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Page last updated
February 15, 2003




MT 103: Responding to the market


If any message could qualify as SWIFT's flagship over the years, it is the MT 100. Though developed 25 years ago, it remains the most heavily used message on the SWIFT network.

As the traditional customer payment message, the MT 100 responds directly to the need that was identified when SWIFT was first founded. Markets have, however, evolved. The requirements of financial institutions are more sophisticated, the regulatory environment more stringent and the information flows more substantial than in the mid-1970s. Responding to customers' needs to adapt to this changing environment, SWIFT has created the MT 103, allowing for greater certainty, transparency and automation.

Why do we need it?
The MT 103 was developed for three main reasons. After two decades of heavy use, the MT 100 could no longer accommodate the enhancements required by users of the message. It had reached its limit in terms of further development. The MT 100 had a number of optional data fields that were very often left open to a default interpretation. At the same time, regulatory concerns were moving towards the mandatory inclusion of specific information that could only fit within the free text field (72) of the MT 100. The MT100 did not, for example, cater sufficiently for structured information on charging. With a brief to convey transparency in charges, we therefore set out to address the question of whether we could modify the existing MT100 or whether a new message was needed.

Liberal use of the free text field in the MT 100 was a perfectly natural response by the membership to the need to transmit unstructured information. However, in the longer term, it becomes self-defeating. In an increasingly competitive environment where margins are being continually shaved, banks, to remain profitable, have no option but to reduce processing costs. This can only be done by improving rates of straight through processing (STP) and minimising the need for manual repair and exceptions handling. SWIFT therefore had to find a way to enable customers to send the increasing amount of information that was appearing in field 72 in a more structured way.

How did we build it?
In the past few years, SWIFT's methodology for standards creation has undergone something of a revolution. Five years ago, however, we drew on the expertise of an international working group on standards that met once a year. With the help of that body, we identified the specific needs of the industry for more structured payments information and discussed with them whether to update the existing message or create a new one.

We also received feedback from member countries through the user group chairpersons and, where appropriate, from the separate national payments groups. The MT 103 was released on the network in 1997 for use in a Message User Group (MUG) and for general use in November 2000. From this point on, all financial institutions connected to SWIFT were required to be able to receive and process the MT 103. To enable member institutions to make the necessary changes to their internal systems, a three-year timeframe was set for the withdrawal of the MT 100 from the network.

How do you make the move?
The process of preparing for the MT 103 is relatively straightforward. The idea of a three-year migration period was to enable financial institutions to plan in the changeover to suit their own schedules and to ensure that automation rates did not suffer in the process. However, SWIFT's estimate, supported by the experiences of the multiple institutions that have undertaken a complete migration, is that planning and preparation for implementation should take no more than six months and can be accomplished in two, depending on the size of the institution and the complexity of the payments operation.

The earlier that banks are able to send MT 103s, the more thoroughly they will be able to ensure that all the associated applications work, and work well. Each financial institution needs to consider the impact that the message will have both on the receiving and the sending side. On receipt, different operational departments will need to automatically capture specific elements from the message. Information on charges should, for example, now flow through for notification to the beneficiary. On the sending side, integration is required with the applications that contain the data necessary to populate the MT 103 in an automated fashion.

The new message is designed to meet the payment needs of the entire SWIFT membership. Three versions ; MT 103 Core, MT 103 + and MT 103 REMIT; have been created to cater for diverse business requirements. Each of these versions is validated differently within Europe compared to the non-EU world by SWIFT , resulting in six possible scenarios.

The MT 103+ is a more 'STP-able' version of the M T103. It was produced at the behest of the European financial community, which required a standard that would allow payments to move smoothly across the euro zone without costly repairs. It has a strict profile and validation attached to it and, unlike the core MT 103, will only accept a BIC code for bank identification.

The MT 103 REMIT includes a field which can contain up to 9000 characters that one ordering customer may want to pass on to a beneficiary customer in another structured format, such as EDIFACT or ANSI.

Why now?
From November 2003, there will be no more MT 100s on the SWIFT network. Any institution wishing to send customer transfers over SWIFT will by then have to be capable of sending MT 103s. In the meantime, however, implementation can bring positive benefits in terms of STP and consequent savings on processing costs. At Sibos in Geneva, we look forward to meeting customers seeking to maximise the opportunities arising from implementing and deploying what will soon become SWIFT's new core message.


Nicola Boothby
MT 103 Project Manager



MT 103




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