How to manage SWIFT MT/MX Migration in SAP 

SWIFT now supports the exchange of ISO 20022 XML or MX message via the so-called FINplus network. In parallel, the legacy MT format messages remain to be exchanged over the ‘regular’ FIN network; The MT flow for message categories 1 (customer payments), 2 (FI transfers) and 9 (statements) through the FIN network will be decommissioned per November 2025. 

As such, between March 2023 and November 2025, financial institutions need to be able to receive and process MX messages through FINplus on the inbound side, and optionally send MX messages or MT messages for outbound messaging. After that period, only MX will be allowed.  

CBPR+ and HVPS+ 

Another important aspect of the MX migration is the development of the CBPR+ and HVPS+ specifications within the ISO20022 XML standard. These specifications dictate how an XML message should be populated in terms of data and field requirements for Cross Border Payments (CBPR+) and Domestic High Value Payments (HVPS+). Note that HVPS+ refers to domestic RTGS clearing systems and a number of countries are in the process of making the domestic clearing systems native ISO20022 XML-compliant.  

Impact for Corporates 

As of today, there should be no immediate need for corporates to change. However, it is advised to start assessing impact and to start planning for change if needed. We give you some cases to consider: 

1. A corporate currently exchanging e.g. MT101/MT103/MT210 messages towards its house bank via SWIFT FIN Network to make cross border payments, e.g. employing a SWIFT Service Bureau or an Alliance connection. This flow will cease to work after November 2025. If this flow is relevant to your company, it needs attention to be replaced. 
2. Another case is where, for example, an MT101 is exchanged with a house bank as a file over the FileAct network. Now it depends purely on the house bank’s capabilities to continue supporting this flow after 2025; it could offer a service to do a remapping of your MT message into an MX. This needs to be checked with the house banks. 
3. The MT940 message flow from the house bank via FIN also requires replacement. 
4. With respect to the MT940 file flow from house bank via FileAct, we expect little impact as we think most banks will continue supporting the MT940 format exchange as files. We do recommend to check with your house bank to be sure. 
5. High Value Payments for Domestic Japanese Yen using Zengin format; the BOJ-NET RTGS clearing system has already completed the migration to ISO20022 XML standard. Check with your house bank when the legacy payment format will become unsupported and take action accordingly.  

These were just some examples and should not be considered an exhaustive list.  

In addition, moving to the ISO20022 XML standard can also provide some softer benefits. We discussed this in a previously published article. 

Impact on your SAP implementation 

So you have determined that the MT/MX migration has impact and that remediating actions need to be taken. What does that look like in SAP? 

First of all, it is very important to onboard the bank to support you with your change. Most typically, the bank needs to prepare its systems to be able to receive a new payment file format from your end. It is good practice to first test the payment file formatting and receive feedback from the banks implementation manager before going live with it.  

On the incoming side, it is advisable to first request a number of production bank statements in e.g. the new CAMT.053 format, which can be analyzed and loaded in your test system. This will form a good basis for understanding the changes needed in bank statement posting logic in the SAP system.  

PAYMENTS 

In general, there are two ways of generating payment files in SAP. The classical one is via a payment method linked to a Payment Medium Workbench (PMW) format and a Data Medium Exchange (DME) tree. This payment method is then linked to your open items which can be processed with the payment run. The payment run then outputs the files as determined in your DME tree. 

In this scenario, the idea is to simply setup a new payment method and link it to a desired PMW/DME output like pain.001.001.03. These have long been pre-delivered in standard SAP, in both ECC and S/4. It may be necessary to make minor mapping corrections to meet country- or bank-specific data requirements. Under most circumstances this can be achieved with a functional consultant using DME configuration. Once the payment method is fully configured, it can be linked to your customer and vendor master records or your treasury business partners, for example. 

The new method of generating payment files is via the Advanced Payment Management (SAP APM) module. SAP APM is a module that facilitates the concepts of centralizing payments for your whole group in a so-called payment factory. APM is a module that’s only available in S/4 and is pushed by SAP AG as the new way of implementing payment factories. 

Here it is a matter of linking the new output format to your applicable scenario or ‘payment route’.  

BANK STATEMENTS 

Classical MT940 bank statements are read by SAP using ABAP logic. The code interprets the information that is stored in the file and saves parts of it to internal database tables. The stored internal data is then interpreted a second time to determine how the posting and clearing of open items will take place. 

Processing of CAMT.053 works a bit differently, interpreting the data from the file by a so-called XSLT transformation. This XSLT transformation is a configurable mapping where a CAMT.053 field maps into an internal database table field. SAP has a standard XSLT transformation package that is fairly capable for most use cases. However, certain pieces of useful information in the CAMT.053 may be ignored by SAP. An adjustment to the XSLT transformation can be added to ensure the data is picked up and made available for further interpretation by the system. 

Another fact to be aware of is the difference in Bank Transaction Codes (BTC) between MT940 and CAMT.053. There could be a different level of granularity and the naming convention is different. BTC codes are the main differentiator in SAP to control posting logic.  

SAP Incoming File Mapping Engine (IFME) 

SAP has also put forward a module called Incoming File Mapping Engine (IFME). It serves the purpose as a ‘remapper’ of one output format to another output format. As an example, if your current payment method outputs an MT101, the remapper can take the pieces of information from the MT101 and save it in a pain.001 XML file.  

Although there may be some fringe scenarios for this solution, we do not recommend such an approach as MT101 is generally weaker in terms of data structure and content than XML. Mapping it into some other format will not solve the problems that MT101 has in general. It is much better to directly generate the appropriate format from the internal SAP data directly to ensure maximum richness and structure. However, this should be considered as a last resort or if the solution is temporary.