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SWIFT Looks to Web Services

Looking to drive the adoption of Web services as a mechanism to extend industry integration to financial institutions of all sizes, the banking industry's wire transfer backbone, the Society for Worldwide Interbank Financial Telecommunications (SWIFT) today signed an alliance agreement with Web service integration firm IONA .

SWIFT is a community of financial institutions that provides a de facto messaging standard and value added network (VAN) for payment processing, treasury, securities and trade services between banks, brokers, market utilities and service providers to reduce costs, improve automation and manage risk.

As an alliance partner, IONA will work with SWIFT not only to submit, adopt and promote messaging standard proposals and technical guidelines, but also to extend industry integration to financial institutions of all sizes, including the growing number of smaller buy-side participants, such as investment managers and hedge funds.

"Using a simpler and lower cost mechanism, like Web services, to extend SWIFT integration and leverage new standards, like ISO-15022, especially for buy-side participants, is really quite innovative and practical," said Linda Bookheim, Partner Solutions Business Manager at SWIFT.

According to Gary Maier, Managing Director of Global Financial Services at IONA, In most cases the benefits of SWIFT have only been available to the largest of financial institutions because, at least in part, of the inherent complexity and cost of maintaining cryptic EDI messages over dedicated, and expensive, T1 lines.

"In order to achieve the global processing efficiencies and cost savings of true, industry-wide, Straight-Through Processing, access to SWIFT and other related industry services must be made available to all participants," said Maier. "This can only be accomplished, however, by extending integration from the largest of mega money-center banks to the smallest of hedge funds."

As a member of the SWIFT alliance, IONA is advocating the use of Web services, in conjunction with new industry XML standards, like ISO-15022, to ease this level of integration.

ISO 15022 replaces the previous standards for electronic messages exchanged between securities industry players, ISO 7775 and ISO 11521.

ISO 15022 sets the principles necessary to provide the different communities of users with the tools to design message types to support their specific information flows, including a set of syntax and message design rules, a dictionary of data fields and a catalogue for present and future messages built by the industry.

The full-year implementation period to convert fully to the new SWIFT standard, ISO 15022, is well underway. On November 17, 2002, SWIFT will permanently remove 7775 messages.