Collaborative initiative expands SWIFT’s financial crime compliance portfolio to support new FATF Recommendation 16 requirements for wire transfers
Brussels, 11 April 2016 – SWIFT announces that it will launch Payments Data Quality, an advanced reporting and data analytics service to help financial institutions comply with new international requirements for originator and beneficiary information in payments messages.
The new service will help banks monitor their compliance with the Financial Action Task Force’s (FATF) Recommendation 16 for wire transfers, which was issued in 2012.
Regulatory focus on originator and beneficiary information has intensified since the FATF recommendations were issued. A number of jurisdictions have or will enshrine FATF Recommendation 16 in law, thus mandating the inclusion of originator and beneficiary information in payments messages. In the European Union, for instance, the Funds Transfer Regulation (FTR) adopted in 2015 will mandate such information in 2017. Singapore recently implemented FATF Recommendation 16 within MAS Notice 626, and other jurisdictions are expected to follow suit.
The new requirements will pose compliance and operational challenges for financial institutions the world over. The lack of standard practices for formatting some originator and beneficiary details, such as addresses and bank account numbers, in financial messages can make data detection by automated systems difficult. Many banks maintain multiple payments platforms, making it hard to maintain a global, institution-wide overview of payments data quality levels.
SWIFT is working closely with its community to address these challenges. Luc Meurant, Head of Financial Crime Compliance Services, SWIFT, says: “This is a perfect example of how SWIFT’s core strengths – collaboration, standards, and the ability to provide banks with a global overview of their payments data – enable us to deliver innovative services that support the effectiveness and efficiency of our customers’ compliance programmes.”
SWIFT’s Payments Data Quality service
Industry analysis indicates that originator and beneficiary information is missing or incomplete in a significant number of payments messages. The Payments Data Quality service will check messages using quality verification rules developed by SWIFT in line with industry practice and in cooperation with its community. The service will offer financial institutions:
- a global overview of quality of originator and beneficiary information in their payments messages
- detailed analytics to help them identify potential risk related to specific countries, counterparties and branches
- trusted reporting from SWIFT as a neutral third party to support their internal investigations and discussions with their counterparties
- a web-based platform eliminating the need to install, integrate or maintain additional systems
“There is a growing need for improved payments data quality, particularly as it relates to financial crime compliance,” says David Howes, Deputy Head of Financial Crime Compliance, Standard Chartered Bank. “We welcome the collaborative effort SWIFT is putting in place to enable the development and use of industry practice and standards to enhance data quality, transparency and compliance.”
“Ensuring that complete originator and beneficiary information is contained within relevant payment messages helps financial institutions comply with their regulatory obligations,” says Brigitte De Wilde. “However this information is sometimes missing, unstructured and incomplete, complicating its detection. SWIFT’s Payments Data Quality service will provide banks with a unique analytics and reporting service to support their compliance activities, whilst also establishing a global platform for developing industry practices, thereby helping to mitigate operational cost and risk.”
The Payments Data Quality service will be available in Q3 2016.
Notes to editors
FATF Recommendation 16 reads as follows:
“Countries should ensure that financial institutions include required and accurate originator information, and required beneficiary information, on wire transfers and related messages, and that the information remains with the wire transfer or related message throughout the payment chain.
Countries should ensure that financial institutions monitor wire transfers for the purpose of detecting those which lack required originator and/or beneficiary information, and take appropriate measures.
Countries should ensure that, in the context of processing wire transfers, financial institutions take freezing action and should prohibit conducting transactions with designated persons and entities, as per the obligations set out in the relevant United Nations Security Council resolutions, such as resolution 1267 (1999) and its successor resolutions, and resolution 1373(2001), relating to the prevention and suppression of terrorism and terrorist financing.”
- Read the full FATF Recommendations, including Recommendation 16.
About SWIFT’s financial crime compliance services portfolio
SWIFT’s Compliance Services unit manages a growing portfolio of financial crime compliance services in the areas of sanctions, Know Your Customer (KYC) and Anti-Money Laundering (AML). The portfolio includes Sanctions Screening and Sanctions Testing services, Compliance Analytics and The KYC Registry. For more information, visit www.swift.com/complianceservices.
SWIFT is a global member-owned cooperative and the world’s leading provider of secure financial messaging services.
We provide our community with a platform for messaging and standards for communicating, and we offer products and services to facilitate access and integration, identification, analysis and financial crime compliance.
Our messaging platform, products and services connect more than 11,000 banking and securities organisations, market infrastructures and corporate customers in more than 200 countries and territories, enabling them to communicate securely and exchange standardised financial messages in a reliable way.
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