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What is SWIFT?

SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a global messaging network that enables financial institutions to securely exchange standardized financial messages, such as payment instructions, securities transactions, and account statements. It was founded in 1973 as a cooperative society under Belgian law, with the primary aim of replacing the telex-based communication systems that were previously used for international financial transactions. Today, SWIFT connects over 11,000 financial institutions across more than 200 countries, making it a key component of the global financial infrastructure. 

SWIFT provides a secure and standardized messaging system for financial institutions to communicate and exchange information, but it does not hold funds or manages accounts


SWIFT is owned by its member institutions, which are primarily banks and other financial institutions. It operates as a member-owned cooperative, with each member holding a stake in the organization based on their usage of SWIFT services. The governance of SWIFT is overseen by a Board of Directors, which is elected by its shareholders and comprises representatives from various member institutions.

How SWIFT operates

SWIFT provides a secure, standardized, and reliable messaging platform for financial institutions to exchange information. It uses a system of unique codes, known as Bank Identifier Codes (BICs) or SWIFT codes, to identify the sending and receiving institutions involved in a transaction. The messages sent via SWIFT are formatted according to specific message types and follow the ISO 20022 messaging standard, which ensures that the information exchanged is consistent, accurate, and easily interpretable by all parties involved.

Nature of SWIFT messages

It is important to note that SWIFT itself does not transfer money or hold accounts on behalf of its member institutions. Instead, SWIFT serves as a messaging system that facilitates the exchange of financial information, such as payment instructions, between banks and financial institutions. When a bank sends a payment instruction via SWIFT, it is essentially requesting the receiving bank to transfer a specified amount from its account to the beneficiary's account. The actual transfer of funds takes place through correspondent banking relationships and settlement systems, such as RTGS systems or Automated Clearing Houses (ACHs), which handle the movement of money between accounts.

Connection to SWIFT

Financial institutions connect to the SWIFT network through various channels, such as SWIFT Alliance Access, SWIFT Alliance Lite2, or SWIFTNet Link, depending on their size, technical capabilities, and messaging requirements. The messages are transmitted securely using SWIFT's proprietary communication protocol and encrypted using state-of-the-art security measures.

In summary, normal SWIFT transfers and communication rely on standardized MT messages and are gradually transitioning to the richer MX messages (ISO 20022) to facilitate cross-border transactions. 

SWIFT Transfers and Communication with MT and MX messages

SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a secure messaging network that enables financial institutions, such as banks, to send and receive standardized messages about financial transactions, like payment instructions and confirmations. SWIFT does not hold accounts or transfer funds; it simply provides a secure and reliable platform for exchanging information.

Normal SWIFT transfers use a series of standardized message types known as MT (Message Type) messages. These messages have predefined formats and fields, ensuring that financial institutions can easily understand and process the information they contain.

MX (ISO 20022) messages are a newer standard of financial messaging based on XML (eXtensible Markup Language). They provide a richer and more structured format, allowing for enhanced data exchange and improved straight-through processing. MX messages are gradually replacing MT messages in the SWIFT network, with the aim of providing better interoperability and data handling capabilities.

While traditional SWIFT transfers have been the backbone of international payments for decades, they have some limitations, including limited transparency, slower processing times, and unstructured data, as I explained in the previous response.

Swift Currency Transfer Structure

Through Correspondent Banks

Through Correspondent Banks

Through Netting or RTGS using a PAG (Payment Gateway)

SWIFT MT Standards 2023

Category 1 - Customer Payments and Cheques
Message Reference Guide MT 101-199

Category 2 - Financial Institution Transfers
Message Reference Guide MT 200-299

Category 3 - Treasury Markets - Foreign Exchange, Money Markets and Derivatives
Message Reference Guide MT 300-349

Message Reference Guide MT 350-399
Message Usage Guide

Category 4 - Collections and Cash Letters
Message Reference Guide MT 400-499

Category 5 - Securities Markets
Message Reference Guide MT 500-518
Message Reference Guide MT 519-543
Message Reference Guide MT 544-567
Message Reference Guide MT 568-599
Message Usage Guide

Category 6 - Reference Data - Treasury Markets - Commodities
Message Reference Guide MT 600-699
Message Reference Guide MT 670-699

Category 7 - Documentary Credits and Guarantees/Standby Letters of Credit
Message Reference Guide MT 700-799

Category 8 - Travellers Cheques
Message Reference Guide MT 800-899

Category 9 - Cash Management and Customer Status
Message Reference Guide MT 900-999

Category n - Common Group Messages
Message Reference Guide MT n90-n99

System Messages
Error Codes

SWIFT MX Standards

Bank Account Management 

Bank Services Billing 

Bank-to-Customer Cash Management 

Cash Management 

Collateral Management 

  • Message Definition Reports and Schemas (4.3.2022) Part 1 & Part 2.

Corporate Actions 

Cross-Border Payment Reporting plus (CBPR+) 

Exceptions and Investigations 


  • Message Definition Reports and Schemas (11. 2022) Part 1, Part 2

General Meeting 

  • Message Definition Reports and Schemas (11. 2023) Part 1, Part 2

Notification to Receive 

Payments Clearing and Settlement 

Payments Initiation 

Payments Mandates 

Post Trade Matching 

Securities Clearing 

Settlement and Reconciliation 

Shareholders Identification Disclosure 

  • Message Definition Reports and Schemas (02.2023) Part 1, Part 2


Total Portfolio Valuation Report 

Trade Services Management 

Triparty Collateral Management

SWIFT STP Procedure

SWIFT (Society for Worldwide Interbank Financial Telecommunication) provides a network that enables financial institutions worldwide to send and receive information about financial transactions in a secure, standardized, and reliable environment. SWIFT does not actually transfer funds, but instead sends payment orders, which must be settled by correspondent accounts that institutions have with each other.

To clarify the role of Straight Through Processing (STP) in the context of SWIFT MT 103 and MT 202 COV messages, let's focus on how STP enhances the efficiency and accuracy of these transactions.

Straight Through Processing (STP) in SWIFT Transactions

STP refers to the automated processing of payments without the need for manual intervention. This process is crucial in the financial industry for ensuring fast, accurate, and cost-effective transactions.

STP in the Context of MT 103 and MT 202 COV:

  1. Automated Processing of MT 103 or MT 103+:
    • When a bank sends an MT 103 message for a customer transaction, the STP system automatically processes this message.
    • The system checks for completeness and accuracy of information, ensuring adherence to the required formats.
    • If the message meets all criteria, it's forwarded automatically to the beneficiary's bank via the SWIFT network.
  2. STP in MT 202 COV for Interbank Settlement:
    • Alongside MT 103, an MT 202 COV message is often generated for interbank fund transfer.
    • STP systems automatically link MT 103 and MT 202 COV messages, ensuring that the cover payment corresponds to the actual customer transaction.
    • The system checks the MT 202 COV for regulatory compliance, especially regarding the transparency of the originator and beneficiary details (as required in COV messages).
  3. Reduced Errors and Delays:
    • By automating the processing, STP minimizes the risk of human errors and delays.
    • It ensures that the transactions comply with international standards and regulations.
  4. Efficient Handling of Exceptions:
    • In cases where transactions do not meet STP criteria (due to format errors, missing information, etc.), they are flagged for manual review.
    • This exception handling is a crucial part of STP, ensuring that non-compliant or suspicious transactions are scrutinized.
  5. Rapid Settlement:
    • STP enables quicker settlement of transactions as the automated process reduces the time taken for verification and transmission.
    • This is especially critical in international transactions where speed is a key factor.


  • STP in MT 103: Automates the processing of customer payment instructions, ensuring fast and accurate transaction handling.
  • STP in MT 202 COV: Facilitates automated linkage and processing of interbank settlements related to customer transactions, with a focus on compliance and efficiency.
  • Overall Impact of STP: Enhances the efficiency, accuracy, and compliance of financial transactions, reducing manual intervention and associated risks.

Swift 103+ STP (Straight Through Processing)

Swift 103+ STP is a format optimized for Straight Through Processing (STP). STP enables the entire payment process, from initiation to final settlement, to be conducted electronically without the need for manual intervention.

Additional Features:

  1. Standardized Format: It requires strict adherence to a standardized format, reducing errors and delays.
  2. Automated Processing: Transactions are processed automatically, ensuring faster and more efficient processing.
  3. Reduced Manual Intervention: The need for manual entry and verification is minimized, reducing the risk of errors and delays.
  4. Faster Settlement: Transactions are settled more quickly compared to traditional methods.

Considerations for STP:

  1. Accurate Data Entry: Data must be accurately input to avoid delays or rejections.
  2. Compliance with Format Requirements: Banks must ensure that the format requirements of 103+ STP are strictly followed.
  3. Software and Systems: Banks need to have appropriate software and systems in place to handle STP effectively

SWIFT gpi transfers. 

SWIFT gpi (Global Payments Innovation):

Launched in 2017, SWIFT gpi is an initiative designed to address the limitations of traditional SWIFT transfers by enhancing the speed, transparency, and traceability of cross-border payments. SWIFT gpi leverages the existing MT and MX message formats to improve payment services. Key features of SWIFT gpi include:

  • Faster payments: gpi streamlines processes and establishes tighter service-level agreements (SLAs) between banks, resulting in faster transaction times, often within minutes or seconds.
  • Payment tracking: The gpi Tracker enables real-time tracking of transactions, improving transparency and reducing manual investigations.
  • Fee transparency: Banks can provide customers with information about transaction fees upfront, allowing for better decision-making.
  • Richer data: gpi supports more detailed and structured information exchange, facilitating improved reconciliation and regulatory compliance.

SWIFT gpi addresses the limitations of traditional SWIFT transfers by enhancing cross-border payments with end-to-end tracking, faster processing, and richer data. 

Unraveling the Semi-Automatic and Automatic Parts of the Swift gpi Processes

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) revolutionized international transactions with the introduction of its Global Payments Innovation (gpi). The primary goal of SWIFT gpi is to modernize and automate cross-border payments, ensuring speed, traceability, and transparency.

The Automatic Process: GPI Bank to GPI Bank

When both the sending and receiving banks are gpi members, the process can be fully automated. This makes the transaction faster, more efficient, and eliminates potential errors that may occur during manual processing. It enables real-time tracking of payments from start to end, providing a level of transparency previously unseen in cross-border transactions.

The Semi-Automatic Part of the Process: 
Non-gpi Bank to gpi Bank or gpi Bank to non-gpi Bank

The semi-automatic gpi process comes into play when a transaction is initiated by a non-gpi bank to a gpi member bank. This transaction starts manually and becomes automated once it reaches the gpi member bank. If the non-gpi bank does not populate SWIFT fields 121 and 111, it becomes the responsibility of the first gpi member bank in the transaction chain to complete these fields accordingly thus ensuring the transaction meets the gpi standards for tracking and service level identification. 

  1. Field 121 (Unique End-to-End Transaction Reference - UETR): This field is used to identify a payment transaction throughout its entire life cycle. It's a mandatory field for all gpi transactions, and each transaction must have a unique UETR.
  2. Field 111 (Service Type Identifier): This field is used to indicate the type of service, or level of urgency, required for a transaction. For example, a value of 001 indicates a normal payment, whereas 002 specifies a high priority payment.

At the initiation stage, a manual input of transaction details is required, including the beneficiary's information, amount, currency, and purpose of the transfer. This initial process is necessary as the non-gpi bank might not have systems in place to automate this part of the transaction.

The semi-automatic process then allows for a human to manually review the transactions to ensure compliance with regulations, such as Anti-Money Laundering (AML) and Know Your Customer (KYC) rules. Large or non-standard transactions may also require manual authorization or approval, ensuring they meet specific risk management or policy criteria.

Human Intervention can stop the Automatic Processes

Despite the predominant automation, certain circumstances could require human intervention, even in fully automatic gpi transactions.

  1. Fraud Detection: If a system flags potential fraudulent activity, a transaction might be halted for human review. This could be due to patterns that match known fraud methods, unusually large transfers, or transactions involving regions or parties with a high risk of fraud.
  2. Recall Requests: If a recall request is made for a transaction (e.g., due to an error or a detected fraud), a human may need to intervene to process the recall, particularly if the recall request is complex or requires coordination between multiple parties.
  3. Regulatory and Compliance Concerns: Automatic transactions might be paused for human review if they involve countries or entities subject to sanctions, or if there are other compliance concerns. This review can help ensure the transaction complies with all applicable regulations.
  4. Technical Issues: In the event of a system outage, bug, or other technical problems, human intervention might be required to fix the issue and ensure the transaction is processed correctly.

While SWIFT gpi's key promise lies in automation and efficiency, the reality of global financial transactions means there is still a role for human oversight. This blend of semi-automatic and automatic processes, paired with the necessary human intervention, allows the SWIFT gpi system to cater to a broad range of needs, while maintaining the highest standards of speed, security, and compliance.

For a general overview about SWIFT GPI please click here and for the Swift GPI Certified Application Manual please click here and for the Swift gpi Guidelines click here.
To check your UETR through Standard Chartered and Deutsche Bank please click here or  here.

SwiftNet Instant

SwiftNet Instant. It is a real-time, low latency messaging platform that is available 24/7 and supports the secure exchange of instant payment flows between Clearing and Settlement Mechanisms (CSMs) and their participants.

Customers can connect to SwiftNet Instant through their existing Swift connectivity and security infrastructure, including VPN boxes, leased lines and hardware security modules. Integration with the bank’s IT environment is achieved through the Alliance Gateway Instant (AGI).

All parties along the instant payment chain can use AGI and SwiftNet Instant messaging. Applications include payment initiation from an overlay service, indirect member communications with a sponsoring member, or a corporate receiving a payment confirmation.

SWIFT Instant connects with domestic instant payment systems to enable real-time transaction processing, both domestically and internationally, using the ISO 20022 standard. These systems represent ongoing efforts to modernize and streamline payment processes in the financial industry.

SWIFT Direct Debit

SWIFT Direct Debit

Direct debit in the SWIFT system is a payment method that allows businesses and individuals to collect funds from debtor bank accounts in multiple currencies and across different countries. Unlike SEPA Direct Debit, which is specifically designed for the SEPA zone and is limited to euro-denominated transactions, direct debit in SWIFT has a global scope and supports a wide range of currencies.

The process of initiating a direct debit transaction within the SWIFT system typically involves the following steps:

  1. Agreement between creditor and debtor: The creditor and debtor must have a pre-existing agreement, which includes the terms and conditions for direct debit transactions. This agreement may also involve setting up a mandate or authorization, allowing the creditor to collect payments from the debtor's bank account.
  2. Message exchange: The creditor initiates the direct debit transaction by sending a SWIFT message (MT101 or MT204) to the debtor's bank. This message contains the details of the transaction, such as the amount, currency, debtor's account information, and any other necessary information.
  3. Verification and authorization: The debtor's bank verifies the transaction details, checks the availability of funds in the debtor's account, and confirms the authorization for the transaction. If everything is in order, the debtor's bank proceeds to debit the funds from the debtor's account.
  4. Funds transfer: The debtor's bank orders the transfer of the funds through its correspondent bank to the creditor's bank, usually via an MT202 message and informs the bank of the beneficiary with a MT103 message in the SWIFT system.
  5. Confirmation: Upon receiving the funds, the creditor's bank sends a confirmation message to the creditor, notifying them of the successful direct debit transaction.

The prerequisites for initiating a direct debit transaction within the SWIFT system are as follows:

  1. Bank accounts: Both the creditor and debtor must hold bank accounts with financial institutions that are part of the SWIFT network.
  2. Agreement and authorization: A pre-existing agreement and authorization (mandate) between the creditor and debtor must be in place to enable direct debit transactions.
  3. SWIFT message formats: The creditor must be familiar with the appropriate SWIFT message formats (e.g., MT204, MT202, MT103, MT101) used for initiating and completing direct debit transactions.
  4. Bank fees: The creditor and debtor should be aware of any fees associated with direct debit transactions within the SWIFT system, as these fees may vary depending on the banks and countries involved.

MT 101 Scope

This message is:

  • sent by a financial institution on behalf of a non-financial institution account owner, to an account servicing financial institution or to a forwarding financial institution for further transmission to the account servicing institution.
  • sent by a non-financial institution account owner, or a party authorised by the account owner, to an account servicing financial institution or to a forwarding financial institution for further transmission to the account servicing institution.

It is used to move funds from the ordering customer's account(s) serviced at the receiving financial institution or at the account servicing institution, or from an account(s) owned by the ordering customer which the instructing customer has explicit authority to debit, for example, a subsidiary account.

The MT 101 can be used to order the movement of funds:

  • between ordering customer accounts, or
  • in favour of a third party, either domestically or internationally.

MT 101 Format Specifications

The MT 101 consists of two sequences:

  • Sequence A General Information is a single occurrence mandatory sequence and contains information to be applied to all individual transactions detailed in sequence B.
  • Sequence B Transaction Details is a repetitive sequence; each occurrence provides details of one individual transaction. Fields which appear in both sequences are mutually exclusive.

SWIFT MT204 message:

  1. Purpose: The MT204 message is specifically designed for General Financial Institution Transfer Instructions. It is used to instruct a financial institution to transfer funds between accounts, especially when dealing with treasury or money market operations.
  2. Structure: Like all SWIFT messages, the MT204 follows a structured format that includes a series of fields. Each field has a specific purpose, such as specifying the amount, currency, sender, receiver, and other transaction details. This structured format ensures consistency and clarity in financial communications.
  3. Participants: Typically, this message is exchanged between financial institutions, such as banks, rather than individual customers. It's an integral part of interbank communication for the execution of financial transactions.
  4. Security and Reliability: SWIFT messages, including the MT204, are known for their high levels of security and reliability. The SWIFT network provides a secure and standardized platform for financial institutions to communicate, which is crucial for maintaining the integrity and confidentiality of financial transactions.
  5. Use in Treasury and Money Markets: In the context of treasury and money market operations, the MT204 is used for transactions like fund transfers, settlement of trades, and other related financial activities. It facilitates the efficient and accurate processing of these transactions.
  6. Compliance and Standardization: The MT204, like other SWIFT messages, adheres to strict international standards, ensuring that it is compliant with global financial regulations and practices. This standardization is key to the smooth functioning of international financial markets.

If you want to know more about how to transfer funds through the corresponding banking system, please get in contact with our Head of Corresponding Banking M. Amri Elarisse