SWIFT launches instant AML & fraud check service, enabling round-the-clock validation

SWIFT pre-validation payments

Global payments regulator SWIFT has unveiled a new API-based payments pre-validation service, enabling partner institutions to perform round-the-clock fraud and anti-money laundering (AML) checks on cross-border payments before they are sent.

Visible at the customer-end, the pre-validation service enables customers to correct any data anomalies or potential fraud/AML triggers (for instance, incorrect details on payments receiving customers or incorrect payments codes) before payments are sent.

By validating this data before payments are initiated, payments senders can greatly improve the prospects of a seamless, straight-through cross-border payments process, obviating the need for manual investigations by the receiving bank – one that can create substantial delays in the receipt of payments.

According to SWIFT, the service provides “complete, real-time visibility on the status of [customers’] payment information before they send it”.

“Mistakes can be fixed immediately, which not only resolves a large degree of errors and delays but is a clear step towards a payments future that is frictionless and borderless.”

Speaking with FST Media, Julie Bolan SWIFT’s head of payments for APAC, noted that by embedding the service in front-facing digital channels, banks can directly involve customers “in the experience of confirmation and validation”.

Customers, she added, can be automatically prompted – in the moment – to add missing fields or correct issues that may hold up payments at the receiving end.

She noted that when a payment is flagged by an anti-fraud or AML-CTF detection system (typically by the receiving bank), these transactions must undergo further due diligence checks, with manual investigation often required – a costly and time-consuming process.

This manual intervention is a “key point of friction” in the payments process, Bolan stressed, with banks only able to perform these checks during operating hours when staff are available.

“If we can get better data up front that is validated by the [sending] bank … then the receiving bank won’t have these fraud or money laundering checks happening on their side.”

Bolan notes that the current average cross-border payments processing time is around eight hours, “with most of that time spent with the beneficiary bank [performing]… compliance and validation checks.”

While the service is still in its early days, with on-the-ground performance data limited, she notes that by “reducing friction” for beneficiary banks, “our expectation is that the payment should be able to straight-through process into the end customer account as [quickly] as possible”.


Swift’s pre-validation service is fully API-enabled, facilitating a ready exchange of data between payments sending and beneficiary banks, as well as SWIFT’s vast historical payments data.

This means direct calls can be triggered between institutions to validate account and transaction data provided by the customer, “driving the API conversation between banks at the organisational level”.

A key component of the platform, according to Bolan, involves beneficiary validation checking – that is, “validating that the account is open and reachable”.

For some jurisdictions, particularly China, Bolan notes, validating that a sender name matches the account name is vital for efficient payments transfer.

Another core component of the service is “central validation”: using API calls to cross-check SWIFT’s centrally held data on, for instance, IBAN formats, purpose codes, or each jurisdiction’s payment validation formats.

Moreover, as Bolan notes, with SWIFT “growing our network adoption and reach on banks talking to each other from an API perspective”, the regulator has collected a vast repository of historical payments data, offering insight into payment patterns and, thus, payments irregularities.

“We’re trying to take an approach where we offer API services that connect banks together. While we’re growing that reach and adoption [by being] embedded in banks’ back-end channels and front-end channels, we offer that validation ourselves.”

While Bolan notes that a number of pre-validation services have spawned around the world, the key differentiator for SWIFT’s service is that it is based on a global standard.

“The more you can offer APIs and pre-validation, leveraging a global standard versus independent country formats, the better and the more reusable and scalable the outcome is, which ultimately supports a better industry outcome,” she said.