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The (MT940) Bank Statement Conversion Challenge

January 25, 2016 Lisa Perales 0 Comments

What is an MT940?
 An MT940 is a standard structured SWIFT Customer Statement message and it is the European standard for transferring financial transactions. In short, it is a standard electronic bank account statement which has been developed by SWIFT. It is an end of day statement file which details all entries booked to an account.

What is the challenge?
In the pre-Single Euro Payments Area (SEPA) euro payment market, dozens of different data formats were in place to process payments across different national and European clearing systems in the European Union (EU). By implementing SEPA, European payments should been standardized. There are common standards and faster settlements that improve cash flow, reduce costs and facilitate access to new markets. However, although common standards have been created, content of statement files still vary between banks and/or channels.

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Every bank is able to send the same type of bank statements (such as MT940, MT942 or CAMT053), however, the content of these statement files differ per bank. The content of a statement file like MT940 sent by bank A varies from the content of a MT940 sent by bank B. These differences often leaves corporate customers in the dark. They receive different content per bank, while their ERP systems are not able to process all these different types of content. They need one content format in order to harmonize their payment and statement information.

The Challenge

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What is the effect of these different content formats?
Most corporates have multiple ERP or treasury related systems running in their organizations. These systems depend on the input that is sent by the bank. In order to automatically reconcile these files, every piece of data needs to be on a specific place. If not, corporates:

  • Won’t have the information in the right format and at the right time.
    Since corporates are highly dependent on the information they receive from their bank, getting this information in the right format and at the right time is very important.
  • Won’t have good cash visibility. Having good cash visibility is essential for efficient cash management.

Although the introduction of SEPA was meant to harmonize all payment and statement files, this is not (yet) the case. Many corporates still deal with this bank statement conversion challenge every day and need a centralized solution to reconcile their statement files.

A corporate should have this critical information such as bank statements available at any time, any place and anywhere, without manual interventions or manual changes in the files.  

If you’ve read the article this far, you might also want to read about how bank statements can be simply converted.
Find out in our blog on “The Bank Statement (MT940) conversion solution” below.

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