The SWIFT2Fed service will provide a valuable automated link between the Fedwire and SWIFT connections, which currently exist as two separate systems at many banks today.
Under the architecture of many common banking infrastructures, a bank must carry out a Fedwire or FedACH transaction through a connection to the Federal Reserve Bank, then send a separate international SWIFTNet message to the receiving bank in order to complete the payment.
With SWIFT2Fed, a bank will be able to send both messages at once over a single connection; the SWIFT message is routed directly to the receiving bank while BankServ communicates with the Federal Reserve Bank to fulfill the transaction. The new software will âwrapâ transactions into files that can be sent over SWIFT's FileAct or InterAct systems, then unwrapped at their destinations. The single-step approach is expected to reduce the time and expense associated with international payments for many banks â especially foreign banks with branches in the United States.
âWe've found that a number of banks doing business in the United States rely on a two-step process for international payments, often involving a high level of manual data entry. Many of them could benefit from using a single, integrated method instead,â said Mary Ellen Putnam, BankServ's vice president and international business unit manager. âWe're very excited that SWIFT, with all of its expertise and resources, is working with us to solve this problem for the banking industry.â
Ed Adams, regional director, Banking Industry Division, SWIFT, looks forward to enhancing the network's capabilities by giving its members the capacity for new types of transactions.
âSWIFT is pleased to have the opportunity to further enhance the value we provide to our community with the addition of the SWIFT2Fed service,â he said. âThis initiative with BankServ underscores the banking communityâs call for innovative solutions to wider-reaching issues.â