The SWIFT2Fed service will provide an automated link between the Fedwire and SWIFT connections, which currently exist as two separate systems at many banks today.
The firms say that under the architecture of many common banking infrastructures, a bank must carry out a Fedwire or FedACH transaction through a connection to the Federal Reserve Bank, then send a separate international SWIFTNet message to the receiving bank in order to complete the payment.
With SWIFT2Fed, a bank will be able to send both messages at once over a single connection; the SWIFT message is routed directly to the receiving bank while BankServ communicates with the Federal Reserve Bank to fulfill the transaction.
The new software will ‘wrap’ transactions into files that can be sent over SWIFT’s FileAct or InterAct systems, then unwrapped at their destinations.
The firms expect this single-step approach to reduce the time and expense associated with international payments for many banks – especially foreign banks with branches in the US.
