As the principal network for interbank transaction handling, SWIFT is now migrating its long-established MT messages for payments and reporting to new formats. To allow worldwide financial institutions sufficient time to manage the transition, SWIFT is planning a co-existence phase of 4 years from the starting point in November 2022. During this phase, MT and the new MX formats will be supported in parallel. Nevertheless, all SWIFT members will be expected to accept and process the MX messages from the outset.
This is more than a technical migration. The move to the ISO 20022 standard globally requires significant operational and infrastructure adaptations by all parties involved within the payments business. For banks, the change in the payments landscape could be a complex and costly process. On the other hand, the advantages of the new formats in terms of automation and richer information can lead to better reconciliation and throughput rates and improvements in the quality of essential services such as archiving and anti-money laundering. These factors will in turn reduce costs and increase efficiency in the mid-term.
Because the focus of the change is the Bank-Bank message exchange, there is no immediate pressure to make changes to client channels. However, there are two important considerations: firstly, there is already a clear demand for the new formats from corporate clients, who appreciate the benefits of the new formats in terms of automation and richer information; and secondly, where E-Banking standards are regulated (as in Germany, via the DK), it can be expected that the new formats will officially replace the previous standards, in a similar timeframe to the SWIFT migration.
Omikron’s e-banking client solutions are well-prepared for the upcoming change, and Omikron’s powerful digital banking platform has the necessary flexibility and functionality for workflows to be established and adapted as needed. One central component here is the universal multi-format support, which enables the parallel use of the new MX formats alongside the old MT formats. At the same time, the incoming and outgoing formats can be fully validated by the intelligent modular format subsystems. The sophisticated workflow management allows the configuration of detailed processing procedures according to the Business Process Model and Notation (BPMN) concept. Our specific conversion tool UBIQCash enables you to set up flexible format conversion for both incoming and outgoing formats in both directions.
More detailed background information on the upcoming migration of SWIFT messages and our solution is provided in our whitepaper.