Back in December 2014 when SWIFT announced the retirement of SWIFT Accord for October 2017, most of their customers, having first digested the information, envisaged a long lead time to select and implement a replacement solution.
But years and months have passed quickly and by the end of this summer, there will remain only one year before SWIFT Accord is decommissioned. We are all aware that in the banking industry, one year is a short timeframe in which to implement a new solution.
Yet for treasury departments, confirmation matching is a critical process in the Straight-through Processing chain, since generally counterparties only settle their deals once they have matched the trade confirmations of both sides. Therefore Accord retirement provides treasury departments with a unique opportunity to re-assess their matching processes in order to identify improvements and efficiencies. One area to investigate is the integration of non-SWIFT data, as not all counterparties use SWIFT.
The Accord service is a central confirmation matching application for foreign exchange, money market, over-the-counter derivative (OTC), and commodities confirmations. For hundreds of institutions using Accord today it is the time now to launch a migration project, this means nominate a project manager, gather business requirements, select an alternative solution and start the migration. SWIFT Accord team has published a lot of guidelines and tools to facilitate the migration. The Accord migration guide is giving a lot of useful information regarding the data that Accord stores and that should be migrated to a replacement matching solution. It also gives some recommendation on the Accord migration strategy.
In summary three types of data can be exported from the Accord service:
1) Live data with the confirmations that are still pending (Unmatched, mismatch,…)
2) User-Defined matching rules (MRI). MRI’s are very important for straight-through processing rates.
3) Long Term Archival Data (LTA). In early 2017 SWIFT will provide details of the LTA data export service.
Another important subject to review is the API’s migration. The Accord API’s allow treasury applications to get the matching status of any trade. The API cannot be migrated easily to the new matching system. This will impact the treasury application with some integration work to be done in order to interface to get the matching status from the new service provider.
Regarding the migration strategy the good thing is that it will be possible after the migration of data to run the two systems in parallel. And decommission Accord only when the new alternative solution is working properly with similar matching results.
The Accord migration is an opportunity to improve your existing process. In any case the integration with back-end applications (Treasury, payments,…) has to be redesigned. The exception process can also be reviewed as the user interface will also necessary change with the new system. Additionally it is possible to extend the scope of matching instruments that was not covered today by Accord.
Today’s market offers two key types of matching solutions: central matching utilities and software vendor solutions. While the central matching utilities are efficient and easy to implement, they are often restricted to a given number of instruments and functionalities. Software vendors, on the other hand, can provide more flexible solutions – adding value and extending the scope of instruments to be matched. More often than not, software vendors deliver their solutions in a Software-as-a-Service (SaaS) mode, offering their client the full value of their solutions, without any of the operational overhead.
Our GTMatch product is one of the solutions recognised by SWIFT for Accord replacement. My recommendation is not to wait until the last minute to replace Accord. SWIFT has published all the migration tools and will not extend the deadline as they do not plan on applying the SWIFT Release 2017 to the Accord system. So time is of the essence – start your replacement project now and select the best solution to meet your requirements.
By Etienne Savatier, International Sales Director Financial Messaging, Bottomline Technologies.