P. 1
SWIFT_PresentationVisit Us @ Management.umakant.info

SWIFT_PresentationVisit Us @ Management.umakant.info

|Views: 151|Likes:
Published by welcome2jungle

More info:

Published by: welcome2jungle on Sep 17, 2010
Copyright:Attribution Non-commercial


Read on Scribd mobile: iPhone, iPad and Android.
download as PPT, PDF, TXT or read online from Scribd
See more
See less






What is SWIFT?
• • • The Society for Worldwide Interbank Financial Telecommunication ("SWIFT") operates a worldwide financial messaging network. Messages are securely and reliably exchanged between banks and other financial institutions. SWIFT also markets software and services to financial institutions, much of it for use on the SWIFTNet Network. The majority of international interbank messages use the SWIFT network. As of April 2006 SWIFT linked almost 8000 financial institutions in 205 countries.

Formation of SWIFT
S.W.I.F.T. was formed when seven Major International Banks met in 1974 to discuss the limitations of Telex as a means of secure delivery of payment and confirmation information Its headquarters are situated in La Hulpe, on the outskirts of Brussels

Who uses SWIFT?
Currently the following categories of organisation can access the service: • • • • • • • • • • • Banks Trading Institutions Money Brokers Securities Broker Dealers Investment Management Institutions Clearing Systems and Central Depositories Recognised Exchanges Trust and Fiduciary Service Companies Subsidiary Providers of Custody and Nominees Treasury Counterparties Treasury ETC Service Providers

(1) Standardize Fund Transfer instructions among the participant members; (2) Immediate delivery of payment instructions and related messages; (3) Enhance the security levels of such fund transfers (4) Reduce the cost of transmission of messages. (5) Provide round the clock facilities across the world.

• • • • • • • • • • • • • SWIFT offers services and transactions essential for efficient international banking operations such as:(a) Customer and bank payments. (b) Credit/debit advices. (c) Statements. (d) Foreign exchange and money market confirmation. (e) Collections. (f) Documentary credits ( L/C). (g) Interbank securities trading. (h) Balance reporting. (i) Payment systems. (j) Travelers cheques. (k) Guarantees. (l) Cash Letters.

SWIFT Interface
• A Computer Based Terminal (CBT) (a.k.a. S.W.I.F.T. interface) is then located at each user site. These terminals support the connectivity to the local regional processor and facilitate both manual entry of messages and the bridge to originating applications. • Some of the more well-known CBTs they provide to their members;
– – – – – – – SWIFT Net Link (SNL). SWIFT Alliance Access/Entry (SAA/SAE) SWIFT Alliance Workstation (SAW) SWIFT Alliance Gateway (SAG) SWIFT Alliance Starter Set (SAS) SWIFT Alliance Web station (SAB) SWIFT Alliance Messenger (SAM)

SWIFT : Important Milestones
Year Event


239 banks from 15 countries formed a co-operative to automate the telex. They called it the “Society for Worldwide Interbank Financial Telecommunication”


SWIFT starts using satellites for communication. The number of member banks has grown to 1946 from 58 countries. SWIFT enters the “Securities” domain, by including broker dealers, exchanges, depositories and clearing institutions in its network. The first BIC directory was issued.


1996 2001 2005

SWIFT crosses the important milestone of 3 million messages per day SWIFTNet goes live and the migration from X.25 to IP begins.
SWIFTNet migration (Phase1) successfully completed and now there is more focus on there is more focus on SWIFTNet migration (Phase1) successfully completed and now InterAct, FileAct and Browse

InterAct, FileAct and Browse



 New IP based network (private extranet)  All FIN subscribers migrated to new n/w  Open to banks, FIs, corporates, market infrastructures and market data vendors  XML messaging  Additional protocols (InterAct, FileAct, Browse)

 Old X.25 based network  De-commissioned  Open only to banks and FIs  Only legacy FIN format  Primarily FIN traffic (MT 1xx, 2xx … 9xx)

SWIFT addresses
• • S.W.I.F.T. addresses are used to not only indicate the final destination of the message but to also indicate parties within the individual message. The term "S.W.I.F.T. address" actually only relates to a subset of Bank Identifier Codes (BICs)
11 Char 4!a 2!a 2!c [3!c] Bank Code Country Code Location Code Branch Code Example: CITI GB 2L XXX Can identify upto a branch within an institution Limited use for legacy application to application communication

BIC/BEI/PIC (Bank Identifier Code / Business Entity Identifier / Partner Identification Code)

X.500 Distinguished Names:
Aimed at providing higher granularity and flexibility of names The maximum permissible length of a DN is 100 characters DNs are used for Message routing - SWIFTNet uses the Addressing DNs to deliver the message to the appropriate SWIFTNet Link. Membership control - SWIFTNet verifies that the correspondents are allowed to send messages to each other in the context of SWIFT.

Type of entity

Purpose of PKI
Mr. XYZ bankus33 Expires: 020802

Registration & Certification Authorities that issue digital ‘certificates’
- Certificates provide Trust in the identity of the owner

Signing messages
- establish trusted identity of sender - guarantees integrity of message - sender cannot deny having created the message

Encrypting messages - nobody but the receiver can read the message

Signing and encryption in practice
Sender’s Private signing key Sender’s Public verification key


public storage private storage private storage

Receiver’s Public encryption key Receiver’s Private decryption key

SWIFT Connectivity

SWIFT Connectivity
SWIFT participant 1

PoP SWIFT participant 2

SWIFT Backbone S W I F T
SWIFTNet Switch

SWIFT participant n

IP packet filtering


Orange (E q u a Orange (E q u a n t) n t)



Web server


(C O L T) (C O L T)



VPN Router NAT device Firewall

IP Security Tunnels

(A TT & T ) (A & T )




( BT I n f o n e ( BT I n f o n e t) t)


SWIFT participant 3

SWIFT End-User responsibility


SWIFT and Network Partner responsibility

SWIFTNet components
• SWIFTNet - SWIFTNet is an advanced IP-based messaging platform consisting of a portfolio of products and services that enable secure and reliable communication of mission-critical financial information and transactional data. SWIFTNet Link (SNL) - SWIFTNet Link is the mandatory network interface to SWIFTNet, presenting a dynamically linked application programming interface (API) through which business software solutions may access and use SWIFTNet services. SWIFTAlliance Gateway (SAG) - SWIFTAlliance Gateway is an interface product from SWIFT that receives and concentrates messages from various applications before passing them through SWIFTNet. SWIFTAlliance Webstation (SAB) - SWIFTAlliance WebStation is a SWIFTNet interface product that is used for remote administration of the SWIFTAlliance Gateway, and for administration of SWIFTNet certified operational entities. It also provides end-user access to SWIFTNet business applications. SWIFTAlliance Access (SAA) - SWIFTAlliance Access is widely used FIN SID (a.k.a. CBT) SWIFTAlliance Access is a multi-platform, multi-network interface product. It is designed to connect single or multiple destinations to SWIFT, telex, fax and private networks.

SWIFTNet: Single platform for multiple services

SWIFT Net Services

SWIFTNet services
Securities SWIFTNet FIX SWIFTNet Data Distribution SWIFTNet Funds Treasury and Derivatives SWIFTNet Accord SWIFTNet Affirmations SWIFTNet CLS Third Party Service Cash Management SWIFTNet Bulk Payments SWIFTNet Cash Reporting SWIFTNet Exceptions and Investigations Trade Services SWIFTNet Trade Services Utility

SWIFTNet Services

 Aimed towards the securities industry to offer transactions in FIX messages by using SWIFTNet as the messaging infrastructure  Provides a secure, reliable messaging service to seamlessly exchange FIX messages with counterparties worldwide and thereby  Precludes the heavy investments in the proprietary network infrastructure to be maintained with various counterparts

• Funds
 Helps ensure maximized STP and straight-through reporting rates for investors and their intermediaries (including distributors), fund management companies and their respective Service Providers.

• Cash Reporting
 responds to the need to exchange real-time information on cash held in accounts maintained at various counterparties .

SWIFTNet Services … contd.
• Bulk Payments
 to exchange bulk payment files .

• Exceptions and Investigations
 Aimed at automating payments-related enquiries and to streamline the management process for payment messages requiring manual intervention.

Request / Response exchange
SWIFTNet Central Systems

• Real-time messaging
Request “Pay $5000” client Ack server

• Store-and-forward Pull/Push
Put Message ACK client Acquire client server pull push Message mode mode

Realtime Query/Response
Request “What is my balance?” client Response “5000$” server

SWIFT : Messaging Protocols
Standard store-and-forward messaging for single instructions Supports interactive exchange of files between two parties (Real Time and store-and-forward)



Supports interactive message exchange between two parties (Real Time and store-and-forward) https over SWIFTNet (Online information visualisation)


FIN services are SWIFT's core store-and-forward messaging services . FIN is a secure, reliable and resilient, access-controlled, structured store-andforward messaging service

FIN services enable over 7,500 financial institutions in more than 200 countries to exchange financial data securely, cost effectively and reliably. FIN value added services include: – message validation to ensure SWIFT message formats – delivery monitoring and prioritisation – message storage and retrieval – FIN COPY service (Y/T)

SWIFTNet FileAct
FileAct provides a means for institutions in the financial community to securely and reliably exchange files and information pertaining to those files over SWIFTNet

FileAct supports: Sending files to a SWIFTNet user (FileAct -- Put) Retrieving files from a SWIFTNet user (FileAct -- Get) Delivery notification confirming file receipt by a receiver Abort of transfers in progress File transfer state monitoring Concurrent file transfers Assurance of data authenticity and integrity Closed user group control

SWIFTNet FileAct: Modes and Usage
Store-andforward File Transfer Typically used to reach a large number of correspondents / or in different time zone

Real-time File Transfer

lower-cost alternative to store and forward for online Correspondents (large banks/Market infrastructures) This is an interactive service typically used to retrieve file in conjunction with SWIFTNet Browse

Real-time query and response

SWIFTNet InterAct
SWIFTNet InterAct is SWIFT's xml based interactive messaging service supporting the exchange of messages between two parties aimed at improving STP while using SWIFTNet security features.

InterAct supports:
 Interactive exchange of messages in synchronous or asynchronous mode  Standard XML message envelopes  Support of multiple services  Support of closed user groups  XML syntax validation  Store and forward mode  data integrity and authentication  data confidentiality

SWIFTNet InterAct: Modes and Usage
Real-time messaging Typically used by major counterparties and/or market infrastructures

Store-andforward messaging

Typically used to reach a large number of counterparties

Real-time query and response

Typically used in the context of person-toapplication solutions (with SWIFTNet Browse)

SWIFTNet Browse
SWIFTNet Browse combines the user friendliness of web technology with the security features offered by SWIFTNet. It enables SWIFTAlliance Webstation to access web servers hosted over SWIFTNet • Browse Features: – Intended for User to Application communication – Browsing Security (Authenticated using at least one InterAct message) – Can be used to initiate FileAct , InterAct messages – Closed User Group Control – Enhance existing online portals – Create competitive advantage

SWIFT Net Messages

SWIFT messages
• S.W.I.F.T. messages are identified in a consistent manner. They all start with the literal "MT" which denotes Message Type. This is then followed by a 3 digit number. For example:
MT0nn MT1nn MT2nn MT3nn MT4nn MT5nn MT6nn MT7nn MT8nn MT9nn System Messages Customer Payments Financial Institution Transfers FX, Money Market & Derivatives Collections and cash letters Securities Markets Precious Metals & Syndications Documentary Credits & Guarantees Travellers Cheques Cash Management & Customer Status

SWIFT message types
• SWIFT messages consist of five blocks of data including three headers, message content, and a trailer. • Each message is assigned unique identifiers. A 4-digit session number is assigned each time the user logs in. Each message is then assigned a 6-digit sequence number. These are then combined to form:
– ISN (Input Sequence Number) or – OSN (Output Sequence Number)

• The Logical Terminal Address (12 character BIC), Day, Session and Sequence numbers combine to form:
– MIR (Message Input Reference) or – MOR (Message Output Reference)

SWIFT field structure
• A field is a logical subdivision of a message block • A field is always prefaced by a field tag that consists of two digits followed by an alphabetic character (optional). • The alphabetic character is referred to as an option.
– For example, 16R is a tag (16) with an option (R) that indicates the start of a block;

• A field is always terminated by a field delimiter.

Generic and Non-generic Fields
• There are two types of fields used in SWIFT messages: generic and non-generic. • The type of field used in a SWIFT message block is determined by the Message Type.
– The structure of non-generic fields in SWIFT message blocks is as follows:

:2!n[1a]: data content<CRLF>
– The structure of generic fields in SWIFT messages is as follows:

:2!n1a::4!c’/’[8c]’/’data content

SWIFT message block structure - Web Sphere
• The connector supports SWIFT Financial Application (FIN) messages. They have the following structure:
– – – – – {1: Basic Header Block} {2: Application Header Block} {3: User Header Block} {4: Text Block or body} {5: Trailer Block}

• These five SWIFT message blocks include header information, the body of the message, and a trailer. • All blocks have the same basic format: {n:...}

{1: Basic Header Block}
• The basic header block is fixed-length and continuous with no field delimiters. It has the following format:

{1: (a)

F 01 BANKBEBB 2222 123456} (b) (c) (d) (e) (f)

{2: Application Header Block}
• There are two types of application headers:
– Input and Output.

• Both are fixed-length and continuous with no field delimiters. • The input (to SWIFT) structure is as follows: {2: I 100 BANKDEFFXXXX U 3 003} (a) (b) (c) (d) (e) (f) (g)

{3: User Header Block}
• This is an optional block and has the following structure: {3: (a) {113:xxxx} (b) {108:abcdefgh12345678} } ( c)

{4: Text Block or body}
• This block is where the actual message content is specified and is what most users see. • The format, which is variable length and requires use of CRLF as a field delimiter, is as follows:

The symbol CRLF is a mandatory delimiter in block 4.

{5: Trailer Block}
• A message always ends in a trailer with the following format: • {5: {MAC:12345678}{CHK:123456789ABC} • MAC Message Authentication Code • CHK Checksum calculated for all message types. • PDE Possible Duplicate Emission • DLM Added by SWIFT if an urgent message (U) has not been delivered within 15 minutes, or a normal message (N) within 100 minutes.

Business Objects for SWIFT

Overview of business objects for SWIFT

Business objects
• • • • • Each of these business objects consist of the following: Name Version Attributes Verbs
– Each business object supports the following standard verbs:

– Create – Retrieve

• To convert a business object to a SWIFT message, the SWIFT data handler loops through the attributes in the top-level business object in sequential order. • It generates populated blocks of a SWIFT message recursively based on the order in which attributes appear in the business object and its children. • Attributes without a block number, or with values unrecognized by the parser properties, are ignored. • Also ignored is block 0, the UUID header that is added by the MQSA.

Converting business objects to SWIFT messages

Converting SWIFT messages to business objects
The SWIFT data handler extracts data from a SWIFT message and sets corresponding attributes in a business object as follows: 1. The SWIFT parser is called to extract the first 4 blocks (UUID + blocks 1 through 3). For block 2, the SWIFT application header, only the input attributes are extracted. 2. The SWIFT data handler is called to extract the name of the business object from block 2 of the SWIFT message. 3. The SWIFT data handler creates an instance of the top-level object.

• • • • • Standardized procedure for transfer of funds Higher speed in transmission of messages Reduced cost in transmission of messages High level of security in transfer of funds Retrival of old messages

• SWIFTNet Investment so far…
• Challenges for Banks / F.Is
solutions to satisfy market mandate

– Finished migrating FIN traffic to SWIFTNet – Few banks have implemented few tactical FileAct/InterAct – To Increase ROI from SWIFTNet investment – Centralisation and standardization for FileAct/InterAct traffic – Mandatory SWIFTNet Phase II : RMA implementation – Getting ready for increased SWIFTNet traffic – Message standardisation (XML/ISO20022) – Implementation of SWIFT’s business solutions – Enhance portfolio of services/offerings over SWIFTNet

Threats to the SWIFT Network
• The threats most likely to affect the SWIFT Network are money laundering and other forms of electronics fraud.

Thank You

You're Reading a Free Preview

/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->