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What is a Messaging Standard?

In the last post we understood the purpose of SWIFT and how member entities are identified in the SWIFT network, next let’s understand how members communicate among each other in a SWIFT network.

Communication between members happens using standardized message formats.

You can imagine messaging standards as predefined formats so that when such messages are exchanged between two parties following the same standards, they can decode and understand what the counterparty is trying to convey. There are many kinds of messaging standards which are used globally to communicate among banks. The two messaging standards which are supported by SWIFT are MT and MX messages.

ISO Standards in SWIFT

MT messages are structured according to the specifications of the ISO 15022 standard and the newer MX messages according to the ISO 20022 standard. You may be wondering what this ISO is.

ISO or International Organization for Standardization is an independent, non-governmental international organization which develops standards which provide the best way of doing something.

They have joined hands with SWIFT to create these messaging standards.

What are SWIFT MT Messages?

What are SWIFT MX Messages?

The SWIFT MX messages are getting migrated to the MX messages to overcome the shortcomings of the MT messages. More about the MX messages and the migration in later posts. Keep reading.

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Next:    SWIFT MT to MX Migration: Unleashing Data Quality and Flexibility in Financial Messaging