Microsoft and SWIFT are working together to bring cloud native payment solutions to Azure

Microsoft and SWIFT announced a cloud native proof of concept (POC) to host SWIFT infrastructure and enable cloud native payment transfers on Microsoft Azure. Together, the two companies are working to facilitate the future deployment of SWIFT messaging solutions in the cloud, enabling faster, more efficient and secure operations for banks, corporates, service bureaus, and other payments ecosystem players.

SWIFT is the world’s leading provider of secure financial messaging services used and trusted by more than 11,000 financial institutions in more than 200 countries and territories. Today, enterprises and banks conduct these transactions by sending payment messages over the highly secure SWIFT network, leveraging on-premises installations of SWIFT technology. The proof of concept creates a bank-like wire transfer experience with the added operational, security and intelligence benefits the Microsoft Cloud offers.

“This is a big step forward in demonstrating the potential of the cloud in improving back-office operational efficiency. SWIFT continually seeks to reduce and remove friction and eliminate operational inefficiencies within the financial services payment ecosystem,” said Arnaud Boulnois, head of customer platforms at SWIFT. “Cloud adoption continues to increase within the financial services industry, and we are thrilled to partner with Microsoft to bring the benefits of the cloud to SWIFT customers and ecosystem partners via Microsoft Azure.”

For financial institutions security, compliance and trust are paramount to address the ever-increasing hostile threat landscape. „With more than $1 billion USD invested in security per year, an industry leading cloud footprint and a robust regulatory compliance portfolio, Azure is an ideal fit for SWIFT as its trusted pioneer cloud partner.”, Microsoft said.

Microsoft’s own treasury department is serving as the initial user for the proof of concept. The Microsoft Treasury group manages over $150 billion in assets and supports over $400 billion per year in SWIFT based payments that support operations in over 190 countries and provide just-in-time cash management on a global basis.

The Microsoft and SWIFT teams are excited about what the future holds for this proof of concept. Beyond the immediate operational and security benefits realized by moving the service to the cloud, there is significant potential to add additional business logic, advanced analytics, and AI capabilities to further improve how banks and corporates conduct transfers and identify trends and insights.

“I think this is a significant step forward for the payments industry. This provides increased business agility, security, compliance and performant system for any business team,” said George Zinn, CVP and Microsoft Treasurer.

So how does it work?
Microsoft Treasury sends a wire instruction through SAP on Azure which gets validated using machine learning algorithms. Once validated for authenticity, these wires are then sent to SWIFT via Microsoft’s SWIFT installation on the cloud. SWIFT validates the wire instructions and sends it off to the appropriate bank. Once the bank completes the wire instruction it sends confirmation over to Microsoft.

“The joint deep engineering engagement between SWIFT and Microsoft has delivered a more secure and compliant cloud services that will benefit the industry as a whole,” said Ulrich Homann, distinguished Architect at Microsoft. “In the future ecosystem of open banking and instant payments, we believe this partnership with SWIFT will enable our combined corporate customers to benefit from the agility, performance and high availability features only made possible by the Azure cloud.”

Microsoft and SWIFT have completed the first Azure cloud native payment already. We intend to be able to deliver in private preview to our joint customers in the near future and therefore make the dream of CSP compliant cloud native payments a reality for the market at large.