Swift, the provider of global financial messaging services, announced today that Bank Indonesia will use Swift as the primary messaging platform for the Indonesian banking community to access its second generation Real Time Gross Settlement (BI-RTGS) and Scripless Securities Settlement System (BI-SSSS).
The move mirrors those of leading RTGS systems around the world, including PDS in Australia, CHAPS in the UK, CHATS in Hong Kong, CLS, and TARGET2 in Europe, which also have implemented SWIFT as their platform of choice. Indonesia is the 9th country in the Asia Pacific region to choose SWIFT.
SWIFT connects more than 60 high-value payment systems worldwide covering more than 90 countries, including five pan-regional initiatives (TARGET2, BCEAO, BEAC, COMESA and ECCB).
Ronald Waas, Director of Accounting and Payment & Settlement System Directorate, Bank Indonesia, explains, "Most of BI-RTGS/BI-SSSS participating banks have been using SWIFT for their cross-border transactions to their correspondent banks for many years. By providing them with SWIFT as the platform to access 2nd Generation BI-RTGS and BI-SSSS, we allow them to use a single window and the same standards for both domestic and cross-border transactions. This will enable straight-through processing, which in turn will reduce operational errors and increase processing efficiency."
"The adoption of SWIFT, the global provider of financial messaging services, for the infrastructure of Indonesia's high-value payments and securities settlement will lead to major improvements in interoperability of Indonesia's financial infrastructure, will provide Indonesia financial system with a future-proof infrastructure, and will help Indonesia integrate with financial markets in the region such as the one in ASEAN," Waas adds.
The implementation of SWIFT will include the use of SWIFT FIN Y-Copy, Browse, FileAct and InterAct services for BI-RTGS and BI-SSSS transactions.
Ian Johnston, Chief Executive, Asia Pacific, SWIFT, says, "Indonesia's current strong economic growth will benefit not only Indonesia, but ASEAN and beyond. The move to the SWIFT messaging platform will provide a stable foundation for Indonesia's financial services industry and its future growth."
Implementation will start in Q1 2011, pilot bank testing in Q3 2011 and industry-wide testing in Q1 2012. 2nd Generation BI-RTGS and BI-SSSS are expected to go live in Q3 2012.
Bank Indonesia will announce the vendor consortium that will develop the new middle-tier system to link with SWIFT by year-end.