TARGET2 - stepping up the pace
Posted 29 August 2005
The Eurosystem, the national communities and SWIFT are all preparing for 2007
The Eurosystem is building the new European RTGS system, TARGET2. It will be based on a single technical platform providing high-quality services, functionalities and interfaces for financial institutions across Europe. With the introduction of new functionality it will become one of the most sophisticated payment systems in the world. The European banking community is gearing up to move to TARGET2 in 2007.
From there to here – preparation in action
Since our last article, the European banking community has been very active. Most National Central Banks have organised TARGET2 information sessions for future TARGET2 participants. This has given banks an opportunity to exchange views on how best to prepare for the move.Financial institutions have started budgeting and planning the necessary infrastructures which will allow them to use the SWIFTNet services they will need - SWIFTNet FIN, FIN Copy, SWIFTNet Browse, and SWIFTNet InterAct and FileAct.
Whereas some National Central Banks are already using SWIFTNet services, some others are introducing them this year. In Ireland the National Central Bank and the Irish banking community have decided to use SWIFTNet FileAct for bilateral file transfers in preparation for TARGET2. The banks will be able to evaluate the impact of SWIFTNet services on their applications and operations, and build experience.
The National Bank of Belgium has signed for SWIFTNet Cash Reporting as both Provider and User, and the project will kick off mid September 2005. Once it is developed they will start testing with the Belgian User community. Marc Braet, Regional Manager, Benelux, SWIFT, explains, “By starting to use SWIFTNet Cash Reporting, banks in Belgium will benefit from a longer preparation and testing window, and will start integrating XML standards. This means SWIFT can spend more time with them on their implementation path.”
Finally, the other National Central Banks are currently planning the introduction of SWIFTNet services, as part of their migration to TARGET2.
SWIFT Training’s TARGET2 course will be available as from October 2005. It offers different modules on the technical implications of TARGET2. These modules can be complemented by other programmes such as the SWIFTAlliance interface courses.
Sibos – an opportunity to get up to date
The Eurosystem stand (C 241 – Hall C) will present the next generation of TARGET, TARGET2. A new demo version of the Information and Control Module (ICM) of TARGET2 will be available to visitors of the Eurosystem stand.SWIFTNet for TARGET2 * – a SWIFT information session - will give future TARGET2 participants the information they need to get ready for the migration.
From here to there – what’s next on the agenda
Future TARGET2 participants will need to order their interfaces for accessing TARGET2. There are two different technical access modes for using the ICM - manual (User-to-Application mode) and automated (Application-to-Application mode).The table summarises the SWIFTAlliance product portfolio which meets TARGET2 access needs.
SWIFTAlliance interfaces to access the TARGET2 Information and Control Module
| Application-to-Application to ICM | User-to-Application to ICM |
| Messaging services | Messaging services |
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| Recommended interfaces | Recommended interfaces |
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SWIFTAlliance Gateway Single Window“The SWIFTNet interface configuration for the User-to-Application can be simple and the investment very small thanks to the SWIFTAlliance Webstation or the SWIFTAlliance Starter Set. However, larger banks will opt for the SWIFTAlliance Gateway Single Window which supports application-to-application access to TARGET2. These banks will be able to re-use their infrastructure to access other market infrastructures and SWIFTSolutions,” explains Joëlle Lockman, Business Manager, TARGET2, Banking Market Infrastructures.
According to a recently published press release on the ECB website,”The Eurosystem remains strongly committed to delivering TARGET2 in 2007. It is foreseen that the go-live date for the first migration window will be during the second half of that year. This timetable will ensure that all comments made by the various players are taken into account and that banks have enough time to prepare for the testing of TARGET2. Further details on the timetable will be provided at Sibos.”