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Navigating the SWIFT Current: A Deep Dive into Banking Protocols

Jun 1, 2023 3:23:00 PM

In the modern corporate world, the efficiency of banking operations depends heavily on the communication protocols used to connect with financial institutions. In this extensive comparison, we delve into the nuances of various protocols like SWIFT FIN, SWIFT FileAct, Host-to-Host, EBICS (versions 2.4, 2.5, and 3.0), APIs, and PSD2, examining their strengths and weaknesses. In this blogpost we will focus on SWIFT FIN and SWIFT FileAct.


SWIFT FIN is a message-based protocol by the Society for Worldwide Interbank Financial Telecommunication (SWIFT) — a global member-owned cooperative providing secure financial messaging services. Over 11,000 financial institutions worldwide utilize SWIFT FIN, allowing for the seamless exchange of structured financial messages.

The primary component of the SWIFT FIN service is its messaging protocol. This system is designed to handle and transmit over 100 types of messages related to payments, securities, treasury transactions, trade services, and other financial business areas.

FIN messages follow a structured format defined by SWIFT, consisting of five blocks — basic header, application header, user header, text, and trailer. Each block contains specific information, such as the message type, sender and receiver's identifiers, priority, delivery monitoring, and banking instruction details. This strict structure ensures a consistent, standardized method for global banking communication.

Moreover, each FIN message has a specific type denoted by a three-digit code, referred to as the Message Type (MT). For instance, MT103 represents a single customer credit transfer, MT202 represents a general interbank transfer, and so on. These predefined message types facilitate automated processing, significantly reducing errors and misunderstandings, thereby increasing operational efficiency.

One of the key strengths of SWIFT FIN is its vast global network and the standardized nature of its messaging protocol. This standardization provides an excellent platform for automating transaction processing and integrating with various back-office systems, which leads to streamlined operations and cost efficiencies.

Additionally, SWIFT provides a range of services to support and complement FIN messaging, such as message validation to ensure messages conform to SWIFT format specifications, and delivery monitoring and prioritization to manage and track message delivery.

On the flip side, the implementation of SWIFT FIN requires a significant investment in terms of both time and resources. Firstly, the use of SWIFT FIN necessitates joining the SWIFT community, which incurs membership costs and ongoing SWIFT fees for the use of its network. Secondly, setting up and maintaining the required infrastructure and systems to send, receive, and process FIN messages can be complex and requires technical expertise.

Furthermore, all SWIFT members must adhere to a set of rules and standards, which includes regular updates to follow the evolving SWIFT standards and meet changing industry requirements. While these updates are necessary to ensure interoperability and security within the SWIFT network, they add to the ongoing maintenance efforts and costs for the corporates using SWIFT FIN.

SWIFT FIN is a robust, secure, and widely accepted protocol for exchanging financial messages. However, its implementation and maintenance can be demanding. Corporates must balance the benefits of standardized messaging and global reach with the costs and complexities of implementing and maintaining SWIFT FIN.


  1. Standardized Messaging: SWIFT FIN uses standardized message types and fields, which helps automate transaction processing and reduces the chances of miscommunication.
  2. Reliability: With over 11,000 financial institutions using it globally, SWIFT FIN has proven to be a reliable choice for financial messaging.
  3. Audit Trail: Each message has a unique Message Input Reference (MIR), which aids in tracing and auditability of transactions.


  1. Complex Implementation: Deploying SWIFT FIN requires sophisticated systems and technical expertise.
  2. Cost: SWIFT services come with membership, maintenance, and per-message costs, which might be prohibitive for some organizations.



SWIFT FileAct is a file-based protocol provided by the Society for Worldwide Interbank Financial Telecommunication (SWIFT) - a trusted global provider of secure financial messaging services. FileAct is designed to transfer large and unstructured files between financial institutions and corporates worldwide.

The core of SWIFT FileAct service is its ability to handle and transmit a wide array of financial data in the form of files. Unlike SWIFT FIN that deals with structured messages, FileAct allows transmission of both structured and unstructured files, giving it the flexibility to carry any type of data, be it reports, images, or complex financial documents.

The key differentiator of FileAct is its ability to manage bulk data transfer. Instead of individual financial transactions, FileAct deals with entire files that may encompass multiple transactions, which are typically batched together for processing. This bulk data handling capacity makes it ideal for businesses that require transmission of large files, such as those involved in securities or trade finance.

A critical strength of FileAct lies in its versatility. It supports a wide range of file formats, providing corporates with the flexibility to send data in the format that best suits their requirements. This is particularly beneficial for businesses that operate in specialized sectors, where data requirements can vary significantly.

Additionally, FileAct is built upon the secure and reliable SWIFT network, providing a high degree of trust and confidence in data transmission. It also incorporates features such as file compression, checksum controls, and delivery notifications, ensuring a smooth and secure file transfer process.

However, the implementation of SWIFT FileAct also comes with its own set of challenges. Similar to SWIFT FIN, the use of FileAct requires corporates to be a part of the SWIFT community, incurring membership and ongoing service fees. Implementing the necessary infrastructure and systems to use FileAct can be complex, demanding technical knowledge and expertise.

The bulk nature of FileAct can also be less efficient for high-frequency, low-volume transactions. In such cases, the structured and individual transaction-focused nature of SWIFT FIN might be a more appropriate choice.

Furthermore, the diversity of file formats and lack of standardization can complicate the automatic processing of FileAct transfers, possibly requiring more manual effort or sophisticated software tools.

SWIFT FileAct provides a robust, versatile, and secure protocol for transmitting bulk financial data. However, corporates need to balance the benefits of flexibility and bulk data handling against the complexities of implementation, maintenance, and the potential need for additional processing tools. As with any financial communication protocol, the suitability of FileAct depends largely on the specific requirements and capacities of the corporate in question.


  1. Versatility: FileAct supports any file format, allowing for a diverse range of documents and messages to be sent.
  2. Bulk Transfers: This protocol excels in handling large files, making it suitable for high-volume transactions.


  1. Not Ideal for Simple Transactions: For straightforward, high-frequency transactions, FileAct may not be as efficient as other protocols.
  2. Cost and Complexity: Similar to SWIFT FIN, FileAct also comes with costs and requires specialized knowledge for implementation.

Unique challenges

While these protocols offer diverse strengths, they also come with their unique challenges. Corporates must carefully assess their specific requirements, technical capabilities, security needs, and the geographical scope of their banking relationships before choosing the most suitable protocol. Consulting with financial and IT experts can help inform this crucial decision.

Navigating the labyrinth of banking protocols can be daunting, but there's a solution that simplifies it all - Cobase. With the ability to connect via all the protocols mentioned above, Cobase is a one-stop platform for corporates looking to streamline their banking communications.

One of the key strengths of Cobase is its deep, in-house knowledge across all banking protocols. Whether it's SWIFT FIN, FileAct, Host-to-Host, EBICS (2.4, 2.5, and 3.0), APIs, or PSD2, the technical experts at Cobase are well-versed in all. They take the burden off corporates to learn and implement these technical standards, allowing them to focus on their core business.

What's more, Cobase owns a financial BIC (Business Identifier Code), offering corporates the advantage of the SWIFT network without the need to set up and maintain their own SWIFT BIC. This means corporates can avoid the often costly and time-consuming process of acquiring a BIC and still reap the benefits of secure, standardized messaging and a globally recognized identity on the SWIFT network.