Electronic banking essentially is an automated process of reconciling bank statements against the customers’ invoices. The bank provides the statement details in a flat file, which is automatically reconciled by the system against the invoices. Any inconsistencies found are reported and corrected.
SWIFT and MT940 standards
SWIFT
SWIFT is a Belgium-based cooperative that provides secure interbank financial messaging services and interface software. It operates a world-wide financial messaging network that is dedicated to the exchange of messages between banks and other financial institutions. The Society operates a messaging service for financial messages, such as letters of credit, payments, and securities transactions, between member banks worldwide. SWIFT’s essential function is to deliver these messages quickly and securely – both of which are prime considerations for financial matters. Member organizations create formatted messages that are then forwarded to SWIFT for delivery to the recipient member organization.
In order for any bank or financial institution to be SWIFT compliant, it needs to have a BIC code. The bank identifier code (BIC) is a code given by the SWIFT organization to enable financial institutions around the world to be uniquely identified. It is a universal method of identifying financial institutions in order to facilitate the automated processing of payments. BIC codes are also known as SWIFT codes.
MT940 format
The MT940 (MT = Message Type) electronic account statement is an international standard developed by SWIFT for the paperless transmission of account information. The MT940 file is a text file with a predefined structure containing account transaction data. In particular, MT940 is used to provide bank information to clients’ cash management, treasury systems and accounting applications. Electronic banking systems support exports of statements in files compliant with the SWIFT MT940 standard. A predefined file format combined with transaction codes allow for automatic booking of transactions by the financial and accounting (ERP) system.
| Code | Description |
|---|---|
| :20: | statement date |
| :25: | account number |
| :28C: | statement number |
| :60F: | opening balance |
| :61: | transaction 1 (value and booking date, currency, amount, SWIFT code, client’s and bank reference, transaction code) |
| :86: | transaction 1 details (transaction code, code description, from/to, other) |
| :61: | transaction 2 |
| :86: | transaction 2 details |
| :61: | transaction n |
| :86: | transaction n details |
| :62F: | closing balance |
| :64: | available balance |
Example:
Message File SWIFT MT940 (international transfers)
{1:F01BPHKPLPKXXX0000000000}{2:I940BOFAUS6BXBAMN}{4:
:20:TELEWIZORY S.A.
:25:BPHKPLPK/320000546101
:28C:00084/001
:60F:C031002EUR5000,00
:61:0310201020D1088,41FTRFREF 12345678/2003//8327000090031790
Transfer
:86:020?00Wyplata/przelew?20DEUTSCHE ELEKTROAPPARATUR?21OBENSTRAS
SE 4 MUNCHEN?22OCMT/EUR1088,41?23CHGS/SHA/EUR20,00?24FAKTURA 333
/2003 ZAPLATA ZA?25FABRYKATY DO TUB 200 SZTUK?26GZX 76 I 300 SZT
UK GZY 77 T?27RANZYSTORY 300 SZTUK BT34SX?28OPORNIKI 500 SZTUK W
Q2?29232FX?30HYVEDEMM700?31701890012872?38DE09700202701890012872
:62F:C031020EUR3891,59
-}