Seventeen financial institutions and two corporates have committed to implement the SwiftNet Exceptions & Investigations (E&I) service for payments STP which has been in live production since 8 September.
E&I has been developed to provide a set of messaging standards to streamline management of payments-related enquiries.
The original pilots, ABN Amro, ANZ, Bank Austria Creditanstalt AG, Banque Nationale du Canada and JPMorgan Chase) are now joined by eleven additional financial institutions and two corporates that have committed to implement the system by the first quarter of 2007: Banco Popular, The Bank of New York, Barclays, Banca Intesa, Caisse Centrale Desjardins, Caja Madrid, KBC, Mellon Bank, Standard Chartered, The Royal Bank of Scotland, Wachovia as well as Dupont and General Electric.
JPMorgan Chase was the first bank to send a message across the system, using Pegasystems' E&I-certified Smart Investigate software.
Edward Wolfe, vice president and senior product manager of US dollar clearing for JPMorgan Chase, says the pilot programme "demonstrated the substantial efficiencies that can be achieved through automation of the E&I process".
It is estimated that by implementing the E&I protocol, automation levels could be raised to approximately 60%, improving the banking industry's balance sheet by $165 million a year in savings and new revenue.
However, the system will only realise its true promise if the entire banking community comes onboard. The banks and corporates so far signed up for the system represent around 24% of the payments volume transmitted over the Swift network.
JPMorgan's Wolfe acknowledges that implementation requires a large capital investment and commitment. He is calling on the vendor community to develop systems that can ease this burden for the rest of the banking community.
"The modification required to backend systems is expensive, and the vendors should take on the challenge of coming up with more options that are less costly," he says.