interesting sessions over the 4 day SWIFT conference. But before diving into the details, i would recommend checking out my Sibos Infographic and 5 Tips For Newbies posts! It is worth noting the:

• Sibos conference is likely to attract over 8000 delegates
• Theme of the conference is “Transforming the Landscape“
• Day by day guide
• Downloading the Sibos App
• Checking out the latest info on Twitter  – search for #sibos and #sibos2016
• Sibos team are normally pretty good at uploading popular sessions on to YouTube
• Recurring themes from the below sessions are Fintech, Cybersecurity, Blockchain and the Disruption in the

There are a lot of really good sessions, so you need to plan upfront your attendance. So with that in mind, here is my day by day guide to Sibos 2016…! (Note my focus on payments and corporate treasury sessions.)

Sibos 2016 – Monday 26th October

• 0900-1000 - Making real time successful in the Eurozone
• 1015-1115 - Technology trends in financial services
• 1130-1230 – Sibos – Opening Plenary
• 1245-1345 - Temenos: Meeting the needs of the corporate treasurer: Taking the results of the global survey and making them a reality
• 1445-1515 - Dow Jones: Cybersecurity: The challenge of really knowing your suppliers and customers
• I could not decide between the following:
  • 1530-1630 - McKinsey & Company’s global payments report
  • 1530-1615 - SWIFT Customer Security Programme
• 1700-1730 - Innotribe day closing (Disruption, Day 1)

Sibos 2016 – Tuesday 27th October

• 0900-1000 – Payment strategies for the future
• 1015-1115 - Payments interoperability across communities and currencies
• 1130-1230 - Financial Stability – The future of global finance
• 1245-1345 - FinTech hubs – EMEA
• 1400-1500 - Cybersecurity – Catching the bad guys
• 1530-1600 - D+H: Blockchain technology: The way forward in payments?
• 1700-1730 - Innotribe day closing (Organisation, Day 2)

Sibos 2016 – Wednesday 28th October (Corporate Forum starts)

• 0900-100 - Education: Cybersecurity 101 – Outwitting ingenious attackers
• 1015-1115 - The ultimate corporate wish list
• 1130-1230 - Cognitive business and the future of financial services
• 1300-1345 - The corporate debate: Banks should stop differentiating non-competitive services
• 1400-1500 - How can banks help corporates grow their business?
• 1530-1630 – How can technology help in treasury strategy?
• 1700-1730 - Innotribe day closing (Man-machine, Day 3)

Sibos 2016 – Thursday 29th October

• 0900-1000 - Learning from FinTech – Can we fail fast, and learn fast?
  • CLASH 0930-1015 - Corporate Treasury Perspectives – Overcoming increasing complexity
• 1130-1230 - Are disruptive innovations transforming the financial services landscape, or are we simply in the middle of a new technology cycle?
• 1300-1345 - Bringing down barriers – Simpler corporates onboarding with MyStandards
• 1400-1500 - DLT and cybersecurity: Sibos week wrap-up
  • CLASH – 1445-1515 - Get insights into SWIFT products: Discover the corporate experience on SWIFT
• 1530-1615 - SWIFT Customer Security Programme
• 1630-1730 – Sibos Closing Plenary

Oh, if you’re feeling generous feel free to buy me some fine Swiss chocolate…

The post Sibos 2016 – A Day by Day Guide for Payments Peeps appeared first on SEPA for Corporates.