November IBAN Deadline For Cross Border Payment Messages Will Highlight Bank

Odd Tuftin, R&D Director at CBA, Europe's leading developer of Java-based
software for bank international payment End-to-End Straight Through
Processing, has claimed that November's mandatory adoption of the SWIFT
MT103+ standard will cause severe problems with cross border payment
processing for many banks, unless the quality of their payment messages is

"As from November 2002," argues Tuftin, "the presence of a correctly
formatted and calculated International Bank Account Number (IBAN) in
accordance with SWIFT MT103+ will be essential to avoid rejection of payment
processing messages. All such messages between banks in Europe will be
validated on the SWIFT FIN network, and incorrect messages will be rejected.
This extra validation is expected to significantly improve STP messaging
capabilities. But, to ensure that their MT103+ payment messages are not
rejected by the SWIFT FIN network after the November deadline, the sending
bank must be able to validate the IBAN before the payment message is

Tuftin continues, "the current quality of MT103+ messages exchanged between
banks strongly suggests that a large percentage will be rejected unless
standards improve dramatically as the November deadline looms. The
introduction of IBAN was aimed at improving the quality of mandatory account
number information, facilitating STP right up to the credit on the account
of the final recipient. However, the use of IBAN has not been mandatory up
to now, and November's deadline for its adoption as part of MT103+ will see
many banks struggle to get to grips with the account number information
required by the standard."

"In the face of greater competition and diminishing revenues from
cross-border payments, banks need to concentrate on reducing processing
costs. The SWIFT Message Type 103+ is specifically intended to improve
end-to-end automation, provide high STP rates, and minimise repairs and
investigations. When the format is validated on the SWIFT FIN network, it
guarantees the receiver a straight through processable message, at the
lowest possible cost" he concludes.

For more information contact:
Chris Shaw
tel: +44 1484 341 001

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