Globsyn Infotech

SBI eyes Point of Sales Market

2010-04-07T18:23:00.001+05:30

After installing maximum number of ATMs across the country the government owned State Bank of India (SBI) is aiming to become the market leader in the POS (Point of Sales) segment with a target of installing five lakh swipe machines across the merchant establishments in the country. Currently in the POS market ICICI bank has over 1.5 lakh swipe machines, followed by AXIS bank with over 1 lakh machines and HDFC Bank having 75,000 machines.

Once installed POSs help banks to generate revenue, as with each swipe the bank gets its share from the small fee paid by the merchant establishments where the machine is installed. Moreover with RBI’s new proposal that cash can be dispensed through POS terminals at merchant establishments for a fee, SBI’s initiative is surely going to help them in getting a bigger share of the pie from this segment.

SBI is planning to tie-up with VISA, Royal Bank of Scotland and Global Payments to install the POS machines. The Royal Bank of Scotland has POS presence in Europe and Global Payments which is a US based company has tie up with HSBC in India. With this tie up SBI will take a giant leap forward in the payment business. Post installation SBI will become the biggest automated cash dispenser of the country with its combined strength of ATMs and POSs.

Contributed By:
Mr. KRS Mani
SWIFT Consultant

ASBA

2010-03-22T18:46:00.004+05:30

‘Application Supported By Blocked Amount’ or ASBA is used during the Share Application process by Individuals while applying for new shares coming in the market in forms of Initial Public Offer (IPO) or Follow on Public Offer (FPO).

The current practice that is followed so far is that the applicant submits a filled up application form along with a cheque for the amount of shares, to the registrar. Then the amount is debited from the account of the Individual and kept in an ESCROW Account. Once the allotment process is over the amount is adjusted against the shares allotted and the balance is refunded by way of a banker’s cheque/demand draft through courier.

With the computerization of the banking sector the scenario has changed over a period of time and core banking is the norm for all banks including private, public, and co-operative banks. This helps a user to access any account from any branch of the bank anywhere in the country.

This technology revolution in banks has helped SEBI (Stock Exchange Board of India) to come out with new innovations to facilitate people who invest in stock markets by introducing ASBA facility. In this process the payment for the shares applied for is not done immediately, but the amount is held blocked in the applicator’s account and as and when the shares are allotted the required amount is debited from it and the blockage is removed. This facility saves time and energy and also saves on Printing, Stationary and labor costs. This contributes in reducing the carbon emission.

With this kind of an arrangement the public is getting benefitted as the amount is debited only when the shares are allotted and the interest loss during the process which generally takes a month can be saved. The possibility of the cheque being lost in transit can also be avoided. The banks are also benefitted from this process as the deposit remains with the bank till the time the shares are finally allotted and thus helping it in CRR and SLR maintenance.

Despite having so many advantages it is yet to become popular among the common people and the primary reason of it is ‘lack of awareness’.

I have myself faced a situation when I wanted to apply for some shares of a company using ASBA and went to Worli North branch of State Bank of India (SBI). When I requested for ASBA form there, I found people were not aware of the new system despite the bank’s website showing the branch among the designated 1061 branches which can issue and accept ASBA form.

After explaining the system to them I was advised to visit their Capital Services branch where I found the situation was no different. This time I was also carrying the newspaper advertisement of ASBA but still the officials there could not help me and instead directed me to go to the Main branch of SBI at Mumbai Samachar Marg. After these two incidents I lost interest in using the new ASBA system and applied in the old system.

My above experience gives food for thought to SEBI who has introduced the system but the stakeholders of the system are not fully aware of it right in the city of Mumbai forget the rural areas. It is also a responsibility of the banks to educate its officials about any new service that it has started so that the common people do not suffer due to lack of proper knowledge of the bank officials.

Contributed By:

Mr. KRS Mani

SWIFT Consultant

Corporate Access to SWIFT

2010-02-22T12:46:00.001+05:30

The issue of ‘Corporate Access to SWIFT’ was put on vote at the 2007 Annual General Meeting of SWIFT. Before that the issue was discussed in different committees of the board and was included in numerous papers to share it with wider community.

Anyone associated with the BFSI industry are aware that SWIFT does not sell directly to corporates rather it offers connectivity and creates awareness. The applications and services are offered by banks and third parties and it is important that this distinction be understood.

As far as corporate customers are concerned direct connectivity to SWIFT means cost effectiveness. Once connected, the Corporate Customers are able to choose one of the following existing and Board /AGM approved governance models in consultation with their Bank counterparts:

SWIFT Standardized CORporate Environment (SCORE)
Member -Administered Closed User Group (MA-CUG) or
Treasury Counterpart

Once this system is operational each corporate will be registered with a SWIFT id called Business Entity Identifier (BEI) and they will have to look to their Banks and vendors to provide the required business functionality. With the use of Swift Message Standards, corporates are allowed to exchange messages only with Banks. Currently corporates are permitted only to use payment related messages. Post the proposed changes it will be a matter of choice for the corporate to design their relay system independent of the connectivity option.

Contributed By:
Mr. KRS Mani
SWIFT Consultant

ATM Shops

2010-02-19T11:44:00.002+05:30

One of the payment gateways which has revolutionized the Banking scene is the introduction of ATM Machines - called Automatic Teller Machines or Any Time Money.

The western concept of automatic money dispensing machines without human intervention was slow to catch up as people in India were not computer savvy and a less literate populace was suspicious to use gadgets and machines for an important function like withdrawing cash from their accounts.

With the opening up of the economy Indian Banks faced tough competition from foreign banks. One of the popular services provided by the foreign banks was the ATM service. Once this competition heated up, Indian Banks started installing ATMs all over and there was almost a race to set up the ATMs by the public sector banks and ATMs were installed both ‘on site’ and on ‘off site’ locations. In Railway stations and public places ATMs of various banks started cropping up and banks like UTI bank (now called AXIS bank) installed two ATMs in one railway station. The penetration of ATMs in the urban areas was fast and slowly all the district places were covered. Every bank’s ‘Department of Information Technology’ had huge targets to complete and huge money was invested on hardware. ATM cards were given to all account holders free of cost and thus machines replaced the ‘Human Teller’. People started getting better quality currency notes from ATM as they would not function otherwise.

Currently ATMs are managed and serviced by the respective bank’s branch to which it is attached. With the Introduction of Core banking solution in all the banks the ATMs got connected by a SWITCH and one could access their account from any bank's ATM and get their payment. For this a fee was prescribed and all banks participated in the same because their customers benefited with access to a large network of ATMs.

RBI reviewed the policy of charging customers while using other bank’s ATMs and they abolished the fee and made it free from 01-04-2009. After few months banks complained that their cost of operations were not getting covered due to increase in small withdrawals.

To solve this RBI came with modified instructions of ATM usage. Now customers would be allowed five withdrawals each month from other bank’s ATMs free of charge and from the 6th withdrawal onwards they would be charged for withdrawing from other banks ATMs and the upper limit of withdrawal was fixed at Rs. 10,000 per transaction.

This became effective from 15th October, 2009 and is applicable only to Savings Account Holders. The move was to help customers get access to the payment gateway which is nearest to him without burdening him with high cost of service charges. The charges incurred for the first 5 withdrawals from other bank's ATMs if any, are borne by the bank.

Recently RBI has come out with a new outlet for payments and that is both novel and innovative. They have authorized all the merchant establishments and card acceptors to make payments of cash up to one thousand for a small fee. This is a bold step as so far nobody was allowed to dispense cash on swiping the card except banks and their ATMs.

This new facility is a boon as you can get cash from anywhere where a card is accepted and use the card for drawing emergency cash or regular withdrawals from your nearest outlet.

Now you can visualize many shops opening up, having a swiping machine, with the sole purpose of dispensing cash. It will be like the telecom boom when STD and Phone booths opened all over India and you could see a phone booth round the corner with phones and a printer printing out the charges incurred. The indirect ATM outlets could connect the whole of India faster and bring the technology to the doorstep of the common man and the banks closer to their customers.

Contributed By:
Mr. KRS Mani
Swift Consultant

Sibos 2009

2010-01-21T10:05:00.002+05:30

Yawar Shah, Chairman, SWIFT

Lázaro Campos, CEO, SWIFT

DepositNow! online check deposit

2010-01-21T10:04:00.000+05:30

SIMpass Mobile Payment Solution

2010-01-21T10:01:00.001+05:30

Use of Web 2 dot oh in SWIFT

2010-01-21T09:52:00.001+05:30

Future of Payment Solution and Messaging Standards

2010-01-07T13:27:00.002+05:30

When we talk about payment solution and messaging standards only one International Organization meets all the requirements and that is SWIFT – The Society for Worldwide Interbank Financial Telecommunication. It has taken the onerous responsibility of standardizing all the various types of messages originating between two financial Institutions engaged in international trade. They are the authority for giving Bank Identifier codes (BIC) to Financial Institutions and Business Entity Identifier (BEI) to non Financial Institutions/Corporates under ISO 9362. They have put an end to the earlier Telex and Telegraph system of communication and introduced the benefits of the technical advancement in Telecommunication and Computer Technology in the way banks communicate with each other. One of the major areas covered is the Payment Solution and over a period of time it has been fine tuned to take care of the latest requirement of Know Your Customer (KYC) and Anti Money Laundering (AML) norms.

RTGS or Real Time Gross Settlement payment systems of various countries are integrated with SWIFT, e.g. SEPA, TARGET 1 and 2 etc. In our country the RTGS payment solution used for settling funds is similar to SWIFT called The Structured Financial Messaging System (SFMS). This system is controlled by the Reserve Bank of India (RBI) and all banks have to subscribe to the same. RBI has made two Payment Solution systems for India – National Electronic Fund Transfer (NEFT) and RTGS. Payments below Rupees One lakh are sent by NEFT and above One lakh are sent by RTGS. The reason behind it is not to overload the payment network as there is a heavy load of small value payments.

The hardware and software infrastructure required to run SWIFT is very simple. The Swift system can work in Unix and Windows operating systems and a suitable server may be configured as required by the bank looking into the volumes and load.

The softwares available in India for the SWIFT Solution are:

Swift Alliance Gateway (SAG) & Swift Alliance Access (SAA) – Product of SWIFT Scrl, Belgium.
Turbo SWIFT – A product of Bank Serv, London.

Though there are many other vendors of SWIFT software approved by SWIFT but they do not provide service in India. For RTGS transfers the software prescribed by RBI is to be purchased.
The Telex service in India has been discontinued and there is no other system to communicate between banks apart from SFMS provided by RBI, which is still not used by all the banks. Only the payment solution of FMS i.e. payment messages are used by banks to make payments between them. Other types of SFMS messages are not used by the banks.

If Payment Solution is taken we have to consider the various methods used for payments.

National Payments Corporation of India (NCPI) – a Company which operates retail payments.
Centralized Funds Management System (CFMS) – Facilitating own account funds transfer across offices of the bank. CFMS is used as a mode of funds transfer to achieve National Settlement System (NSS).
RTGS – available at more than 55,000 branches across the country.
NEFT – available at more than 55,000 branches across the country (NEFT is extended to NEPAL under the Indo Nepal remittance Facility Scheme).
National ECS (NECS) – NECS leverages on the core banking enabled network of bank branches with access from a centralized location, thus providing pan-India coverage.
Local ECS extended to 76 major locations in the country.
Cheque Truncation System (CTS) successfully implemented in New Delhi and MICR clearing discontinued.
MICR Cheque Processing centres (MICR-CPCs) at 71 places.
Speed clearing was made operational to provide a facility for realization of outstation cheques at the local centre of deposit. It is available in 64 MICR-CPC locations across the country.
Mobile Payments using mobile phones – as per the guidelines issued in October 2008.
Automated Teller Machines (ATM) Payments – Now any customer of any bank can withdraw money from any ATM free of cost for a limited number of times every month. Further other operations like making a payment for credit card or paying or recharging your mobile or making payment of bills are all possible through ATM’s.
Payment through Credit Cards or Debt Cards.
Clearing Corporation of India Limited (CCIL) is used by banks to settle interbank deals and payment done by single settlement at the end of day.
Multicity Cheques issued for the use of local payment in different cities.

RBI has planned to improve the payment system further by 2012 and some of the steps in that direction are:

Implementing a feature rich new RTGS System: RBI is planning to move to a new version of RTGS where technological advancements are leveraged to provide better features and scalability. It will be similar to RTGS available in other countries which will enhance the flexibility in operations and liquidity saving features.
India Moneyline – a 24 x 7 system for one to one fund transfer: At present the NEFT system operates from 9 am to 5 pm and up to 12 noon on Saturdays. RBI is considering extending NEFT operations on 24x7 basis which is similar to United Kingdom.
India Card – A domestic card initiative: At present the Indian Banks are using Visa and Master Card affiliations where in the domestic payments amounting almost 90% of the total volume are being routed and processed through a switch located outside the country. Due to the absence of a domestic price setter the Indian Banks are paying a high cost for this facility. Therefore the apex bank is considering a similar domestic payment card – INDIA CARD, and PoS switch network for issuance and acceptance of payment cards.
Redesigning ECS to function as a true Automated Clearing House (ACH) for bulk transactions: At present 76 centres have the local ECS for bulk transactions like ‘one to many’ and ‘many to one’ functions. These processes are being centralized by launching NECS at Mumbai. The indigenously developed ECS/NECS is being redesigned to make it a feature rich, hi-tech ACH network to provide end to end STP.
Mobile payment settlement network: Mobile Phones are emerging as an important tool for transmission of payment instructions. The key to make mobile payments efficient is adequate security and Real Time transfer. At present the banks are using the existing payment systems for settling interbank mobile transfers. RBI is planning to build a national infrastructure for facilitating Real Time Mobile Payments.

Contributed By:
Mr. K.R.S. Mani

Changes in SWIFT message standards

2009-12-14T11:46:00.005+05:30

Society for Worldwide Interbank Financial Telecommunication or SWIFT operates a worldwide financial messaging network to exchange messages between banks and other financial institutions. Every year in the month of November it upgrades the ‘Message Standards’ to include the latest changes in the domain. This year the changes have been mainly in payments messages. Apart from that a few minor amendments were made to streamline the standards portfolio. The SWIFT Board of Directors reduced the scope of the release keeping in mind the global financial crisis and to minimize the burden on Swift Users.

The changes introduced by SWIFT in the payment messages categories are in :

1 – Customer Transfer messages
2 – Financial Institution Transfers, and
9 – Special Messages

This is due to the regulatory requirements of Anti-money Laundering (AML) and the need to have full transparency on payment originators and cover payments, in the fight against funding of terrorism.

The following important changes have been made in payment messages:

Additional validation has been applied to field 50F – Ordering Customer in Message Types.

101 – Request for transfer
102 – Multiple Customer Credit Transfer
102+ Multiple Customer Credit Transfer - STP
103 – Single customer Credit Transfer
103+ Single Customer Credit Transfer - STP
210 – Notice To Receive, and
910 – Confirmation of Credit

After these changes messages will be NAKKed if use of this field is non compliant to the existing rules. It will further reduce manual repairs & queries and will improve straight-through processing (STP).
The new general use messages MT 202 COV (General Financial Institution Transfer - Cover) and MT 205 COV (Financial Institution Transfer Execution – Cover) are introduced. In these messages it will be mandatory to include a copy of selected fields from the underlying customer credit transfer sent by cover method. This will allow correspondents involved in processing the transaction to screen payments in line with AML regulations.
MAC (Message Authentication Code) and PAC (Proprietary Authentication Code) trailers are no longer allowed in block 5 of the message.
Where IBAN (International Bank Account Number) validation occurs in MTs 102+ (Multiple Customer Credit transfer – STP) and 103+ (Single Customer Credit Transfer – STP) the country code in the IBAN must be in upper case.

The following messages have been removed from the standards due to non-usage for some years.

MT 106 - EDIFACT Envelope (Max 9600 Characters)
MT 121 - MT 121 Multiple Interbank Funds Transfer (EDIFACT FINPAY Message)
MT 206 - Cheque Truncation Message

The BKE (Bilateral Key Exchange) messages from MT 960 to 967 have been deleted from the system as it has become redundant with the cross over to RMA (Relationship Management Application).

MT 960 Request for Service Initiation Message
MT 961 Initiation Response Message
MT 962 Key Service Message
MT 963 Key Acknowledgement Message
MT 964 Error Message
MT 965 Error in Key Service Message
MT 966 Discontinue Service Message
MT 967 Discontinuation Acknowledgement Message

SWIFT has also decided that they will delete the following message categories in the next upgrade.

3 - Foreign exchange and Loan / deposit transactions
4 – Collections5 – Securities
6 – Metals
7 -Documentary Credits
8 – Travellers Cheques
N - Common Group

The detailed documentation of the changes can be found in the Standards Release Guide and Message Format Validation Rules.

Contributed By:
Mr. K.R.S. Mani

Question on SWIFT

2009-10-14T18:14:00.001+05:30

What are the requirements and dependencies for integrating SWIFT with internal back-office applications ?

Question on SWIFT

2009-10-14T13:40:00.001+05:30

What are the Hardware and Software requirements to implement SWIFTNet?

Question on SWIFT

2009-10-14T10:48:00.006+05:30

What are the different options available to connect to the SWIFT network?

SWIFT - An Overview contd...

2009-10-13T18:47:00.004+05:30

Swift introduced ‘Connect 400’ to plug the problem created by Transmatic Systems. The PC Connect along with Connect 400 was taking care of the message to go from the batchfile to main server and vice versa and renaming the file after the batch is sent. The user can set the timing for scanning at 10 min, 15 min, 30 min etc as per the traffic load. So the time gap between transmissions of message from branch to swift is reduced. SWAP could not upgrade their product to plug this batch renaming problem and was discontinued by some banks and they switched to PC Connect. Now in the year 2000 after Y2K cut over SWIFT started aggressively marketing their new software.

By this time State Bank and Union Bank had upgraded their vax 3400 server with more powerful Alpha Servers which were cost effective and powerful. This ST 400 was running very smoothly and fast in these upgraded Alpha Servers also serviced by Digital and CMC.

Swift Alliance Access and the Swift Alliance Gateway wanted the banks using ST400 to switchover to Alliance suite of products. The platform offered was UNIX and Windows. VMS was scrapped and ST400 software was being phased out. Eventhough ST400 support was there for few more years, they made the banks buy this SAA/SAG by force selling the product.

During that period in the year 2002 Netik company came to India and were giving demos of ‘TurboSWIFT’ software which is an alternate to ST400 and had better features and it was already TCP-IP enabled whereas SAA was not TCP-IP enabled. The SAA vendors - Indigo Technologies went to the extent of giving wrong information and creating doubts in the mind of people about the ‘TurboSWIFT’ which is in fact a SWIFT approved software having better features and a strong audit trail used by many Banks worldwide.

After this Indigo, now taken over by SSI Technologies sold SAA to all the banks using ST400. Banks using Nova swift continued using Nova Swift. Swift then was busy changing the SAK (Swift Authenticator Key) to BKE (Bilateral Key Exchange) and introduced Secure Card Reader for the same. This was used to login and select to swift operations and also in exchanging keys automatically generated by computer. Here the manual exchange of keys was discontinued and all key exchange was automated and secured. After a few years the secure card reader was upgraded to accommodate 32 character security strings and was made more secure and strong.

There was an upgrade on the connectivity to swift and TCP IP enabled connection was introduced. The existing Leased and dial up standby connection to swift access point (SAP) was done away with and all users had to migrate to the new system by subscribing to one of the service providers namely AT & T, Colt, Equant, or Infonet. Majority of the banks signed up with Infonet and very few with AT&T and Equant. Colt had no presence in India.

The concept of digital signatures and RMA (Relationship Management Application) was introduced and implemented and BKE was discontinued. For this they required to install HSM boxes / HSM tokens depending on the volume of message traffic and the RMA Migration Phase 1 and 2 went very smoothly with Union Bank of India being the first bank in India to complete the migration successfully.

The advantages of this system were that the keys were permanent and that no renewal is required. Further selective restriction of tested messages being received can be enforced. Generally this is not done and all banks have test key for all the message types with whomever they are having testing arrangements. In the year 2009 Swift has planned to revise and introduce some message standards in November.

Over these years the swift support for SAA/SAG also saw changes as Indigo was taken over by SSI and subsequently SSI was taken over by Scandent and Cambridge taking over Scandent. In Indian environment support is expected to be given on all working days including Saturday and if need be on site also. Since the AMC is being paid for the software the company retained by swift is expected to give support. But it was surprising that Cambridge was charging extra for support and a contract for preventive maintenance was being taken from banks to give support on site. Now we hear that they want to charge for telephonic support also. Then Swift should not charge such exhorbitant sums for AMC. Further, this concept will not work in India. It is high time all the 15 vendors approved for swift software compete in India, and we have a choice to select the best suited for our requirement and who gives support like how we like to have and not end up paying for even talking to them.

Contributed By:
Mr. K.R.S. Mani

SWIFT - An Overview contd.

2009-10-08T11:20:00.001+05:30

SWIFT In India

Reserve Bank of India introduced Swift messaging system in India in 1990 and it became operational in 1991. All Banks were forced to take the system even though it was very costly and the banks were in infant stage of computerization. The World Bank and IMF wanted the system introduced as the Banks in the West were already computerized and wanted the banks in the world to send them computer enabled messages so that it can be automated and manual intervention can be reduced.

At that time worldwide Telex and Telegrams were in use as the best means of communication but they had their own drawbacks and one of the prime focuses of this alternate system was to automate the TELEX messages. SWIFT brought together the Banking community and harnessed the developments in telecommunications and utilized them for international trade and messaging from one country to another in a big way. They could standardize all types of transactions and format the message types to be exchanged between two banks of different countries.

During the introduction of Swift the cost of two servers came to almsot Rs. 1 crore, the motorola codex modems costing 80,000/ each, and the software cost which was additional. The original swift ST 400 package purchased by banks were having both swift and telex messaging facility. In case message did not go through Swift it can be routed through Telex. But this telex function did not work from day 1 due to technical problem with DOT and many banks exchanged this software with PC Connect or taking additional licencce of ST400 for their foreign branches. It was a transformation and a change which simplified the messaging procedure and was easy to operate. THE MESSAGE STANDARDS were modified and changed many times as per the suggestions of the user community:

In the beginning the following hardware and software were available in India.

Digital company's VAX 3400 servers and VMS operating system. This was serviced by Digital Company and CMC of India.
1) ST 200 or 2) ST400 software for swift operations.

Another software is NOVA Swift which was available and it was taken by few banks. Many Banks took ST400 and few of them took ST200 software marketed by Swift SCRL. The support for ST200 and ST 400 were provided by FINLINK, a software support firm. There was branch connectivity software PC Connect. But initially all banks took the main CBT product and simultaneously used the telex as well for communications. The PC Connect was also new and costly.

After initial teething troubles were over banks wanted to connect their branches with swift. Transmatic systems a vendor of telex was marketing SWAP a similar product like PC Connect for branch connectivity and it was working properly and the cost was low as around Rs 25,000/-per connection. The banks went for the same. Here the messages sent by the branch was sent to CBT by dial up mode using PSTN line and it was transported to the main server using batch input/output method. The problem was the messages going twice if the batch were not renamed after use. This was a risk and there was no alternative to it.

To be continued...

Contributed By:
Mr. K.R.S. Mani

SWIFT - An Overview contd.

2009-09-18T10:18:00.001+05:30

In 1992 after the successful completion of the pilot scheme during the first half of the year, the Interbank File Transfer (IFT) service goes live on 1 July. By year end, 65 banks have signed up for the service to handle a range of bulk data transfers including mass payments, cheque truncation and internal reporting.In 1993 Security and data integrity are strengthened by introducing smart cards for log-in and bilateral key exchange via the network. A new UNIX-based interface is launched. SWIFTAlliance responds to customers’ needs for multinetwork, single platform processing capabilities.

In 1994 AccordWorkstation, SWIFTAsset Reconciliation, SWIFTAlliance, and USE deployment are a few of many new products and services launched. Infrastructure projects become an increasingly important part of SWIFT's work.

In 1995 SWIFT opens its Frankfurt office. The new Asia-Pacific Council, representing the SWIFT needs of the ever expanding Asia-Pacific region, meets for the first time in Beijing.

In 1996 SWIFT steps up its straight-through processing (STP) drive with a dedicated team and solutions that address the root causes of non-STP-compliant messages. They also introduced the new Ecu Banking Netting Service.

In 1997 Swift announced its plans to introduce and develop SWIFTNet - a family of IP-based products and services.

SWIFT increases connectivity, grows FIN traffic, progresses STP and supports market infrastructure initiatives in clearing and settlement and trade.

In 1998 the SWIFT Board transforms the Securities Board Task Force into the Securities Steering Council. Non-banks — investment managers and securities brokers — are invited to join the Council.In 1999 SWIFT starts the year with euro changeover and ends it ready for Y2K. In between it launches Bolero and wins the GSTPA bid.

In 2000 SWIFT announces plans for two services SIPN, SWIFTNet Link and SWIFTNet PKI, SWIFTNet Interact are deployed while new XML standards methodology is being developed. swift.com is rebuilt and work begins for the e-enabling of customer activities such as ordering and billing.

In 2001 SWIFTNet went live - the Single-window access to and for the global financial industry.

SIBOS cancelled for the firsrt time due to September 11 attacks on the World Trade Center.

On 15 August 2002, SWIFTNet Release 4.0 went live and concurrently the first SWIFTNet FIN message was sent. This date was targeted nearly two years ago and marked the beginning of the SWIFTNet migration. SWIFT successfully drives ISO 15022 migration.

In 2003 Austria adopts SWIFTNet for its domestic payments system. SWIFTNet migration starts with first country window migrations. ISO 15022 migration completed. Italian RTGS moves to SWIFTNet services. MT 103 migration completed. SWIFT yearly traffic reaches the two billion FIN message mark, doubling in volume since 1999.

In 2004 SWIFTNet migration is completed. Corporates are high on the agenda at Sibos 2004. SWIFT Honoured with “Dream Team Award” World’s second largest pension fund adopts SWIFTNet FileAct. ISO 20022 is published and deployment gets underway.

In 2005 X.25 network dismantled. SAP joins over 300 solution providers including IBM, Microsoft and Oracle and announces the company will SWIFT-enable its ERP. TARGET 2 chooses SWIFTNet. Swift focuses industry attention on Giovannini Barrier One. Swift further aims to reduce its pricing by 50% by the end of 2006.

In 2006 the first CEO of SWIFT Carl Reuterskiold passed away. SWIFTNet Phase 2 pilot operation was successful, and it was the year of preparation for TARGET2.

To be continued...

Contributed By:
Mr. K.R.S. Mani

SWIFT - An Overview

2009-09-14T17:47:00.001+05:30

Swift is a member owned cooperative society for Worldwide Interbank Financial Telecommunication through which the financial world conducts its business operations with speed, certainty and confidence. Presently over 8,300 financial Institutions, securities institutions and corporate customers in 208 countries exchange 16 million messages daily between them through this messaging system.

The Origin

The ambitious idea of setting up the SWIFT system was conceived by a handful people in 1973. Later it got the support of 239 banks in 15 countries. The objective of the project was to create a shared worldwide data processing and communications link and a common language for international financial transactions replacing the Telex & Telegram.

The fundamental principles and rules defining the liability and responsibility for the SWIFT system were drafted in 1975 and SWIFT went live in 1977 with 518 commercial banks in 22 countries when Albert, Prince of Belgium, sent the first message. In the next year the first SIBOS (SWIFT International Banking Operations Seminar) was held in Brussels with 300 participants. With the increase in popularity Hong Kong and Singapore became the first Asian countries to introduce SWIFT in 1980. The system has got so popular that it reached the milestone of 1000 members within just 16 years of introduction when Banque Nationale de Begique becam its member.

As the technology was also moving ahead very fast the SWIFT sytem has also gone through many changes to make it more robust and safer. 1981 saw the introduction of ST100 interface. Provision of interfaces and software is now handled through a wholly owned subsidiary, SWIFT Terminal services. To cater to the increasing traffic load SWIFT installed a high volume satellite link between its Operating Cantres. It has also developed a value added service named ‘Ecu Netting’ for Ecu Banking Association.

1987 was a breakthrough year for SWIFT as the members voted to expand the user base by including brokers, dealers, exchanges, central depositories and clearing institutions which paved the way for a rapid growth of the member base.

In 1991 SWIFT received the Computerworld Smithsonian Information technology Award for its work in the field of Standardised Financial Telecommunication, recognising that without its system, financial institutions would have been reduced to an unwieldy combination of paperwork and incompatible private networks, restricting their ability to service the international financial flows.

Contd...

Contributed By:
Mr. K.R.S. Mani