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SWIFT decided to move to XML standards in year 1999. Since then, we have been hearing about
MX standards (XML based). In all SWIFT presentations I have seen so far, I always hear about MX messages. SWIFT also maintains and releases MX standards every year. I always get a message that SWIFT will finally be moving everything to MX, but I never get
a concrete end-date!
Yes, we should not move to new technology/approach for the sake of changing! But here, I clearly see a case for moving towards XML based SWIFT messages. From SWIFT, I see a strategy of co-existence of 2 standards for 1 objective. Why would anyone do that!
Is it just because SWIFT has done extensive investment to evolve and support MT standard?
I think format of MT messages is not the best way to represent any message especially when it is so evolving and require updates every single year.
Moving completely to XML based would have immediate benefits:
SWIFT has been through major changes before and should not hesitate to do this again if change brings long term benefits. With every growing volume of SWIFT messages and SWIFT customers - good changes should come sooner than later.
I'm sure the inertia doesn't only come from SWIFT. The problem is the volume of existing applications that create and consume SWIFT MT's. These are widespread and they work. It's therefore hard for anyone using SWIFT to build a business case for what is
a technical change, i.e. from MT to MX, regardless of the promise of being easier to use in the future.
By supporting both, new applications can us the MX standards, and people can migrate their old applications as and when new functionality is required over time. e.g. Target2, SEPA Payments etc.
I agree with all the benefits you list for XML messages, and I would also like to see a greater speed of adoption. However you should not forget that this time SWIFT is not defining the messages alone.
They have joined forces with FpML / ISDA, FIX, and ISITC to create the new common financial messaging standard within the ISO 20022 framework. It always takes time when you have to design anything by committee, and in this case even a committee of committees,
but it is better than have several competing standards.
I think the result will be worth waiting for.
Hi Ron, Joergen,
Thank you for your comments...
I agree to both of you and know that this is going to take sometime.
I am not sure if today all MTs has a counter MXs message. Until last year this was still in process. I believe that every activity/task must have end date otherwise it becomes a never ending process and you may not see output as efficient as you expect from
the amount of invested time.
Today, everyone is trying take some cost cutting measures. I don't think moving towards MX Standard is being considered by many to be simpler, more efficient and cost effective; otherwise we would have seen better adoption.
Interesting blog, but we have to remember as Ron says why change for changes sake. Everyone needs a business case in order to change something.
Sometimes the business case isn’t there and sometimes, even if it is, the key sponsors don’t buy into the business case due to other priorities.
This is the same with SWIFT.
I believe that SWIFT’s stance is that not all MT’s will necessarily have a corresponding MX message.
If they need to make a significant change to an MT then that would naturally be a catalyst for creating a MX, if one doesn’t already exist. Likewise if a new business market requirement evolves (as we saw with the likes of Exceptions & Investigations) then
the messaging standards would be created in the MX world and not the MT world.
Coexistence is a must.
SWIFT is there to service a community that is comprised of two ends of a spectrum, the Tier1’s and the Tier4’s banks plus everything in between and now an ever increasing number of Corporations. All have a different level of sophistication when it comes
to business and indeed supporting IT infrastructure, not all can adopt change at the same pace.
One of the major benefits of SWIFT is its reach / community (7000+ Banks). If each change SWIFT made was implemented through a big BANG approach the inability for all to keep up would destroy the ability for the community to communicate, firms would look
to other means / other networks / other standards.
Lastly, let us not forget that SWIFT is a cooperative owned by its member banks and governed by what the community wants and asks for. If SWIFT isn’t moving a quickly as the banks would like who is to blame?
I think we'd like to first thank Colin for his comments above. I'm not sure we could have said it better ourselves. Obviously coexistence is a very important topic for us here at SWIFT and I am personally involved from a Standards point of view in helping
to manage these issues with our community. And, as Colin rightly points out, it is that very community that sets the pace of adoption for any set of new messages (MTs or MXs). We are doing our best to reinforce our toolkit of products that support MX message
implementation and re-focusing some of our efforts on the core values of ISO 20022 (the repository, the models, and the data dictionary). SWIFT remains deeply committed to supporting its customers in adopting the new MX messages wherever it is appropriate
and we also recognise that many are still getting good STP rates from our traditional MT messages. That's what 'coexistence' is all about.
19 Mar 2009
15 Nov 2019
04 Nov 2019
09 Oct 2019
This post is from a series of posts in the group:
A community that concentrates on SWIFT as an important business tool in the payments and standards world.
Carlo R.W. De Meijer
30 Dec 2019
18 Nov 2019