If you are looking for SWIFT payments Interview Questions and Answer then you can check our article. You will find the best Interview Questions as well as Technical HR Questions based on SWIFT payments. All the questions and answers are written by an experienced person in that field.
Some Other Tips to Keep in Mind for a Job Interview:
- Wear neat and modest clothing.
- Be aware of your body language.
- Speak clearly while answering the questions. Do not mumble.
- Keep your tone positive and enthusiastic.
- Maintain focus throughout the interview process.
- Bring a copy of your resume.
- Always arrive at the interview venue 10 minutes in advance.
- Always follow up with a thank-you note restating your interest in the position.
SWIFT payments Interview Questions
1. In the SWIFT network at the beginning, banks relied on which system to send wire transfers?
Ans- Prior to the development of the SWIFT network, banks relied on a system called TELEX to send wire transfers.
2. Tell me some alternatives to SWIFT messaging services?
Ans- Although there are other real-time message services like Ripple, Fedwire, and Clearing House Interbank Payments Systems (CHIPS),
3. In the beginning, SWIFT was created to facilitate what?
Ans- In the beginning, SWIFT was created to facilitate communication about treasury and correspondent transactions only.
4. Who is the Chairman and Managing Director of the SWIFT Board?
Ans- Yawar Shah, Chairman of the SWIFT Board and Managing Director, Citi,
5. Who is the CEO of SWIFT?
Ans- Javier Pérez-Tasso, Chief Executive Officer, SWIFT
6. How can Artificial Intelligence improve fraud detection and prevention in instant payments?
Ans- Give Yourself.
7. How to raise the level of cybersecurity for applications and/or data from sophisticated attacks?
Ans- Give Yourself.
8. How can bank channels be secured against ever-increasing cyber-attacks?
Ans- Give Yourself.
9. How many characters does a unique SWIFT code have?
Ans- A unique SWIFT code is comprised of 8 or 11 characters.
10. Under which network the SWIFT transfer will move funds from one account to another?
Ans- All banks engaged in a SWIFT transfer will move funds from one account to another based on an underlying network of Nostro and Vostro accounts. This refers to accounts that banks have opened up with each other for the sole purpose of executing SWIFT transactions.
11. Approximately, How many transactions did SWIFT send per day in 2019?
Ans- In 2019, more than 11,000 SWIFT member institutions sent approximately 33.6 million transactions per day through the network.
12. Tell me some services that SWIFT provides?
Ans- The functionality of the message format design allowed for large scalability. SWIFT gradually expanded to provide services for:
- Clearing systems
- Non-bank financial institutions
- Money brokers and security broker-dealers
- Asset management companies
- Treasury market participants
- Foreign exchange
- And more…
13. What is a BIC code?
Ans- BIC is the International ISO standard ISO 9362:2014. This standard specifies the elements and structure of a universal identifier code, the business identifier code (BIC), for financial and non-financial institutions, for which such an international identifier is required to facilitate automated processing of information.
There are two types: Connected BICs with access to the SWIFT network and non-connected BICs with no access and used for reference purposes only.
14. How many financial institutions and countries where SWIFT provides messaging services?
Ans- Currently, SWIFT provides messaging services to over 10,000 financial institutions in 212 different countries worldwide and helps facilitate global business.
15. Why are financial standards relevant?
Ans- Financial standards are the language with which financial institutions communicate with one another. It is critical that these standards be defined in a collaborative manner with all industry participants to ensure buy-in and acceptance.
16. can we transfer funds from SWIFT only?
Ans- A very important thing to keep in mind is that SWIFT is only a messaging system, SWIFT does not hold any funds or securities. The actual cash may be transferred using some other methods.
17. Tell me in detail about the SWIFT code?
Ans- To understand how the code is assigned, let’s look at Italian bank UniCredit Banca, headquartered in Milan. It has the 8-character SWIFT code UNCRITMM
– First four characters: the institute code (UNCR for UniCredit Banca)
– Next two characters: the country code (IT for the country Italy)
– Last three characters: optional, but organizations use it to assign codes to individual branches.
19. How many international banks formed a cooperative society to operate the SWIFT system?
Ans- The SWIFT system was formed in 1973. Six major international banks formed a cooperative society to operate a global network that would transfer financial messages in a secure and timely manner.
Must Check: Wipro Premium Preparation Material
20. What is a SWIFT MT202 cover payment? Under what circumstances is it used?
Ans- Cross-border wire transfers usually involve several different financial institutions located in different jurisdictions. The SWIFT MT 202 was used to facilitate both customer credit and inter-bank transfers historically. In an effort to decrease processing time an originating bank could send a MT 202 message to an intermediary bank and send the MT 103 (customer credit transfer) directly to the beneficiary bank.
So, in that way the beneficiary bank will go ahead and credit the beneficiary’s account and then will ask for the reimbursement of the same amount to the intermediary bank(which in turn talks to the originating bank for the same).
But, the MT 202 message that was sent to the intermediary bank would not disclose the information of the originating bank and the beneficiary which was leading to many terrorist and money laundering activities(& stuff like that …), so, after 9/11 the US regulatory organizations came up with a new message type that is MT 202 COV (or MT 202 cover message type).
The MT 202 COV message system includes the details of the originating bank and the beneficiary bank’s details so as to monitor any suspicious activities.
General HR Interview Questions
Q. Tell me about your dream job.
Ans- The only dream job I’ve always had was a job that keeps me busy, a job wherein I get to contribute to the company’s success.
Q. Why did you leave your last job?
Ans- I left my previous job because I feel I want to do more, to get hold of a greater opportunity to serve.
Q. What do co-workers say about you?
Ans- My co-worker [name] at [company] never gets tired of telling other people how brilliant I am when it comes to [specific task].
Q. Why should we hire you?
Ans- Following are 5 sample answers
Sample Answer 1:
In my XXX years of experience as a manager, I have build-up solid motivational and team-working skills. I was awarded twice as the manager-of-the-year for my excellent methodologies for motivating employees to encounter challenges and meeting deadlines. If hired, I will carry forward this ability of leadership and strategies for achieving profit gains to this position.
Sample Answer 2:
The subjects I chose while working for my degree in XXX subject have prepared me for this particular post. Also, my two-year experience working with company X has given me the platform to master the skills that I needed to deliver for this position. It seems as if I was prepared all my life to land this job.
Sample Answer 3:
For this particular job, I have the perfect combination of skills and experience that is required. I also bring the experience of strong analytical and problem-solving skills that I have gained while working with other companies. My dedication to excellent work standards will add value to the team and the company.
Sample Answer 4:
I am quite aware of the company’s mission of acquiring the largest consumer base in the area and becoming the front-runner in supplier’s or provider’s communities. My domain knowledge and hold over the customer base can make a big contribution towards this. I would really enjoy the challenge of growing this business bigger.
Sample Answer 5:
As I have said earlier, my years of experience in this field is something that can truly contribute to this company’s success. My sense of dedication in every task that I handle is definitely a big plus. I believe my skills and work attitude measures up to your company
- Emphasize your uniqueness but keep it concise.
- Highlight your strength, skills, and your accomplishments.
- Give an example that describes you as a quick learner.
- State or provide some evidence that shows how you contributed to the growth of the previous company in terms of revenue, goodwill, and brand.
- Include the research you made on the company- for a smaller company you can say- your company is open to new innovative ideas.
What not to say
Try to avoid saying- I need a job, money or this place is close to where I live. Focus on what can you do for the company rather than what they can do for you.
NEVER DO THIS- comparing your skills to others. The natural instinct to this question is we usually start comparing our skills to others when this question is put through.
Q. Are you a team player?
Ans- Yes, definitely. While I will deny the fact that I can work independently with minimal supervision, I’m also one companion every leader would ever want to be in his team. Whatever task is assigned to me, I make sure it meets and exceeds what is expected of
me. I also make it a point to reach out to teammates whenever needed.
Q. What experience do you have in this field?
Ans- I have created several systems that are still in use to this day. Some of the systems I’m proud to include [mention those remarkable ones]
Q. What is your philosophy towards work?
Ans- I have only one philosophy when it comes to working: every piece of work, regardless of size, has to be done on time and in the right manner.
Q. What have you learned from mistakes on the job?
Ans- I learned that without proper coordination, even the simplest task could cause problems in a project. I had this problem during my first job. From that time on, I made sure every I thing follows every detail and coordination.
Q. Describe your management style.
Ans- Basically, my management style comes with promptness and flexibility. To make sure goals are achieved, I religiously study and make plans down to the smallest detail. While I do implement a strict sense of being time-bounded, I also add reasonable allowances and make room for contingencies.
Q. How would you know you were successful on this job?
Ans- Being successful means goals that are set are met. Being successful also means standards are not only reached, but also even exceeded wherever possible.
Q. Are you willing to work overtime? Nights? Weekends?
Ans- I understand that being asked to work for an extended number of hours comes with a good reason in the first place, so I’m ok with it. If an extra effort means something for the company, I’ll be happy to do it.
Q. What will you do if you don’t get this position?
Ans- I have high hopes that I will be hired. In case it turns the other way around, I would have to move on and search for another job.
Interview Questions on SWIFT payments
Q. What have you done to improve your knowledge in the last year?
Ans- I have attended several self-improvements, time management, and personality development seminars. I have also participated in training workshops related to [industry].
Q. How you would be an asset to this company?
Ans- My skills in […] are outstanding. I have earned a lot of awards and certifications from my past employers. As an employee, I handle pressure with ease and can work with minimal supervision.
Q. How long would you expect to work for us in case you are hired?
Ans- As much as possible I would like to be in this company for a long time. For as long as management sees me as an asset, I am willing to stay.
Q. Describe your ability to work under pressure.
Ans- I understand the nature of this position that I am applying for quite well, along with the pressure that comes with it. Being under pressure doesn’t discourage me, it motivates me more.
Q. Tell me about a problem you had with a supervisor.
Ans- I’m sorry but I can’t recall any instance when I had such a problem with a supervisor.
Q. Why do you think you would do well at this job?
Ans- Because I love this job. I feel very confident in myself and my ability to deliver nothing short of quality output. My years of experience helped me develop these skills.
Q. What irritates you about co-workers?
Ans- I always get along fine with my co-workers. I tend to be open-minded and very considerate.
Q. Do your skills match this job or another job more closely?
Ans- I feel my skills are the best fit for this job.
Q. What has disappointed you about a job?
Ans- I once felt that I was not being given enough challenges to work on. I was a bit disappointed because I was so eager to go for more.
Q. If you were hiring a person for this job, what would you look for?
Ans- I would look into two essential things: the ability to do the job right and the proper attitude to do it. Skills without the right attitude will not contribute to productive output.
Q. What role do you tend to play in a team?
Ans- I tend to be versatile when it comes to being a team player. I can act as a leader, an assistant, a communicator, a secretary, whatever role that will ensure the success of the team. That’s because understanding the different roles will allow each player to take on the roll of the other in times of need.
Q. Why are you interested in this position?
Ans- HR professionals love this question so use it as your chance to reiterate your strengths and highlight your applicable skill set and passion for the company and the role. Speak to how your past experiences match the qualifications for the job using keywords from the job description to make the connection stronger. By clearly linking your skills to the position, you are helping the HR manager envision you in the role.
Sample Answer: Having worked within the financial services sector for five years, I have gained an appreciation for the power of client-facing roles in terms of my professional development and organizational impact. As a relationship manager in your firm, I envision bringing my ability to resourcefully optimize any given client’s portfolio as the best way I can help your company’s five-year strategic goal of retaining its client base at a 50% rate. I have done this in the past in X capacity while working for my previous employer and am confident that I can help you accelerate your current goals while growing my career.
Q. Describe a situation when your work was criticized.
Ans- Answer this question by simply mentioning that you take criticism as a positive thing and don’t really get depressed or feel low. Instead, you try to learn from your experiences—good and bad—and improve further and work to the best of your ability and knowledge.
Q. May I contact your present employer for a reference?
Ans- This question is generally asked to see your reaction. Stay calm and cheerful. Say with a smile, yes, absolutely. It’s fine to add that your current boss is not aware of your job search and to ask them to wait until you are selected. Say that at that point they may call your boss for a reference and that you are sure they will get a positive response.
Q. Are you applying for other jobs as well?
Ans- You can answer this question with honesty. Say that you have applied to some of the best companies and this company is on my priority list. Avoid discussing too much on this topic and try to divert their attention to something related to the job for which you are applying.
Q. Describe your work ethics.
Ans- Always give your best in every job, if not, don’t do it at all.
Q. What was your biggest challenge with your previous boss?
Ans- My previous boss was very strict when it came to deadlines and output. It was a challenge for me to meet every expectation he made. It was also a good learning experience for me because it only made me better at what I do.
Q. Do you enjoy working as part of a team?
Ans- Yes, I enjoy it very much. Being part of a team means you get to contribute for the good of all, while at the same time there’s are members who can support you and share more knowledge with you.
SWIFT payment Interview Questions for Experienced
1. Where are the Data centers of SWIFT?
|SN||SWIFT data centers||Type|
|1||Zoeterwoude, Netherlands||OPC (Operating Center)|
|2||Culpeper, Virginia, USA||OPC (Operating Center)|
|3||Switzerland OPC||(Operating Center)|
|4||Hong Kong||Command and Control|
2. When and where the SWIFT was founded?
Ans- SWIFT was founded in Brussels on 3 May 1973 under the leadership of its inaugural CEO, Carl Reuterskiöld (1973–1989),
3. SWIFT is also the Registration authority for which of the following ISO standards?
Ans- SWIFT is also Registration authority (RA) for the following ISO standards:
ISO 9362: 1994 Banking – Banking telecommunication messages – Bank identifier codes
ISO 10383: 2003 Securities and related financial instruments – Codes for exchanges and market identification (MIC)
ISO 13616: 2003 IBAN Registry
ISO 15022: 1999 Securities – Scheme for messages (Data Field Dictionary) (replaces ISO 7775)
ISO 20022-1: 2004 and ISO 20022-2:2007 Financial services – Universal Financial Industry message scheme
4. Under which Law SWIFT cooperative society comes?
Ans- SWIFT is a cooperative society under Belgian law.
5. What are the SWIFTNet Acts?
|SWIFTNet InterAct Realtime|
|SWIFTNet InterAct Store and Forward|
|SWIFTNet FileAct Realtime|
|SWIFTNet FileAct Store and Forward|
6. What is SWIFTNet Phase 2?
Ans- During 2007 and 2008, the entire SWIFT network migrated its infrastructure to a new protocol called SWIFTNet Phase 2. The main difference between Phase 2 and the former arrangement is that Phase 2 requires banks connecting to the network to use a Relationship Management Application (RMA) instead of the former bilateral key exchange (BKE) system.
According to SWIFT’s public information database on the subject, RMA software should eventually prove more secure and easier to keep up-to-date; however, converting to the RMA system meant that thousands of banks around the world had to update their international payments systems to comply with the new standards. RMA completely replaced BKE on 1 January 2009.
7. What is SWIFTNet?
Ans- SWIFTNet Link (SNL) software which is installed on the SWIFT customer’s site and opens a connection to SWIFTNet. Other applications can only communicate with SWIFTNet through the SNL.
8. What is Alliance Gateway (SAG)?
Ans- Alliance Gateway (SAG) software with interfaces (e.g., RAHA = Remote Access Host Adapter), allowing other software products to use the SNL to connect to SWIFTNet
9. What is Alliance WebStation (SAB)?
Ans- Alliance WebStation (SAB) desktop interface for SWIFT Alliance Gateway with several usage options: administrative access to the SAG direct connection SWIFTNet by the SAG, to administrate SWIFT Certificates so-called Browse connection to SWIFTNet (also by SAG) to use additional services, for example, Target2
10. What is Alliance Access (SAA)?
Ans- Alliance Access (SAA) and Alliance Messaging Hub (AMH) are the main messaging software applications by SWIFT, which allow message creation for FIN messages, routing, and monitoring for FIN and MX messages. The main interfaces are FTA (files transfer automated, not FTP) and MQSA, a WebSphere MQ interface.
11. What is The Alliance Workstation (SAW)?
Ans- The Alliance Workstation (SAW) is the desktop software for administration, monitoring, and FIN message creation. Since Alliance Access is not yet capable of creating MX messages, Alliance Messenger (SAM) has to be used for this purpose.
12. What is the Alliance Web Platform (SWP)?
Ans- Alliance Web Platform (SWP) as the new thin-client desktop interface provided as an alternative to existing Alliance WebStation, Alliance Workstation (soon)[when?] and Alliance Messenger.
13. What is Alliance Lite2?
Ans- Alliance Lite2 is a secure and reliable, cloud-based way to connect to the SWIFT network which is a light version of Alliance Access specifically targeting customers with a low volume of traffic.
14. Under which Services does SWIFT comes?
Ans- There are four key areas that SWIFT services fall under in the financial marketplace: securities, treasury & derivatives, trade services. and payments-and-cash management.
|Securities||Treasury and derivatives||Cash management||Trade services|
|SWIFTNet FIX (obsolete)||SWIFTNet Accord for Treasury (end of life October 2017)||SWIFTNet Bulk Payments||SWIFTNet Trade Services Utility|
|SWIFTNet Data Distribution||SWIFTNet Affirmations||SWIFTNet Cash Reporting||–|
|SWIFTNet Funds||SWIFTNet CLS Third Party Service||SWIFTNet Exceptions and Investigations||–|
|SWIFTNet Accord for Securities (end of life October 2017)||–||–||–|
15. What is SWIFTREF?
Ans- Swift Ref, the global payment reference data utility, is SWIFT’s unique reference data service. Swift Ref sources data directly from data originators, including central banks, code issuers, and banks making it easy for issuers and originators to maintain data regularly and thoroughly. SWIFTRef constantly validates and cross-checks data across the different data sets
16. What is SWIFTNet Mail
Ans- SWIFT offers a secure person-to-person messaging service, SWIFTNet Mail, which went live on 16 May 2007. SWIFT clients can configure their existing email infrastructure to pass email messages through the highly secure and reliable SWIFTNet network instead of the open Internet.
SWIFTNet Mail is intended for the secure transfer of sensitive business documents, such as invoices, contracts and signatories, and is designed to replace existing telex and courier services, as well as the transmission of security-sensitive data over the open Internet.
Seven financial institutions, including HSBC, FirstRand Bank, Clearstream, DnB NOR, Nedbank, and Standard Bank of South Africa, as well as SWIFT, piloted the service.
17. In January 2012, Why Sanctions was implemented against Iran?
Ans- In January 2012, the advocacy group United Against Nuclear Iran (UANI) implemented a campaign calling on SWIFT to end all relations with Iran’s banking system, including the Central Bank of Iran. UANI asserted that Iran’s membership in SWIFT violated U.S. and EU financial sanctions against Iran as well as SWIFT’s own corporate rules.
18. Who are the Competitors of the SWIFT system?
Ans- Alternatives to the SWIFT system include:
INSTEX – sponsored by the EU
CIPS – sponsored by China
SPFS – sponsored by Russia
Ripple (payment protocol) – sponsored by Ripple Labs Inc.
19. Tell me the message type of the SWIFT system?
Ans- The table below shows the different categories and the message type descriptions.
|Category||Message type||Description||Number of message types|
|1||MT1xx||Customer payments and cheques||19|
|2||MT2xx||Financial institution transfers||18|
|4||MT4xx||Collection and cash letters||17|
|6||MT6xx||Treasury markets – metals and syndications||22|
|7||MT7xx||Documentary credits and guarantees||29|
|9||MT9xx||Cash management and customer status||21|
20. What do SWIFT India Solution Working Groups do?
Ans- Answer Yourself.
SWIFT Message Interview Questions
21. What do MT202 and MT202 cover?
- MT 202 is used to transfer money between banks.
- MT 1XX message use for Customer to BANK transaction.
- Mt2XX messages use for bank-to-bank transactions.
- MT 202 is used to order the movement of funds to the beneficiary institution via another financial institution/Intermediary Bank.
- Now Mt 202 cov is used when the customer is involved. MT 202 is used when MT103 is using.
- In Short MT 202 Cov message have end to end details, This MT 202 cov basically used for “Anti-Money Laundering ”.
22. Do all wire transactions have MT103 and MT202? Or does MT202 take place only for non-direct relationships between originator and beneficiary bank transfers?
Ans- In order to answer your question, firstly, please understand that MT 103, MT 202 are message types in SWIFT communication among banks in an international context. There are other types as well but to answer specifically to the types you mentioned, i.e. MT 103 and MT 103.
MT 103 type corresponds to a single credit customer transfer, in which a payment is settled directly to the account. Whereas, MT 202 is a cover transfer in which a correspondent bank’s NOSTRO account is involved through which remittance is further transferred to the beneficiary.
Finally, the majority of wire transfers are routed this way, but that’s not always the case. The message type is responsible for the correspondence.
23. What is the difference between MT103 and MT202 wire payments?
Ans- MT is nothing but the message type…
- Generally, MT 1** series messages are for customer payments and cheques
- MT 2** series messages are financial institution transfers.
- MT 103 – is used for cash transfers specifically for cross-border/international transfers. Simply, this is an instruction given by the customer.
- MT 202 – is used for bank/bank transfer (Mostly used by financial institutions/banks, etc.
24. What is SWIFT MT202, MT103, and MT203 COV? How are these three related? Is there any particular sequence in which these messages are issued?
Ans- MT103 used with Covers will always have MT103 issued first. The first bank issues it, and generally at the same time, both messages are generated. The MT103 goes to the beneficiary bank directly whereas the MT202COV goes to the bank with which the first bank and beneficiary bank both hold the account. There could be multiple banks in between – sender’s correspondent, beneficiary bank’s correspondent through which the cover message flows ultimately to the beneficiary bank. This is for MT103 and MT202COV. In the case of serial payment method, only MT103 flows from the first bank to correspondent banks and to the beneficiary bank.
The normal MT202 (I.e. not cover) is used by banks transferring funds for their own purposes which don’t involve a customer instructing the payment (I.e. when no MT103 is involved) Please read through the above link as well.
25. What are the advantages of MT 202 cover payments over direct MT103?
Ans- If you are in India and banking with ICICI, and want to send a swift remittance to an ABC bank in Newzealand where ICICI doesn’t maintain an account. Then there will one or more intermediary banks involved before the beneficiary receives the funds. In this scenario to speed up the payment a separate MT 202 COV message, with minimum details of underlying credit transfer, is send to the intermediary banks to settle the transaction with ABC bank. In the meanwhile, MT 103 is directly sent to the beneficiary bank for credit to the beneficiary.
26. What is the difference between SWIFT MT101 and MT103?
Ans- MT101 messages were designed for Corporates and will allow bulk payment instructions with a header batch (control totals, ordering party, and debit account) and multiple payment instructions. Most Corporate SWIFT solutions will be based around MT101.
MT103 messages relate to a single transfer and is predominately used between Banks and Non-Bank Financial Institutions (NBFI). Its use is also dual purpose, not only can an outward MT103 be used as a payment instruction, but for inward MT103 it can be used as credit advice.
MT101 is generally used for most corporates where payments tend to be for 1st parties.
MT103 is generally used by banks and NBFI’s (MSB’s/MTS …etc) where instructions tend to be for 3rd parties and the potential risk of payment queries are higher (easier to trace/reference individual transactions rather than in a bulk).
27. What is MT 103/202 (two ways)?
Ans- MT103 stands for – Single Customer Transfer
MT202 – Financial Institution Transfer
These are the ways in which the information about “funds” is moved from one bank to another bank using the SWIFT network.
first message has details like, who is sending money, to whom, when, how much, at what exchange rate, and what charges are incurred in it. It’s just an instruction to move funds.
The second message is used by the banks/FIs to actually move funds from one bank’s account to another. Bank may do so to honor the MT103 instruction or for its own account settlement.
Ex. Trump wants to send money from the US to Modi in India on 1st Jan2018. Trump will instruct his bank BNY using either a written instructions or using his internet banking. Bank will then, using the details in the form initiate/construct an MT103 message and send it to SBI India.
Upon receiving this MT103, SBI will know who has sent the fund, from where, how much and to whom, etc.. but SBI will not credit Modi’s account immediately. Because it has only received the instruction from BNY but not the money yet! BNY is then also expected to send an MT202 which will contain details of what account of BNY in SBI’s book to debit and then credit the funds to the beneficiary. This MT202 is actually the cover for MT103 sent earlier and hence called MT202Cov.
Now let’s assume, SBI wants to give some funds back to BNY for any reason (the bank is initiating and the bank is the ultimate beneficiary..no customer is involved), then SBI will send MT202 to BNY with details of what account of SBI to debit. This is normal MT202 (I.e. not cover).
28. What is MT103-202?
Ans- The MT103 is a SWIFT message format used for making payments. MT103 SWIFT payments are known as international wire transfers, telegraphic transfers, standard EU payments (SEPA payments), LVTS in Canada, etc.
MT202 Cov is a SWIFT message format for financial institution transfer. It is used to order the movement of funds to the beneficiary institution via another financial institution/Intermediary Bank. This is used in Cover mode of fund transfer. MT202 Cov is the enhanced version of MT202.
29. Is MTC 103/202 a scam?
Ans- No insult intended, but the question is wrong in two ways. First, it’s “MT,” for “Message Type,” not “MTC.”
Second, the question is based on a wrong assumption. It could just as well have been asked as “Is a letter a scam?” The answer to that question would be “Maybe part of a scam.”
MT 103 and MT 202 are methods for transferring funds. MT 103 (and all class MT 1**) is a method for transferring customer payments; MT202 (and all MT**) is a method for transferring funds specifically between financial institutions. The procedural/technical method aside, it is WHY the funds are being transferred that could be fraudulent. Without knowing that, it’s impossible to say whether it’s a “scam” or not. It appears the question is being posed by someone who is unsure of the request for funds or the instructions for relaying the funds. All I can say to that is: Then don’t do it.
More than that, if the reason the funds are to be transferred is to take advantage of an unbelievable opportunity — i.e., one that is almost or literally “too good to be true” — then, yeah, scam.
Swift payments Technical HR Questions
30. What is the Swift MT103+ FTP manual download, and what is the procedure for the transaction?
Ans- Let me try to answer only – what is MT103+
Manual download & the procedure, I’m not aware of.
Well, it’s the same as normal MT 103 with below differences –
The bank identifiers are always used with option A. Now what it means is – in MT103 messages there are different fields to specify different information like amount, sending bank, beneficiary bank, etc…these are called tags in the SWIFT world. Now, these tags can be used with different options, meaning, for the beneficiary bank, you can either specify its name and address (tag option D), or its unique SWIFT code (option A), or its local clearing code (Option C), etc.. Now, using options other than A, makes the payment fall in manual action for a bank wherein staff will have to manually identify the bank to route the payment to. This impacts the processing speed of the payment. Therefore, with MT103+, only the tags with option A are used in all the applicable tags.
This helps improve the speed of processing the payment since there is no manual action required by the bank’s staff.
31. Is there any risk to a MT 103 money transfer?
Ans- Firstly, to understand MT 103, you need to know two other concepts: S.W.I.F.T. and Alliance.
S.W.I.F.T. (The Society for Worldwide Inter-bank Financial Telecommunication) is an association founded in 1973. Most of the banks in the world joined this association and have been using its platform for transfer business.
The platform SWIFT established is called Alliance. Banks use this platform to transfer funds with each other. You can view Alliance the telecom service provider for banks and the message banks use to transfer money is called SWIFT message.
There are many types of SWIFT messages, MT1XX is used for customer payment and cheques, MT2XX is for financial institution transfers, MT3XX is for treasury market-Foreign exchange, money markets and derivatives…etc.
The MT103 you mentioned is for money transfer for customers.
As for your question, there are two parts: is the SWIFT system safe, and is there any risk related to MT103 transfer.
So far, they have been no report about the SWIFT system itself being hacked. All hacking reports are about hackers stole credentials from banks with weak protection and then use their credentials to send transfer instruction (such as MT103).
It is like saying the telecoms network is very safe, but if someone stole your cellphone and password, they can send messages pretending to be you.
So I guess there is risk associated with the use of SWIFT, all banks need to keep their credentials safe.
32. What is SWIFT MT760? What is it used for?
Ans- To understand exactly what an MT760 message is, you need to know a bit about the history behind it. Back in 1973, in order to facilitate the transfer of money between banks, a group of 239 banks created the Society of Worldwide Interbank Financial Telecommunication or SWIFT. The initial focus of SWIFT was to develop standard protocols and methods for transferring money between one bank and another. They established operating procedures and rules. The first message sent was in 1977. It revolutionized the banking industry and the way the financial markets worked.
In order to transfer messages, SWIFT developed nine different types of messages. The MT760 is one of those messaging options. Usually, it is a message sent at the request of the account holder, from one bank to another. The account holder wants to show the other bank there are funds available to cover a particular transaction. In order to make this message happen, the account holder agrees that their bank will hold the same amount of funds as security for the transaction. This security feature makes the MT760 a cash-backed financial instrument.
Some banks in the United States do not willingly issue MT760 messages. Before initiating such a transaction, you need to verify that your bank will handle those transactions. There are fees associated with these transactions. It can run as high as 0.05% of the transaction amount. This transaction is common for amounts of $1,000,000 or above.
A common use for the MT760 transaction is to back up large orders of product. The guarantee of funds gives the supplier confidence in payment for the order. However, there is one problem. Once the MT760 transaction is issued, the amount is set. If there are any changes to the order, there have to be new transactions or other negotiations around that MT760 transaction.
Another common use of the MT760 is to back up large projects of many different sorts. To get that, you need to have a good project to begin with. Then you need to have a bank willing to issue the MT760. You will have to cover all the costs of the fees associated with it. You also need to know how you will handle closing the transaction at the end of the project.
33. What is the MT103 SPP protocol for transferring funds? Why do most banks not support it?
Ans- I don’t know where you stay, but I’m reasonably certain that most European banks support the SWIFT protocol. SWIFT stands for the Society for Worldwide Interbank Financial Telecommunication. If I remember correctly, it’s a bank cooperative and the banks own it.
The MT103 is specifically for transferring funds across borders. All it does is specify the information needed to transfer money from one bank in a country to another bank in a different country. In order to do this, your bank needs to be a corresponding bank. Even if your bank is not a corresponding bank, that bank will use the services of a bank that is a corresponding bank. Your bank will need some mechanism to transfer funds into it from outside the country. AFAIK, most banks use the protocol you just mentioned. They could also use MoneyGram or Western Union.
34. How should this structure be populated for the different types of high and low-value payment instruments that exist today?
35. How flexible should these instructions be? Does the structure accommodate all business scenarios?
36. Does the structure contain all the information required for the bank to execute the instruction in a fully automated and secure manner to ensure the beneficiary receives the funds at the earliest?
37. Does the bank have the necessary information to meet its KYC and regulatory reporting requirements?
38. What should be the structure of a customer credit transfer when transmitted from corporate customers to banks?
39. How can I make sure the Swift MT103 copy I received is genuine?
Ans- SWIFT msg is something internal to the banking network..it is never shared with the customer nor he can view it. Now coming to security, a SWIFT message works on RMA keys which guarantees both authenticity and confidentiality.
40. What is the difference between a SWIFT and wire transfer?
Ans- In reality very little. It is just that Wired Funds is now a generic term as an international payment transfer. When fast payment systems first came out these were “fast” since they were telegraphed (morse code) between banks (hence wired funds). Later that became TELEX.
Since then with electronic, fiber optics you do not need a telegram, it can be done through the internet and special links to the bank between the remitter and the bank in the form of code and password.
SWIFT is the acronym for: “Society for World, International, Funds Transfer”, which is like a bank in its own right, but more like a handling center through which all electronic payments pass. Each person who has a SWIFT Account has a special number (rather like a bank account number) and on top of that a SWIFT Address which is a bespoke IP address for SWIFT. Again, each time you make a SWIFT payment, it is real-time ( at worst 2 hours) and an audit trail of where the funds came from, which correspondent bank (if through another country) and destination account it finally landed up in.
All banks across the world now have an IBAN number which is bespoke to each bank and branch within a Country.
That provides a full audit trail for both remitter and recipient.
So really it is just an updated, faster, safer version of the old wired fund’s system.
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