Financial messaging standards sit at the heart of virtually all economic activity, from executing the smallest retail transactions to managing massive global institutional businesses; they play a key role in enabling modern society to function effectively.
SWIFT and Standards
Since its genesis in the 1970s, SWIFT has played an important role in standardisation, by creating and maintaining financial messaging standards and reference data standards. Use of standardised messages and reference data ensures that data exchanged between institutions is unambiguous and machine friendly, enabling efficient automation and so reducing industry costs and risk.
Financial institutions send structured electronic messages to one another to perform common business processes, such as making payments or confirming trades. In its role as a financial messaging standardiser, SWIFT’s Standards group works with the financial community to define standards for these messages.
These standards specify the data elements that can be included in the messages, document the meaning and format of those data elements and specify which of the elements are mandatory, which are optional, and which are only required in specific business scenarios.
The standardised messages also describe the actions expected of the message receivers, and, because some business processes require several messages to be exchanged, they also specify the order in which messages should be sent and received.
The SWIFT Standards group maintains several important message standards. The SWIFT MT standard, for instance, is used for international payments, cash management, trade finance and treasury business. Working with the SWIFT community, SWIFT Standards operates the annual maintenance process for MT, which ensures that the standard evolves to meet changing market needs.
The SWIFT MT standard is described in the User Handbook and MyStandards.
SWIFT and ISO standards for financial messaging
SWIFT Standards, under contract to ISO, also acts as Registration Authority for two open messaging standards: ISO 15022, which is used for securities settlement and asset servicing, and ISO 20022, which is scoped to all financial industry processes.
The role of ISO 20022 is twofold: it is a methodology for creating financial messaging standards, and it is a related body of content which includes definitions of common industry terms, and message definitions addressing an expanding range of business areas, including payments, cash management, treasury, cards and securities.
The ISO 15022 and ISO 20022 standards are also described in the User Handbook and MyStandards.
SWIFT and market practice
SWIFT Standards works with the user community to specify and publish market practice - rules and best-practice advice on how standards should be deployed to meet particular business needs or to comply with regulation.
SWIFT and ISO reference data standards
SWIFT Standards acts as Registration Authority (RA) for several standards that define universal codes for common data items, or data standards. RAs are appointed by the International Organisation for Standardisation (ISO) to ensure the integrity of the reference data defined by ISO standards, and to publish the data in an accessible form for the benefit of the user community. Examples of such standards include the ISO 9362 Business Identifier Code (BIC - commonly referred to as the “SWIFT” code), which is used to identify parties, and the ISO 10383 Market Identifier Code (MIC), which is used to identify exchanges, trading platforms, regulated or non-regulated markets and trade reporting facilities.
SWIFT Standards also contributes to the formalisation and implementation of other reference data standards, notably the ISO 17442 Legal Entity Identifier (LEI), which is increasingly required for regulatory reporting purposes. Financial messaging standards include these codes wherever possible to minimise the ambiguity of data.