Key Considerations When Choosing a SWIFT Service Bureau
More than 11,000 financial institutions, corporations and other financial entities use SWIFT to exchange standardized financial messages. The majority of corporates choose – for obvious reasons – to use a SWIFT-certified Service Bureau to connect to the SWIFT Network.
In a nutshell, corporates have several options for connectivity:
- Direct connectivity, managed in-house by your IT department
- Alliance Lite2 — a packaged offering from SWIFT providing connectivity through a web browser, or the embedded Lite2 for Business Applications (L2BA) used with a TMS
- Connect via a SWIFT Service Bureau
In-house management requires a significant investment in IT resources and in time — not just for implementation and testing, but also for ongoing maintenance and certification. Alliance 2Lite and L2BA work best for small corporates working with standardized messaging, and a low transaction volume.
SWIFT Service Bureaus are third-party organizations that offer SWIFT connectivity, simplifying the process for corporates. Corporates typically turn to these organizations for the same reasons they choose any managed service infrastructure: it requires far less headcount and eliminates the need for in-house expertise. And SWIFT expertise is a must: setting up direct connectivity involves managing software deployments, special security procedures, and compliance testing in addition to the maintenance we mentioned earlier.
Check for SIP Compliance
If you are looking to use a SWIFT Service Bureau, be sure to confirm its SIP status. SWIFT’s Shared Infrastructure Programme defines operational standards for third-party service bureaus offering SWIFT connectivity, to ensure quality, security, and reliability.
Certified service bureaus adhere to the highest security standards, as required by the SWIFT Customer Security Programme (CSP). SWIFT’s Customer Security Controls Framework (CSCF) describes security baseline requirements for all SWIFT users, and for 2020, will encompass 21 mandatory and 10 advisory controls. Working with a knowledgeable service bureau not only helps with infrastructure and transactional security, but also eases the pain of CSCF compliance. All service bureaus are required to have SWIFT-certified staff on their support teams, and your implementation team will be able to advise on the changing CSCF requirements.
SWIFT regularly reviews and adapts the SIP to reflect market and technical developments as well as security threats. All service bureaus that have registered and/or have demonstrated SIP compliance are listed in SWIFT’s Service Bureau Directory with a clearly labeled status. If a service bureau isn’t in the directory, it is not in compliance.
Going Beyond SWIFT
Maintaining SIP compliance and SWIFT expertise is more important now than ever, as the migration to ISO 20022 continues — but just because an organization is a SWIFT Service Bureau does not guarantee that it has expertise in any other type of bank connectivity.
If you are looking for the freedom to connect to banks using methods other than SWIFT — for example, host-to-host, EBICS, API, etc. — or need to onboard new banks in emerging markets that may not be SWIFT-ready — you may have to do that on your own. Working with a service bureau that has a thorough understanding of the complete payments and bank communications landscape, including alternative means of connectivity, can prove invaluable.
Cheaper ≠ Better
While a service bureau will more than likely be less expensive overall than having all the resources in-house to manage and maintain your SWIFT connectivity, an investment is still required. There is manual work involved on the back end, and establishing bank connections from scratch won’t happen overnight.
If the price you’re quoted sounds too good to be true, it probably is — and you may end up with unexpected budget overages to handle more complex setups and file or format conversion issues related to initial connectivity migration or ISO 20022, or customer service that isn’t available when you really need it.
Extending SWIFT Connectivity
Fides enables communication via any channel – including SWIFT, EBICS, H2H and APIs – and supports any format. We have built a library of hundreds of formats that we can extend to any of our customers, including all SWIFT MT/MX formats, ISO20022, ACH, EDI, AFB, DTA, ABA, and many more.
As a SWIFT-certified Service Bureau compliant with the most recent SIP release, Fides can support and manage eligible organizations wishing to become SWIFT for Corporates members. And as an independently operated subsidiary of Credit Suisse, Fides can also extend SWIFT connectivity through the use of the SWIFT lead bank model, allowing clients to reach any bank on the SWIFT Network. This hybrid model makes us unique, and many of our clients use our multi-network, dual-BIC combination to ensure global banking coverage, increase speed-to-market, and reduce costs.
Want to learn how Fides can help you manage your SWIFT connectivity and more? Contact us today!