SWIFT Payments Data Quality Assists in FATF Compliance
- Security , Compliance , Regulatory Standards
- 11.04.2016 01:30 pm
SWIFT will launch Payments Data Quality, an advanced reporting and data analytics service to help financial institutions comply with new international requirements for originator and beneficiary information in payments messages.
The new service will help banks monitor their compliance with the Financial Action Task Force’s (FATF) Recommendation 16 for wire transfers, which was issued in 2012. Regulatory focus on originator and beneficiary information has intensified since the FATF recommendations were issued. A number of jurisdictions have or will enshrine FATF Recommendation 16 in law, thus mandating the inclusion of originator and beneficiary information in payments messages. In the European Union, for instance, the Funds Transfer Regulation (FTR) adopted in 2015 will mandate such information in 2017. Singapore recently implemented FATF Recommendation 16 within MAS Notice 626, and other jurisdictions are expected to follow suit.
The new requirements will pose compliance and operational challenges for financial institutions the world over. The lack of standard practices for formatting some originator and beneficiary details, such as addresses and bank account numbers, in financial messages can make data detection by automated systems difficult. Many banks maintain multiple payments platforms, making it hard to maintain a global, institution-wide overview of payments data quality levels.
SWIFT’s Payments Data Quality service
Industry analysis indicates that originator and beneficiary information is missing or incomplete in a significant number of payments messages. The Payments Data Quality service will check messages using quality verification rules developed by SWIFT in line with industry practice and in cooperation with its community. The service will offer financial institutions:
• a global overview of quality of originator and beneficiary information in their payments messages
• detailed analytics to help them identify potential risk related to specific countries, counterparties and branches
• trusted reporting from SWIFT as a neutral third party to support their internal investigations and discussions with their counterparties
• a web-based platform eliminating the need to install, integrate or maintain additional systems
SWIFT is working closely with its community to address these challenges. Luc Meurant, Head of Financial Crime Compliance Services, SWIFT, says: “This is a perfect example of how SWIFT’s core strengths - collaboration, standards, and the ability to provide banks with a global overview of their payments data - enable us to deliver innovative services that support the effectiveness and efficiency of our customers’ compliance programmes.”
“There is a growing need for improved payments data quality, particularly as it relates to financial crime compliance,” says David Howes, Deputy Head of Financial Crime Compliance, Standard Chartered Bank. “We welcome the collaborative effort SWIFT is putting in place to enable the development and use of industry practice and standards to enhance data quality, transparency and compliance.”
“Ensuring that complete originator and beneficiary information is contained within relevant payment messages helps financial institutions comply with their regulatory obligations,” says Brigitte De Wilde. “However this information is sometimes missing, unstructured and incomplete, complicating its detection. SWIFT’s Payments Data Quality service will provide banks with a unique analytics and reporting service to support their compliance activities, whilst also establishing a global platform for developing industry practices, thereby helping to mitigate operational cost and risk.”