The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

SWIFT Launches SSI Initiatives to Reduce Settlement Errors and Increase Automation

SWIFT, the financial messaging provider for more than 9,500 financial institutions and corporations in 209 countries, today announced the roll-out of a range of new initiatives designed to reduce costly settlement errors and improve the rates of automation of Standing Settlement Instructions (SSIs).

SWIFT’s initiatives are a response to the industry need for greater efficiency in SSI processing. SSIs are agreements between two financial institutions that fix the receiving agents of each counterparty. They make for speedy payment and settlement, but SSIs are frequently changed, which results in settlement errors and payment rejections. Research jointly conducted by SWIFT and 12 of its customer banks suggests there are currently about 40 million such payment errors every year, costing the financial industry an estimated USD700 million.

SWIFT has therefore launched a global SSI repository, designed to be the most accurate such resource available to the financial industry. The multiple sources and sophisticated selection strategies used will ensure that an institution’s SSIs are complete, accurate and able to be replicated with ease. An SSI directory for retail payments based on the repository will be updated and published on a monthly basis. At a later stage, SWIFT will also launch an SSI directory for treasury in the FX and money markets sectors.

The second initiative is the creation of a standard messaging format for distribution of cash SSI updates, available from November this year. The message format will be structured, validated and authenticated, and allow senders to either specify a list of recipients for the notification, or to inform the broader SWIFT community.

Third, SWIFT now offers a diagnostics service that informs customers when counterparty SSIs held in their payment applications are incorrect and details corrective measures. The service, which was unveiled at Sibos in October 2010, validates a customer’s current list of counterparty SSIs against multiple information sources to provide a reliable picture of their accuracy.

Commenting on the raft of SSI initiatives, Patrik Neutjens, Head of Reference Data at SWIFT, said: “The lack of a single source for SSI information has led to payment failures, costing banks considerable time and money. In the age of automation and real-time reporting, it is crucial that this situation improves.”

“These three initiatives will provide a comprehensive solution to some of the problems with changing SSIs. SWIFT’s efforts will drastically improve the situation, culminating in a standard message format to allow banks and other financial institutions to efficiently update each other on changes to their SSI arrangements. This message format will ensure that only relevant parties are informed of the changes and prevent financial institutions being overwhelmed with irrelevant updates.”

Related content

WEBINAR

Recorded Webinar: Data Science & Analytics – New approaches and capabilities for driving business analytics

Financial institutions are under pressure to maximise the insight they can derive from their data. With data spread across multiple silos and stored in both structured and unstructured formats, embedding analytics into business processes can be difficult and calls for new approaches to data management. Open source database and data processing technologies, as well as...

BLOG

Sponsored Blog: The Complexities of Shareholding Disclosure

Complex shareholder disclosure regulations, especially where assets are held across jurisdictions, can quickly translate into a significant headache for asset managers and institutional investors alike. Secure access to the right data and analytics can mean the difference between compliance and a breach of regulations. About shareholding disclosure Shareholding disclosure regulations have been designed to protect...

EVENT

RegTech Summit APAC

Now in its 2nd year, the RegTech Summit APAC will bring together the regtech ecosystem to explore how capital markets in the APAC region can leverage technology to drive innovation, cut costs and support regulatory change. With more opportunities than ever before for RegTech to add value, now is the time to invest for the future. Join us to hear from leading RegTech practitioners and innovators who will share insights into how they are tackling the challenges of adopting and implementing regtech and how to advance your RegTech strategy.

GUIDE

Entity Data Management Handbook – Fourth Edition

Welcome to the fourth edition of A-Team Group’s Entity Data Management Handbook sponsored by entity data specialist Bureau van Dijk, a Moody’s Analytics company. As entity data takes a central role in business strategies dedicated to making the customer experience markedly better, this handbook delves into the detail of everything you need to do to...