Traditional trade on the move
SWIFT Board approves trade messages for corporate-to-bank use
Published on 13 June 2008
Banks and corporates will soon be able to exchange trade information over SWIFT, including, from November 2008, Letters of Credit advice and applications. The move follows the SWIFT Board decision on 10 June to extend the
SCORE (Standardised CORporate Environment) participant model to include trade messaging, for the first time.
Corporates connected to SWIFT view exchanging trade messages as the next valuable step after payments, cash management and treasury activities. They want faster processing time and better control over their trade procedures as well as a single standard and communication channel.
"The envelope message" MT 798 – the information carrier
"SWIFT is moving towards meeting community needs in the trade space"
Arthur Cousins, The Standard Bank of South Africa
SWIFT’s FIN message type (MT) 798 – the "envelope message" – provides the most comprehensive solution for corporates for their trade needs. The MT 798 can carry the information a corporate needs to exchange with its bank, for key trade data flows.
The message caters for Import Letters of Credit, Export Letters of Credit and Guarantees/Standby Letters of Credit. A set of guidelines will detail how to use the message. The guidelines are the result of close collaboration with the national trade working groups, banks, corporates, vendors and the German banking community (whose national corporate to bank standard has been in use since 1998).
The benefits
The MT 798 provides a consistent way of handling the specific data corporates need to send to their banks and vice versa. It permits logical processing, numbering and routing of messages which in turn facilitate the banks’ data handling. Using the envelope message also provides flexibility for adding further data components should the need arise.
When FileAct is more appropriate
Where the MT 798 is not applicable, banks and corporates can use
the FileAct messaging service with specific trade request types. The trade request types enable parties to identify files in a more formalised manner, thus improving routing, processing and overall efficiency.
Arthur Cousins, Director Strategy and Product Development, The Standard Bank of South Africa and member of the SWIFT Board, welcomed the move: “SWIFT is moving towards meeting community needs in the trade space. This represents a major step forward for banks, to provide a complete trade offering to their corporate customers. We are very pleased with the industry’s response to our efforts, such as ISO’s recent approval of TSU related trade messages. Banks, corporates and vendors are spending serious time evaluating our proposals – their contributions are essential to SWIFT’s success.”