SWIFT Standardises Corporate-To-Bank Payments Messages

SWIFT says its International Standards Team (IST) for Harmonisation has delivered a standard XML core payment kernel for corporate to bank payment initiation and status messages. SWIFT says the core payment kernel consists of an agreed set of key financial

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SWIFT says its International Standards Team (IST) for Harmonisation has delivered a standard XML core payment kernel for corporate-to-bank payment initiation and status messages.

SWIFT says the core payment kernel consists of an agreed set of key financial data components required for a payment message in any currency. The payment kernel can be processed by any bank irrespective of location and can be issued by any corporation irrespective of business line.

Two factors were key to the success of the project, says SWIFT. First, all parties agreed to use the latest ISO standard (UNIFI – ISO 20022) for the definition of the core payment kernel message models and XML schemas. Secondly, all have committed to including it in their own existing sets of standards.

The collaboration began in the summer of 2003, when nine major international banks and four standards initiatives created a single international standards harmonisation effort to avoid divergence and duplication of standards. The four standards bodies – IFX, OAGi, SWIFT and TWIST – signed a MoU in November to develop a common standardised ‘core payment kernel’ containing all financial information related to the execution of a corporate payment by the banks.

Using the SWIFT message models already adopted by RosettaNet for corporate-to-bank payments as a basis, together with messages developed by the other organisations involved, the IST Harmonisation Team agreed on the core components needed. In March 2004, the core payment kernel was endorsed by a ‘global business validation group’ sponsored by SWIFT.

The group consisted of banking community representatives worldwide, experts from the corporate communities of IFX, OAGi, RosettaNet, SWIFT and TWIST, and representatives of other standards bodies such as UN/CEFACT.

The IST Harmonisation Team is now publishing its ‘Final Recommendations’ in a report describing the UNIFI compliant messages and giving several recommendations on how to best use them. The report also details how to extend the messages with additional information from existing standards, such as remittance information, and how to maintain them using the ISO 20022 maintenance process. Banks, corporates and vendors can now start using the core payment kernel to streamline payment applications and take advantage of the STP benefits. RosettaNet is already implementing the messages.

The initial focus on payments initiation and status messages provides a solid framework for the future collaboration which will cover bank-to-corporate advices and statements. Preparation work is now underway for this second phase.

“This is a prime example of standards convergence at work,” says Jean-Marie Eloy, Senior Manager, SWIFT Standards. “We are delighted to have demonstrated that working together is possible and to prove that UNIFI offers a successful route to facilitating standards harmonisation.”

The nine banks involved were ABN AMRO, Bank of America, Citigroup, Deutsche Bank, HSBC, JPMorgan Chase, Nordea, Standard Chartered and Wells Fargo.

IFX is a US-based initiative created in 1997 to develop standards for use between the financial services industry and its clients. IFX is an independent, non-profit organization dedicated to the development and promotion of a standard suite of XML-based business message specifications to enable the exchange of data among financial institutions, service providers and technology vendors.

OAGi is a not-for-profit industry consortium created in 1995. It focuses on promoting interoperability among business applications and creating business language standards to support this goal. OAGi also offers several choices for deploying integration.

SWIFT is the industry-owned cooperative supplying secure, standardized messaging services and interface software to 7,600 financial institutions in 200 countries. The SWIFT community includes banks, broker/dealers and investment managers, as well as their market infrastructures in payments, securities, treasury and trade. SWIFT is charged by its members with the development of internationally approved standards relating to the financial services industry.

TWIST was created in 2001 to develop standards for the automation of treasury, working capital management and commercial payments activities. TWIST aims at identifying/defining the particular ‘business scenarios’ (to be) used by a community of corporate treasurers and their information requirements with the purpose of harmonizing their communications with their financial institutions.