Why to migrate from MT (Message Type) to MX (Message XML) format for SWIFT messages in financial industry. (2024)

FAQs

Why to migrate from MT (Message Type) to MX (Message XML) format for SWIFT messages in financial industry.? ›

MX messages allow for more complex data structures, nested elements, and additional metadata, making them better suited for handling diverse business requirements and evolving industry standards. MX messages support a wider range of data types and formats, including text, numeric, date/time, and structured data.

The MT standard, introduced in 1977, is being phased out in favor of the MX standard due to its increased compliance with the modern ISO 20022 messaging standard. This concise version highlights the key reason for the shift: achieving better alignment with the current industry standard (ISO 20022).

Differentiating MT from MX

MT messages, structured according to the ISO 15022 standard using the FIN protocol, are identified by a three-digit code representing the message category, group, and type. On the other hand, MX messages adhere to the ISO 20022 standard, utilizing the XML protocol.

Our MT/MX Converter is an ideal solution for banks and financial institutions that must maintain the MT_To_MX_Mapping_Process conversion of legacy MT (SWIFT Message Type) format messages to modern MX (ISO 20022) messaging standard. It works with banking application servers and relational database management systems.

MX messages are represented using eXtensible Markup Language (XML). With MX messages, you can transport structured information using XML and specify the structure of the message. At the highest level, an MX message is categorized by its business area, represented by four letters. For example, in camt.

Migrating to MX messages can help organizations comply with regulatory requirements and facilitate reporting, monitoring, and auditability. As the financial industry evolves and new technologies emerge, MX messages offer a more future-proof solution compared to MT messages.

In Summary, Swift is a modern programming language used for developing native apps on Apple platforms, whereas XML is a markup language used for storing and transporting data. They have different syntax, purpose, and extensibility options.

A SWIFT MT103 is a detailed document that is generated once you complete an international transfer at your bank. It acts as a confirmation of payment made from your bank and informs the beneficiary of all the details of the transaction, including any fees applied.

An MT103 is an international standard message format that banks and financial institutions use in the SWIFT network in order to instruct a transfer of funds from one customer to another customer.

What replaced Swift MT? ›

Swift wants to phase out MT messages for cross-border payments and replace it with MX messages, which are based on the XML coding language. These messages contain more data, are more structured and are easier to read.

All SWIFT messages include the literal “MT” (message type). This is followed by a three-digit number that denotes the message category, group and type.

MT103 is the direct payment order to the beneficiary's bank that results in the beneficiary's account being credited a specific funding amount. The MT202 COV is the bank-to-bank order that instructs funds movement in alignment with the MT103 messages.

Thus, the main aim of transitioning from MT messaging standard to MX is to be able to transmit quality data between the parties involved in the message transfer. By quality, we mean – structured, granular, non-truncated and flexible data as we just saw. WANT TO READ MORE?

The Society for Worldwide Interbank Financial Telecommunications (SWIFT) system powers most international money and security transfers. SWIFT is a vast messaging network used by financial institutions to quickly, accurately, and securely send and receive information, such as money transfer instructions.

They enable the seamless transfer of funds between financial institutions in different countries. Whether it's for individuals sending money to family abroad or multinational corporations conducting business transactions, SWIFT offers a secure and efficient means of moving funds across borders.

This SWIFT ISO 20022 migration is a global initiative, which aims to achieve harmonized standards for the exchange of high-value and cross-border payment messages.

All SWIFT messages include the literal “MT” (message type). This is followed by a three-digit number that denotes the message category, group and type.