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Is SWIFT doing enough? Is it evolving at enough pace?

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:                  

  • Lower cost to update SWIFTReady Applications – Beneficial to all service providers.
  • Lower cost for all financial institutions to update their messaging solutions every year.
  • Time saving for both, service providers and financial institutions to upgrade their messaging systems every year. Additionally, risk involved for the upgrade will be lower due to XML.
  • It will become simple to implement and update messaging applications for XML based messages. This will result in more number of solutions in market in both open source and proprietary segments.
  • Having more number of SWIFTReady applications in market will ensure good competition, better SWIFTReady applications and yet lower cost.
  • Do not forget many institutions who requires minimal interface to SWIFT. So, moving towards xml based messages will help promote SWIFT as it will be easier to implement and maintain.

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.


Comments: (5)

A Finextra member
A Finextra member 19 August, 2008, 09:57Be the first to give this comment the thumbs up 0 likes

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.


A Finextra member
A Finextra member 19 August, 2008, 11:49Be the first to give this comment the thumbs up 0 likes


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.

A Finextra member
A Finextra member 21 August, 2008, 06:04Be the first to give this comment the thumbs up 0 likes

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.

A Finextra member
A Finextra member 21 August, 2008, 08:23Be the first to give this comment the thumbs up 0 likes

Hi Jay,

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?

A Finextra member
A Finextra member 25 August, 2008, 10:37Be the first to give this comment the thumbs up 0 likes

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.


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