Accelerating Cloud Payments Modernization with SWIFT

Over the past few years, financial institutions have been going through seismic shifts in the global economy. Among them is the rapid rise and adoption of digital payment methods and the emergence of new cloud-native payment providers. To keep pace and create new value, these institutions are prioritizing the need to modernize their payment infrastructures to improve the customer experience and support industry initiatives such as open banking, on-time payments and ISO20022 migration without compromising security and compliance.

In the field of payments and financial messaging, SWIFT is a fundamental player, responsible for a daily average of 42 million messages. At Sibos 2019, Microsoft announced the first-ever successful public cloud-based end-to-end payment transaction using SWIFT connectivity on Microsoft Azure, as part of our broader investment in payments.

This proof of concept by Microsoft Treasury included hosting their entire payment infrastructure on Azure, including their back-office payment infrastructure, Logic Apps connectivity solution, and SWIFT messaging infrastructure.

Since then, Microsoft has been working closely with SWIFT at a strategic level to design its virtual connectivity solutions on Azure. With the completion of successful pilot projects with a range of financial institutions, the results of these investments are now coming to market.

This new solution, called Alliance Connect Virtual, will be deployable by customers in Azure in 2022, as part of a soft launch with SWIFT. The first version is available now and the next version will follow later this year. Alliance Connect Virtual will enable financial institutions to accelerate their payments modernization strategy to reduce their on-premises footprint, streamline total cost of ownership, and rapidly deploy a cloud-based payments architecture with the operational, security, and additional intelligence offered by Microsoft Cloud. We have created a set of reference architectures that our customers can use as a guide in their deployments as well as Azure policies to simplify compliance with security requirements for SWIFT. Sophie Racquet, Head of Alliance Connect and Digital Connectivity Product Management at SWIFT said:

“The launch of Alliance Connect Virtual marks a major milestone in supporting our customers’ journey to the cloud. Whether in the cloud or on-premises, our community will be able to benefit from the same level of security, reliability and availability, and also attest to their CSP compliance. So far we have received overwhelmingly positive feedback from our pilot customers and I look forward to our gradual launch throughout 2022.”

Bank of New York Mellon (BNY Mellon) was instrumental in the first public cloud connectivity pilot and is already using Azure-based SWIFT solutions for wired payments with Microsoft’s Treasury division. The company’s Treasury Services Group, which provides global payments, trade and cash management services, provides payment services for Microsoft Treasury. Saket Sharma, Director of Strategy and Digital for BNY Mellon Treasury Services, gave his perspective on why he was pioneering SWIFT cloud connectivity with Microsoft:

“As we continue to focus on improving the resiliency and capacity of our payments and broader financial market infrastructure through digitalization, Microsoft Treasury and Azure have been essential collaborators with BNY Mellon to move this program forward. We continue to work closely together, remaining focused on providing always-on payment services and accelerating the delivery of new features to customers around the world.

Anita Mehra, Corporate Vice President of Global Treasury and Financial Services at Microsoft also shared her perspective on the collaboration:

“We are delighted to partner with SWIFT to bring their Alliance Connect Virtual offering to the Azure public cloud. This allows Microsoft Treasury, an early adopter of SWIFT, to continue to focus on customer data security, compliance and resilience.

SWIFT connectivity on Azure goes beyond simply translating an on-premises service into one that runs in the cloud. Microsoft will offer additional value-added services to support our customers, which will include unique seamless integration capabilities with back-end systems and support for the ISO20022 migration initiative (using Azure Logic Apps), as well as an automated and transparent approach to ensure compliance with the Customer Security Program “CSP” (using the Azure Policy solution for SWIFT CSCFv2022).

Microsoft partners with a range of leading global systems integrators in the financial services industry. To help customers take advantage of the new SWIFT connectivity solution on Azure, we worked with Capgemini, Microsoft’s 2021 Partner of the Year for Financial Services, to create services to help financial institutions migrate their current SWIFT infrastructure, including Alliance Access, Alliance Messaging Hub (AMH) or AutoClient, to enable rapid deployment of SWIFT connectivity solutions on Azure. Jeroen Holscher, Head of Global Payments at Capgemini Financial Services shares his view:

Our long-standing strategic partnership with Microsoft and SWIFT’s payment technology is the perfect union to help our customers move quickly from on-premises to cloud. Together, we’ve built a solid framework for businesses to mitigate risk, reduce total cost of ownership, drive innovation at scale, and achieve operational efficiencies. We are excited to partner with Microsoft and support our portfolio of banking, finance and other customers to help them build a future-ready business.”

At Microsoft, we want to ensure that every organization has the digital capability required to succeed in the future and we are committed to helping our financial services customers improve time to value, reduce costs, increase agility and accelerate innovation for sustainable growth. This latest initiative with SWIFT underscores this commitment, and we look forward to the value it will bring to drive innovation for our mutual customers and the financial services industry.

Additional Microsoft Resources

Learn more about architectural guidance for deploying Alliance Connect Virtual on Azure today. And to access additional resources and learn how financial services organizations are digitally transforming using technologies and solutions from Microsoft and our partners, visit our banking, capital markets, Insurance and Microsoft Cloud for Financial Services.

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