1. a buyer’s guide to SWIFT SERVICE BUREAUS 2012 a buyer’s guide to SWIFT SERVICE BUREAUS 2012
ALLIANCE LITE2
According to SWIFT, Alliance Lite2 will
support higher message volumes and more
automation options than its predecessor, as
well as supporting all SWIFT message types
(MT and MX). It will also be offered with
additional services including automation
assistance, training and support.
There is no need for existing users of
Alliance Lite to migrate to the new product
straight away but for those who wish
these
to do so the process is straightforward.
predecessor, could be worthy of concerns,
User requirements for Alliance Lite2 are a
consideration. While the full technical Hughes says that
Windows PC, Internet Explorer 8.0 or 9.0
details of the new solution have not yet SWIFT is responding
and the Alliance Lite2 USB token.
been released, the industry response has so to concerns from corporations and banks by
Status Update:
far been largely positive. “Alliance Lite2 is making it harder to be a service bureau. As well as offering Alliance Lite2 as a
definitely an improvement on Alliance Lite in standalone connectivity option, SWIFT is
“Alliance Lite will drive the whole concept of planning to offer it to existing customers
terms of the volume limits and challenges
the certification of SWIFT service bureaus,” as a backup facility which could be used in
that the product had to start with,” says Tom
comments Durkin. “We are a big supporter an emergency.
Durkin, global head of integrated channel
of this project and I think certification can go
solutions for Bank of America Merrill Lynch Alliance Lite2 is currently in the pilot stage
deeper to make sure everyone’s on a level
Checking Your Message Flow
(BofA Merrill). and is expected to go live in July this year.
playing field.”
If Alliance Lite2 lives up to industry
Plug-and-play needs outgrew the capabilities of Alliance
expectations, it could be much more attractive
Another issue which may have an impact on Lite as their business grew,” explains Dignen.
to treasurers than the previous model. Dignen
treasurers’ connectivity decisions is the ‘plug “This drove SWIFT to continue to listen to
comments: “We are hearing from corporate
and play’ factor. On the whole, connecting the industry, and develop Alliance Lite2,
treasurers that they want to have their
connection and relationship directly with SWIFT, to SWIFT is not a fast process: a direct which is also designed for ease of use and Status messaging provides corporates with full visibility over their financial
implementation, as well as enhanced services.”
and before Alliance Lite2, the product set was
not as complete to be able to offer this.”
connection can take up to six months to set
up. For treasurers connecting via a service This suggests that for treasurers connecting
messages and payment instructions sent via SWIFT. But how does the whole
In this case, the introduction of Alliance
bureau, the process may only take a couple
of months. However, getting banks on board
to SWIFT, the convenience of plug and play
is of secondary importance compared to
process actually work, what happens when messages fail, and how can corporates
Lite2 could pose something of a threat for
SWIFT service bureaus. With its enhanced
is among the biggest challenges, according to
Kurt Vandebroek, senior vice president (SVP),
considerations such as functionality and ensure they select the best SWIFT service bureau (SSB) for their individual needs?
capabilities and higher transaction limits, the security. “Yes, we would like it to be as easy as
product development for SunGard’s AvantGard.
next generation of Alliance Lite will take this While this task can be undertaken by the
possible to connect to the network,” comments Words: Ben Poole
connectivity model one step further into the Davis. “But we still want all the authentication
bureau if required, this can prove difficult in
space currently occupied by servie bureaus. and all the security that SWIFT gives us, and we Status messages inform SWIFT users of the progress of their real-time visibility, of their cash balances at their banks and to check
practice as banks are not always keen for
don’t want any of that relaxed to make it a little messages over the network. However, there are different levels of whether a payment has been received or made.
“The vendors are getting a little concerned vendors to come between the bank and the
bit easier.” sophistication adopted, depending on the specific business needs
about Alliance Lite,” says Durkin. “SWIFT corporate customer. This visibility is more important than ever today, according to Marcus
of the end user. At a non-sophisticated level, there are basic SWIFT
has basically come up with a product which Vandebroek observes that the extent to which Indeed, while optimising the implementation users. These users accept that SWIFT is a highly resilient and Hughes, director of business development, Bottomline Technologies.
competes with every SWIFT service bureau corporates are looking for a ‘plug-and-play’ process is clearly important, it is worth asking secure network that is trusted by all major banks, and that SWIFT “Cash visibility is probably the number one driver for corporates
out there, so it’s going to be interesting to see model has a geographical element. “We have how meaningful the concept of ‘plug-and-play’ has never lost a message. Therefore some users assume that the and non-bank financial institutions. When they look at SWIFT, they
how the market develops.” two service bureaus, including Syntesis in is when talking about SWIFT. “I don’t think you payment instruction or SWIFT message will arrive at its destination want that standardisation of visibility into their transactions and
Europe. They have about 70-80 corporates really see ‘plug-and-play’ in this space,” says as intended and that the instruction will be executed. That is balances, particularly on the payments they are making and receiving,”
Marcus Hughes, director of business Durkin. “The technology is evolving in regards he explains.
in the French market, and those French enough for some, but not for others.
development for Bottomline Technologies, to what can be done, but I think that focusing on
corporates do the full on-boarding themselves.
agrees that Alliance Lite2 will “put some ‘plug-and-play’ really minimises the importance Some users have to have greater oversight because they need to know Corporates can go to the next level, in terms of technical messaging, if
In Europe we see much more ownership of that
pressure on the service bureaus”, particularly of what we’re doing with payments today.” the status, as there may be something important going on. For example, they require more information. ACK and NACK messages are basically
process by the corporation, whereas in the US,
those that do not provide any services other they may have a short space of time to make an acquisition, or the confirmation messages that SWIFT has received your messages, which
we see a tendency that the corporates truly Although standardisation remains a hot topic,
than SWIFT connectivity, and predicts that it payment instruction may be of a particularly high value. can then be passed back to the sender of the original messages. A
want to buy a ‘plug-and-play’ solution where service providers are beginning to recognise
will drive consolidation in the service NACK message means that the message from the corporate has been
the vendor also takes ownership of the bank that standardisation in payments can only be
bureau market. This is arguably no bad thing. Essentially there are two forms of status message used over received but cannot be processed. It may not be properly formatted and
All articles © 2012 C-Stream Limited
All articles © 2012 C-Stream Limited
on-boarding process.” taken so far. This may already be leading to a
“The bureaus have almost been a victim of SWIFT: business messages and technical messages. The business cannot be sent on to the intended destination. The message will not
their own success,” says Hughes. “There Demand for a ‘plug-and-play’ solution was shift in focus. “I’ve taken a different approach messages will probably be the most familiar to corporates: in the cash get to your bank to make a payment and instead is stopped at SWIFT.
are too many small bureaus out there just one of the factors that led to the introduction lately,” concludes Vandebroek. “I think we’re management arena these are the MT 900 and MT 910, covering debit The NACK message allows SWIFT to alert the SWIFT service bureau
providing connectivity, and I think it has been of Alliance Lite in 2008. “Alliance Lite was getting to the limits of standardisation and we advice and credit advice. Then there is the MT 942, an intraday update, (SSB), who then lets the original corporate sender know. Conversely, an
recognised that they are a point of risk for designed to be ‘plug-and-play’, yet we have just have to embrace variance from now on and MT 940 for prior-day information. These are the messages that ACK message means that the message from the corporate has been
large multinationals linking to large banking learned that while corporates were looking and start being smarter in terms of how we corporates might require for good visibility covering, and in some cases received by SWIFT and been sent on to the destination bank.
groups via a tiny bureau.” In order to address for this ease of implementation, their product manage it.”
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2. a buyer’s guide to SWIFT SERVICE BUREAUS 2012 a buyer’s guide to SWIFT SERVICE BUREAUS 2012
Following the Basic Flow • oes the SSB have a 24 hour, seven days
D
Corporates, through an SSB, can send a file a week service desk available for corporate
over the live area network (LAN) of that bureau. clients?
This could be a secure file transfer protocol Beyond this, there are some fine points that
(SFTP) or a linked line, for example. There are should also be addressed. “What corporates
a wide range of connectivity options depending should look for when they are selecting an SSB
upon the requirements for specification and to work with is their global reach, together with
degree of security that the corporate wants. local expertise,” says Christoph Stiefel, senior
Usually the SSB will help advise the corporate sales manager corporate market, Fundtech/
on this. BBP. For global reach, this could mean asking
That file then enters the bureau’s infrastructure. if the SSB has more than one data centre and
The SSB may then validate the file to check where they are situated. Local expertise is also
that it is properly formatted, and the message important, as many markets will have a local
will then be routed to SWIFT. The bureau then flavour when it comes to data formats and legal
receives either an ACK or a NACK from SWIFT. requirements, for example.
The ACK or NACK can then be made available It is also advisable to ask what experience
to the corporate so that they will know the
the SSB has with corporates. “Most service
status of the message, its receipt by SWIFT
bureaus work in the banking area and are not
and whether or not it can be processed.
at all experienced with corporates,” says Stiefel.
SWIFT will forward the original file to the SWIFT itself has published a recommended
addressee of the message. For corporate list of service bureaus for corporates on its
treasurers, this will most likely be to a bank to website. This is a good starting place when
make a payment. It could also be, in the funds looking for an SSB that will be able to handle
world, a counterparty to buy or sell funds, or a your status messaging needs as a corporate.
request for a custody statement. A whole range Everyone on this list should have good
of SWIFT messages can be handled on this experience in rolling out commercial payment
basis where the status can be tracked. and bulk payment messaging infrastructure for
corporates. Qualifying bureaus on this list need
For the last leg of the journey from SWIFT to
to have a certain number of corporates with a
the bank, SWIFT can offer delivery notifications.
certain number of banks.
These are technical messages, which are used
mainly when banks only have their SWIFT It may also be advisable to ask the SSB to
interface open for a short while. For example, put you in contact with a corporate client
if you were in the UK and you wanted to know data transfer and data transformation options. Sophisticated Solutions any alert appears on the SWIFT payment hub, provide help with any message reformatting that has already gone through a successful
if your bank in Indonesia had downloaded its Examples of solutions here include Bottomline where it will only be visible to users with the that may need to occur. implementation, to see how they are finding
Some SSBs can arrange for corporate users
SWIFT messages for the day, then you would Technology’s Transform Connect and IBM relevant privileges. An alert could be sent the status message experience. While the
to receive email alerts on the message Some SSBs will help catch invalid messages
ask for a delivery notification from SWIFT. Sterling Connect:Direct. These robust and by the SSB as a pdf or an XML message, for SSB will most likely select their best case
status. For example, setting up email alerts before they go to SWIFT with a reformatting
This would confirm whether the bank has secure connections can provide more reliable example. The format should again be set by study for you to talk to, first-hand information
for instances of failure allows the treasurer to validation service. They can liaise with their
downloaded its SWIFT messages and therefore the corporate in the implementation process to from a fellow treasurer will give you a greater
visibility and a more detailed trail than you manage the process by exception. corporate clients to ensure that the correct
whether it would execute your instruction. A make sure that they are receiving the best fit insight into the day-to-day operations than any
would find merely accessing the information Corporates do not have to receive all of the message type is sent on, thereby avoiding
short while later you would (hopefully) see an for their systems and processes. amount of marketing from an SSB will. The
online in the basic offering. These more robust information generated all of the time. When waiting for a NACK message to be sent back.
MT 900, for example, to show that your account SSBs themselves need to be able to respond to
solutions allow corporates to reconcile their going through the implementation process Another service some SSBs offer is a This service could also be used to enrich
with that bank had been debited and that they different budgets and requirements that exist
messages at each step, and all of the data can with an SSB, the corporate can set out the ‘watchdog’ arrangement where the corporate the original data sent by the corporate, for
had executed your payment instruction. These among the wide variety of treasuries, so try to
be uploaded into the treasury management circumstances in which they need to know will only receive a status message that example to correct an incorrect bank identifier
are sometimes called zero series messages. speak with a treasurer from a similar size or
system (TMS) or enterprise resource planning about certain message status types. The meets the criteria of a few select instructions code (BIC).
The Corporate Experience bureau can then ensure that they receive this agreed with the SSB. These could be high industry to your operation.
(ERP) system, allowing SWIFT status messages
information quickly, as well as send reminders value payments or messages addressed Checklist for Evaluating SSBs
Status tracking can take several forms with to be viewed in the corporate’s own system. Conclusion
SWIFT. An SSB will offer a range of services if nobody on the corporate side has opened to particular counterparties, for example. Asking the right questions during the evaluation
If the corporate uses more than one TMS or Solutions such as these add granularity to the The entire status message process can appear
in that environment to meet the needs of its the update message. phase can help ensure that you end up
corporate’s experience. daunting from the outside in, but the reality
customers. In the most basic scenario, the ERP solution, it is advisable to implement a partnering with the best SSB for your status
When an SSB passes information back to does not have to be that way. A good SSB can
corporate user can view the SWIFT messages payment hub that links all of their systems. Cannot Compute: What Happens When messaging needs. We have covered some of
the corporate about a message failure, the provide the corporate treasurer with the power
on the network, and items such as ACKs and Again, this is an area where some SSBs these already:
detail of this alert can vary according to the a Message Fails to control what information they receive and
NACKs, remotely via the internet. The corporate can provide a solution. Some can host the requirements of the corporate. The alert may • ow resilient and robust is the SSB’s
H
Should a message sent from a corporate fail, how they receive it, and to act as a translator
All articles © 2012 C-Stream Limited
All articles © 2012 C-Stream Limited
may not necessary know what they are looking payment hub for the corporate in the cloud, infrastructure and transmission technology?
simply be along the lines of ‘payment number the response will depend on whether they have to turn seemingly meaningless acronyms
at but, depending on the level of involvement or the corporate can host the payment hub xxxx has a problem’. Alternatively, more detail detailed monitoring, what the failure is and and IT jargon into actionable data. At a time
the corporate wants, some SSBs can translate themselves. The payment hub is another • ow much control does the corporate have
H
around the nature of the issue can be provided. where the failure has occurred. Generally it is when visibility over cash management and
this information into ‘client speak’. example of how corporates can gain the over the status messages they receive and
In addition to setting this level of detail during important for the SSB to have a service desk payments is more critical than ever, working
visibility they require over the status of their the level of detail in these messages?
In a more sophisticated bureau offering, the the implementation, corporates also can set that is available 24 hours a day, seven days a in partnership with an SSB can give treasurers
corporate gets to view the status more easily. SWIFT messages because all the information is how they want to receive the alert. While an week, in order to advise their corporate clients • an the status messages be easily uploaded
C clarity over the status of their financial
This is where an SSB can offer more robust aggregated in one area. email may suit some, others may prefer that on any message failure that has occurred and into the TMS/ERP system? messages and payment instructions.
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