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Accelerating payments modernization in the cloud with SWIFT

Over the last few years, financial institutions have been through seismic changes in the global economy. Among them has been the rapid increase and adoption of digital payment methods and the emergence of new cloud-native payment providers. To keep pace and unlock new value, these institutions are prioritizing the need to modernize their payment infrastructures to enhance the customer experience and support industry initiatives like open banking, real-time payments, and ISO20022 migration without compromising security and compliance.

In the payments and financial messaging area, 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 architect its virtual connectivity solutions on Azure. With the completion of successful pilots 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 available for customers to deploy in Azure in 2022, as a phased launch together with SWIFT. The first release is available now and the next release will follow later this year. Alliance Connect Virtual will enable financial institutions to accelerate their payments modernization strategy to reduce their on-premises footprint, rationalize the total cost of ownership, and rapidly deploy cloud-based payments architecture with the added operational, security and intelligence benefits the Microsoft Cloud offers. We have created a set of reference architectures for our customers to use as guidance in their deployments as well as Azure Policies to simplify meeting security requirements for SWIFT. Sophie Racquet, Head of Alliance Connect and Digital Connectivity Product Management at SWIFT states:

“Launching 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 experience the same level of security, reliability and availability, and attest their CSP compliance too. We’ve received overwhelming positive feedback from our pilot customers so far and I’m looking forward to our phased 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 wire payments with Microsoft’s Treasury division. The company’s Treasury Services group, which delivers global payments, trade services, and cash management, provides payments services for Microsoft Treasury. Saket Sharma, Chief Strategy and Digital Officer for BNY Mellon Treasury Services gave his perspective on the reason for pioneering SWIFT connectivity in the cloud with Microsoft:

“As we continue to concentrate on enhancing the resiliency and capacity of our payments and broader financial market infrastructure through digitization, Microsoft Treasury and Azure have been critical collaborators with BNY Mellon in advancing this agenda. We continue to work together closely, remaining focused on providing always-on payment services and accelerating delivery of new capabilities to clients around the world.” 

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

“We are thrilled to partner with SWIFT in bringing their Alliance Connect Virtual offering to the Azure public cloud. This allows Microsoft Treasury, an early adopter of SWIFT, to continue our focus on security, compliance & resiliency of customer data.”

SWIFT connectivity on Azure goes further than simply translating an on-premises service to one that runs in the cloud. Microsoft will be offering additional value-add services to support our customers which will include unique seamless integration capabilities with back-end systems and support to the ISO20022 migration initiative (using Azure Logic Apps), and an automated and seamless approach to ensure compliance with SWIFT’s Customer Security Programme “CSP” (using 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’ve worked with Capgemini, Microsoft’s 2021 Partner of the Year for Financial Services, to build services to help financial institutions with the migration of their current SWIFT infrastructure, including Alliance Access, Alliance Messaging Hub (AMH) or AutoClient, to enable rapid deployment of the SWIFT connectivity solutions on Azure. Jeroen Holscher, Head of Global Payments at Capgemini Financial Services shares his perspective:

‘’Our long-standing strategic partnership with Microsoft and SWIFT’s payments technology is the perfect union to help our customers rapidly transition from on-premise to cloud. Together, we have built a strong framework for enterprises to mitigate risk, reduce TCO, drive innovation at scale, and achieve operational efficiencies. We are very excited to collaborate with Microsoft and support our client portfolio across the banking, financial and other industries to help them build a future-ready business for tomorrow.’’ 

At Microsoft, we want to ensure that every organization has the digital capability required to succeed going forward and 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 highlights that 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 information about architectural guidance for the deployment of Alliance Connect Virtual on Azure today. And to access additional resources and learn how financial services organizations are transforming digitally using technologies and solutions from Microsoft and our partners, visit our banking, capital markets, insurance, and Microsoft Cloud for Financial Services home pages.