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Oracle EBS & SWIFT

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Whenever the Bank Intergation is required , the very first term would come in mind is SWIFT , a very similar way as EDI sort of messaging servics that Financial sectors are using .So let explore what is SWIFT and how many of these can be potenially targetted for Integration .

What is a S.W.I.F.T?

S.W.I.F.T. (or SWIFT) stands for Society for Worldwide Interbank Financial Telecommunication. It is a non-profit organization comprised of member financial institutions. It was established in 1973 by European bankers who needed a more efficient and secure system for inter bank communications and transfer of funds and securities. Until then, all inter bank communications were by telephone, telex, courier, or mail.

Swift Messages

SWIFT messages are preset and referred to by category numbers called MT numbers. Through this network (a.k.a. SWIFTnet) information can be exchanged using special crafted messages known as Message-Types (MT).

SWIFT message types

SWIFT messages consist of five blocks of data including three headers, message content, and a trailer. Message types are crucial to identifying content.

All SWIFT messages include the literal "MT" (Message Type). This is followed by a 3-digit number that denotes the message type, category, and group.

SWIFT standards

There are three variants of SWIFT standards you can find as there documentation:

1. Owned by SWIFT: These are message using the Financaial service on the SWIFT network. Industry accepted word is called MT (Message Type) messages and very popular one are MT101, MT103, MT940, etc. More over there are nine categories of SWIFT MT messages out of which 4-5 major category can be utilize with any ERP package.

2. Owned by ISO: There are two sets of standards that SWIFT uses which are technically "owned" by ISO- an organisation of which SWIFT is a member. These are ISO15022 and ISO20022 (also known as UNIFI). The newer addition in this series is ISO20022 is expressed as an XML implementation.

ISO20022 [2] are the XML messages associated with Payments and reporting, a new series of securities messages, trade, etc.

3. Owned by SWIFT (not ISO) but using XML

These are also MX messages (to SWIFT) but have not been submitted (or not submitted yet) to ISO 20022.

Several mapping and middleware vendors support the ISO 20022 suite of XML messages. SAP and Oracle have made announcements as well on ISO20022 support.

Some of Swift Message for corporte Tressure Intrest

Out of 9 major catogory , here is list of 3 major category out of which some of them are heavily used in EBS or any ERP system.

 

Category 1 :Customer Payments & Cheques
MT MT Name Business Purpose
101 Request for Transfer Requests to debit a customer's account held at another institution
102 / 102+ Multiple Customer Credit Transfer Conveys multiple payment instructions between financial institutions
103 / 103+ / 103 REMIT Single Customer Credit Transfer Instructs a funds transfer
104 Direct Debit and Request for Debit Transfer Message Conveys direct debit instructions and requests for direct debits between financial institutions
105 EDIFACT Envelope An envelope which conveys a 2k EDIFACT message
106 EDIFACT Envelope An envelope which conveys a 10k EDIFACT message
107 General Direct Message Conveys direct debit instructions between financial institutions
110 Advice of Cheque(s) Advises or confirms the issuance of a cheque to the drawee bank
111 Request for Stop Payment of a Cheque Requests the drawee bank to stop payment of a cheque
112 Status of a Request for Stop Payment of a Cheque Indicates action(s) taken in attempting to stop payment of a cheque
121 Multiple Interbank Funds Transfer Contains an EDIFACT message

Catrgory 3: There are some MT used for integration with Oracle Cash and Oracle Tresury.

 

Category 3:Treasury(Fx Exchange, Money Markets & Derivatives)
MT MT Name Business Purpose
300 Foreign Exchange Confirmation Confirms information agreed to in the buying/selling of two currencies
303 Forex/Currency Option Allocation Instruction Instructs the allocation of a block trade (forex or currency option)
304 Advice/Instruction of a Third Party Deal Advises of or instructs settlement of a third party foreign exchange deal
305 Foreign Currency Option Confirmation Confirms information agreed to in the buying and selling of vanilla options on currencies
306 Foreign Currency Option Confirmation Confirms information agreed to in the buying and selling of exotic options on currencies
307 Advice/Instruction of a Third Party FX Deal Advises of or instructs settlement of a third party foreign exchange deal
308 Instruction for a Gross/Net Settlement of Third Party FX Deals Informs which deals done on behalf of a third party area to be settled gross and which ones netted
320 Fixed Loan/Deposit Confirmation Confirms the terms of a contract relative to a fixed loan/deposit transaction
321 Instruction to Settle a Third Party Loan/Deposit Advises the trade details and instructs the settlement of a fixed term loan/deposit done with a third party financial institution
330 Call/Notice Confirms the terms of a contract relative to a call/notice loan/deposit transaction
340 Forward Rate Agreement Confirmation Confirms the details of a forward rate agreement
341 Forward Rate Agreement Settlement Confirmation Confirms the settlement details of a forward rate agreement
350 Advice of Loan/Deposit Interest Payment Advises of a loan/deposit interest payment
360 Single Currency Interest Rate Derivative Confirmation Confirms the details of a single currency interest rate
361 Cross Currency Interest Rate Swap Confirmation Confirms the details of a cross currency interest rate swap transaction
362 Interest Rate Reset/Advice of Payment Confirms or advises the reset rates of the floating interest rate(s) in a single or cross-currency interest rate derivative transaction and/or the payment of interest at the end of an interest period
364 Single Currency Interest Rate Derivative Confirms the details of the partial or full termination or recouponing of a single currency interest rate swap, cap, collar or floor
365 Cross Currency Interest Rate Swap Termination/Recouponing Confirmation Confirms the details of the partial or full termination or recouponing of a cross, currency interest rate swap
380 Foreign Exchange Order Orders to purchase or sell a specific amount of a certain currency
381 Foreign Exchange Order Confirmation Confirms the execution of a FX Order Previously sent

and Last some of additional Swift messaging is used for Integration.

 

Category 9 : Cash Management & Customer Status

MT MT Name Business Purpose
900 Confirmation of Debit Advises an account owner of a debit to its account
910 Confirmation of Credit Advises an account owner of a credit to its account
920 Request Message Requests the account servicing institution to send an MT 940, 941, 942 or 950
935 Rate Change Advice Advises the Receiver of general rate change(s) and/or rate change(s) which applies to a specific account other than a call/notice loan/deposit account
940 Customer Statement Message Provides balance and transaction details of an account to a financial institution on behalf of the account owner
941 Balance Report Provides balance information of an account to a financial institution on behalf of the account owner
942 Interim Transaction Report Provides balance and transaction details of an account, for a specified period of time, to a financial institution on behalf of the account owner
950 Statement Message Provides balance and transaction details of an account to the account owner
960 Request for Service Initiation Message Initiates a Bilateral Key Exchange (BKE) process
961 Initiation Response Message Acknowledges receipt of an MT 960
962 Key Service Message Contains a bilateral authenticator key for another financial institution
963 Key Acknowledgement Message Acknowledges receipt of the bilateral key sent in a previous MT 962
964 Error Message Responds to an MT 960, 961, 963, 966 or 967 if an error has been detected to report that error
965 Error in Key Service Message Responds to an MT 962 if an error has been detected and reports that error
966 Discontinue Service Message Discontinues one or several bilateral authenticator keys already in existence between the Sender and Receiver
967 Discontinuation Acknowledgement Message Acknowledges receipt of a previous MT 966 and confirms discontinuation of the authenticator key(s) specified in the
970 Netting Statement Provides balance and transaction details of a netting position as recorded by a netting system
971 Netting Balance Report Provides balance information for specified netting position(s)
972 Netting Interim Statement Advises interim balance and transaction details of a netting position as recorded by a netting system
973 Netting Request Message Requests an MT 971 or 972 containing the latest available information
985 Status Enquiry Requests an MT 986
986 Status Report Provides business related information about a customer or institution

 

 

Legend
Not Required Integration Required Might be used Already have End to end Out of box in EBS

What does a SWIFT look like?

A SWIFT consists of a one-page document containing the name and code of the originating bank, the date and time, the address and code of the receiving bank, the name and internal code of the officer initiating the transmission, the names and numbers of the accounts involved in the transfer, a description of the asset being transferred, the MT category of the transmission, and acceptable, standardized phrases as described above.

A sample File for MT looks like as [3]

Wrapping up -Oracle EBS with 'SWIFT Outside

EBS and enhance banking Functionlity is still one of the area which is not a out of box functionlity.

Therefore,Oracle does requires some sort of Integration Package for Module for SWIFT for there customer can do such things:

Hoping , Oracle must have plan to provide some more in this area. Do you really requires "Oracle Swift" application in EBS..what you say.

4 Comments (Open | Close)

4 Comments To "Oracle EBS & SWIFT"

#1 Comment By M.K.Thamaraiselvan On June 9, 2008 @ 11:25 pm

Good day,

1. Could you give me the difference between R11i and R12 Functional & Technical.

2. In R12, How shall we run the payment file creattion.

3. xml – template, How shall we create one template for running payment file creation

Thanks

M.K.Thamaraiselvan

#2 Comment By Dinesh Chauhan On July 9, 2008 @ 4:54 am

Hi Sanjit,
Could you shed some light on IMPS(International Mass Payments System) Please

#3 Comment By Sanjit Anand On July 9, 2008 @ 6:24 am

Hello Dinesh ,

I really never heard this term in my last 9-10 yrs in this industry. I think this is not a genric word for payment industry, might be supported into only into specfic country. More Or less I think, if not wrong , might have some sort of payment provider like PaymentTech or FirstData in US.Still you have to clarify.

Could you through some more light , so that we can explore together.

regards
sanjit

#4 Comment By zia On March 3, 2009 @ 4:54 am

Hi

I am looking for details regarding MT 202 of swift format compatability with oracle R12

looking forward towards an early reply

regards