Did you know you are being scored on your MT103 confirmations?
If you are a SWIFT member receiving MT103 messages, you are being scored on your adherence to SWIFT’s requirement that you confirm receipt of these messages to the SWIFT Tracker BIC, within two business days of the payment value date. Gpi members receiving MT103 messages are scored on their adherence to this policy, implemented as of November 22, 2020, and their score is visible to the entire gpi community through the Basic Tracker’s Observer Insights tool. (If you are a non-gpi member, these are known as “Universal Confirmations”, and you are also responsible for adhering to these guidelines.)
What do you need to know?
As of June 2021, all gpi-member institutions’ compliance with the MT103 confirmations requirement is being made visible to the SWIFT gpi community, along with details such as the number of weeks of compliance or non-compliance, and the score notated by color. The whole gpi community can see scores that are marked either in Green or Red, while only your organization can see if your score is marked in Orange.
If you scored in Orange, your organization has a 12-week window to become compliant before being marked in Red in the Observer tool. Note that the actual compliance score is displayed in the Tracker with a 3-week lag, meaning that any changes in status will only be reflected 3 weeks after the associated activity.
In addition, FIN users in the Supervised Financial Institution (SUPE) and Payment System Participant (PSPA) user categories who do not provide MT103 confirmations after November 2020 will be seen as non-compliant with the roles and responsibilities that are applied to all SWIFT customers, as set out in the FIN Service Description. (Note that the FIN Service Description, together with the SWIFT General Terms and Conditions and other relevant SWIFT Contractual Documentation, is an integral part of the contractual arrangements between SWIFT and its customers for the provision and the use of FIN.)
Why is sending the MT103 confirmations important in the first place?
According to SWIFT, sending payment receipt confirmations is a crucial step in modernizing the payments ecosystem to meet the modern consumer demand for a real-time traceable payments environment. It is important that all banks take action to enable this and join the advancement of the global banking community.
How is your score calculated by SWIFT?
Scoring is done based on a set of rules, as listed below.
- All recipients of FIN MT103s via SWIFT are measured for intermediary and instructed agents.
- The non-FIN flows like (MT199 or API calls) are excluded from MT103 confirmation score measurements.
- All the statuses exchanged within two business days will result in a good score (including ACCC, ACSP, G000/G001/G002/G003/G004 RJCT).
- If any MT103s are being used for anything other than payment purposes or have been invalidated by the Tracker, those are excluded from MT103 confirmation score measurements.
SWIFT considers a financial institution compliant with this policy based on the MT103 rulebook: if the said financial institution has confirmed at least 80% of their inbound MT103s within two business days of receiving them, they are considered compliant.
Measurement is computed weekly, based on all messages contained in the transactions initiated in each given week, and this is exposed in the Basic Tracker’s Observer tool after 10 days.
When a financial institution confirms more than 80 percent of their pending MT103 payments during the reported week, the financial institution will be above the set threshold. Therefore, it will be considered a compliant institution with respect to the MT103 confirmation business rules and the score will subsequently appear in green in the Basic Tracker’s Observer tool.
If a financial institution fails to update at least 80 percent of their MT103 payments during the reported week, the financial institution will fall below the threshold. Therefore, it will be considered a non-compliant institution with respect to the MT103 confirmation business rules and its score will subsequently appear in orange in the Basic Tracker’s Observer tool.
In the event that financial institutions are non-compliant for 12 consecutive weeks, the score appears in red in the Basic Tracker’s Observer tool. Subsequently, the institution will lose access to certain tracking features, including the abilities to perform UETR or TRN searches on the Tracker, to have visibility into sent payment statuses, and to have access to other important metrics. However, if an institution confirms at least 80% of all received MT103s within two business days, they will be considered compliant again and features will be reinstated when the score is refreshed in the next MT103 confirmation score publication in the Tracker.
So what? Why does it matter whether you are compliant?
Organizations that fall out of compliance with the MT103 confirmations requirement are at risk of losing access to important gpi tracking features, which can adversely impact their ability to make important financial decisions. They will also appear as non-compliant to the larger SWIFT gpi community in the Observer tool.
If an organization is in the orange or red categories, it must follow the compliance rules for a minimum of 22 or 23 days in a row, depending on the month, to appear as compliant within the Observer tool on the first day of the Next month. For example, an organization that does not meet the requirements would have to confirm 80% of its MT103s within 2 business days at least from July 10 to July 31, for it to be published as compliant on August 1. Also, if a non-compliant organization does not receive an MT103 to confirm, it will remain non-compliant until it begins receiving and confirming payments again.
How can Axletree help?
We can help setup your access to either the Basic Tracker or the full gpi tracker, based on your gpi membership status, and offer our expertise on end-to-end tracking and confirmations of payments. Our consultants can also help you to review your payments within the Tracker and calculate your gpi score independently so you can have a better understanding of your status before it is published in the Observer tool.
If your organization would like our help in sending the MT103 confirmations, we can use our in-house integration application, Symmetree, to send them to the SWIFT tracker as MT199 messages. Our ability to combine the functionality of Symmetree with the Tracker can unlock additional controls and functionality based on your specific needs.
Reach out to us at info@axletrees.com or +1-732-296-0001 to learn more about gpi scoring and how we can help you stay compliant!
Read our article SWIFT gpi? Why? to learn more!
June 29, 2021
