On November 21st, the new MT202COV cover payment will be introduced. It will contain full originator and beneficiary party information from the MT103 payment message. The major concern when filtering international payments remains that the information duplicated from the MT103 message into the MT202COV cover payment message will cause a dramatic increase of cover payments alerts and possibly duplication of alerts for banks generating payments and covers for some transactions.
To remedy this, Sword FircoSoft has developed a pairing feature in their best-of-class watchlist filtering solution, Firco Filtering Suite. Since 2006, Sword FircoSoft customers have been pairing messages related to the same transaction, therefore eliminating the risk of increasing the hit rate. This pairing mechanism, developed in partnership with a major international bank, enables the application of sanctions list check, and potential alert decision, directly on the group of messages composing a transaction. Compliance breach is therefore avoided as no part of a transaction can be processed while another part is held for alert review or blocked.
When filtering the MT103 payment message and its related MT202COV cover payment, Sword FircoSoft applies the same filtering criteria to both simultaneously. Hence, in case of alert, both alerted messages are reviewed at the same time, the decision made on MT103 being automatically applied to the MT202COV. This eradicates the risk of decision discrepancies between the two messages and additionally speeds up the review process.