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CB.Net Forges Alliance with LogicScope for SSI Accuracy

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CB.Net, a London-based provider of bank payments descriptive data, has teamed up with U.K. messaging software provider LogicScope to create an up-to-the-minute database of standard settlement instructions (SSIs). The venture will build on CB.Net’s comprehensive BankSearchPlus payments directory, which was launched at Swift’s Sibos conference in Singapore last month.

CB.Net and Logicscope have created a joint venture, SSI Financial, whose aim will to be provide financial institutions with the SSI data they need to ensure that transactions are settled smoothly. CB.Net has been working on cleansing Swift’s BIC Database Plus – containing bank identifier codes – for the past year or so, and has 70,000 SSIs for 8,300 BICs that are updated daily. Logicscope’s expertise in transaction messaging will allow SSI Financial to offer institutions systems that reduce the risk of STP breakdown due to inaccurate or missing settlement data.

A study by CB.Net indicates that SSI data – in the form of Swift BICs, non-Swift BICs and sort codes – changes on average by almost 15% per quarter. This translates into approximately 700 changes per day.

The study looked at data from Swift’s BIC Database Plus starting in late 1999, Swift’s MT094 traffic from January 2000, and CB.Net’s own SSI directory, AccountSearch. According to CB.Net, the study indicates that over the past four years, a total of more than half a million changes to Swift’s BIC Database Plus took place.

CB.Net believes the combination of accurate and current BIC and SSI data can make a contribution to improving STP rates. As a measure of the monetary impact of successful STP on the business, it cites Swift’s own estimates that STP is effected for around only 36% of all cross-border commercial payments. Swift reckons this translates into an annual cost of repairs of around $12 billion.

In its study, CB.Net found that most MT094 messages (about 40% of which describe changes to bank SSIs) are generated by larger banks. Smaller banks “often decide to forego the exp-ense of sending an MT094, with the result that publication of such changes is haphazard,” according to CB.Net.

The study showed that while some banks rarely change their SSIs, others do on a regular basis, and notice of changes is often as short as less than a week. Furthermore, what is considered to be a change in SSIs differs between banks, and staff involved in changes to SSIs have little to no operational contact with those involved in changes to BICs.

As a result of these issues, settlements can require manual intervention or may even fail, because “the paying bank is unaware of the recipient bank’s SSI or because the paying bank has not updated the relevant BIC for the receiving bank,” according to CB.Net.

It was to address these problems that CB.Net embarked on its plans to develop its various payments databases, and initiated a collaboration with Swift to develop the definitive international payments directory.

CB.Net was retained to handle cleansing of Swift’s BIC Plus Database, which is delivered quarterly to members, after the Belgian settlements network identified the need to upgrade the service. Swift awarded the technical infrastructure aspect of the upgrade to Atos and is considering how the improved service is to be exploited commercially.

As part of the effort, CB.Net took Swift members’ MT094 broadcasts and categorized them in a searchable database to create its Broadcast Alert/BroadcastSearch service. This has essentially automated what previously was a highly manual effort, requiring cutting and pasting of messages, and photocopying and filing of records. CB.Net now offers Broadcast Alert/BroadcastSearch alongside its AccountSearch service, BICHistory, an archive of BICs, and BankSearchPlus, an interface to the BIC Plus Database.

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