Swift releases error initiatives
(9 February 2010 – Global) SWIFT, a financial messaging provider for financial institutions and corporations, today announced the roll-out of a range of new initiatives designed to reduce costly settlement errors and improve the rates of automation of Standing Settlement Instructions (SSIs).
SWIFT’s initiatives are a response to the industry need for greater efficiency in SSI processing.
SSIs are agreements between two financial institutions that fix the receiving agents of each counterparty. They make for speedy payment and settlement, but SSIs are frequently changed, which results in settlement errors and payment rejections.
Research jointly conducted by SWIFT and 12 of its customer banks suggests there are currently about 40 million such payment errors every year, costing the financial industry an estimated US$700 million (A$690 million).
SWIFT has now launched a global SSI repository, the multiple sources and sophisticated selection strategies used will ensure that an institution’s SSIs are complete, accurate and able to be replicated with ease.
Commenting on the raft of SSI initiatives, Patrik Neutjens, head of Reference Data at SWIFT, said, the lack of a single source for SSI information has led to payment failures, costing banks considerable time and money. In the age of automation and real-time reporting, it is crucial that this situation improves."
"These initiatives will provide a comprehensive solution to some of the problems with changing SSIs. SWIFT’s efforts will drastically improve the situation, culminating in a standard message format to allow banks and other financial institutions to efficiently update each other on changes to their SSI arrangements. This message format will ensure that only 2 relevant parties are informed of the changes and prevent financial institutions being overwhelmed with irrelevant updates."
The SSI directory for retail payments based on the repository will be updated and published on a monthly basis. At a later stage, SWIFT will also launch an SSI directory for treasury in the FX and money markets sectors.
The second initiative is the creation of a standard messaging format for distribution of cash SSI updates, available from November this year. The message format will be structured, validated and authenticated, and allow senders to either specify a list of recipients for the notification, or to inform the broader SWIFT community.
SSIs are agreements between two financial institutions that fix the receiving agents of each counterparty. They make for speedy payment and settlement, but SSIs are frequently changed, which results in settlement errors and payment rejections.
Research jointly conducted by SWIFT and 12 of its customer banks suggests there are currently about 40 million such payment errors every year, costing the financial industry an estimated US$700 million (A$690 million).
SWIFT has now launched a global SSI repository, the multiple sources and sophisticated selection strategies used will ensure that an institution’s SSIs are complete, accurate and able to be replicated with ease.
Commenting on the raft of SSI initiatives, Patrik Neutjens, head of Reference Data at SWIFT, said, the lack of a single source for SSI information has led to payment failures, costing banks considerable time and money. In the age of automation and real-time reporting, it is crucial that this situation improves."
"These initiatives will provide a comprehensive solution to some of the problems with changing SSIs. SWIFT’s efforts will drastically improve the situation, culminating in a standard message format to allow banks and other financial institutions to efficiently update each other on changes to their SSI arrangements. This message format will ensure that only 2 relevant parties are informed of the changes and prevent financial institutions being overwhelmed with irrelevant updates."
The SSI directory for retail payments based on the repository will be updated and published on a monthly basis. At a later stage, SWIFT will also launch an SSI directory for treasury in the FX and money markets sectors.
The second initiative is the creation of a standard messaging format for distribution of cash SSI updates, available from November this year. The message format will be structured, validated and authenticated, and allow senders to either specify a list of recipients for the notification, or to inform the broader SWIFT community.
Subscribe