After processing thousands of SWIFT messages at IDFC FIRST Bank, I've noticed that many finance professionals treat SWIFT as a black box — they submit, it goes through, and they move on. Understanding the message types, however, makes you significantly faster and more accurate at resolving exceptions.

What is SWIFT?

SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a global network used by banks to send secure financial messages. The messages are standardized formats called MT (Message Type) codes.

MT103 — Customer Credit Transfer

The MT103 is the most common message type you'll encounter. It is used for single customer credit transfers — i.e., sending money from one individual or corporate account to another.

  • Contains full sender and receiver details including IBAN and BIC/SWIFT codes
  • Includes the amount, currency, value date, and purpose of payment
  • Used for inward and outward remittance processing
  • Must pass AML/compliance screening before execution
Pro tip: Always verify field 70 (Remittance Information) matches the invoice or agreement reference. Mismatches are the #1 cause of payment exceptions and investigation requests.

MT202 — Bank-to-Bank Transfer

The MT202 is used for interbank transfers — moving funds between financial institutions (not end customers). This is commonly used for Nostro account funding and correspondent banking settlements.

  • Does not contain beneficiary customer details
  • Triggers correspondent bank to credit the receiving bank's account
  • MT202 COV is used when it covers an underlying customer transfer (MT103)

MT940 — Customer Statement Message

The MT940 is a statement message sent by a bank to report all transactions on a Nostro account over a given period. This is essential for reconciliation work.

  • Used daily for Nostro account reconciliation
  • Each entry has a debit/credit indicator, value date, and transaction reference
  • Unmatched entries between the MT940 and internal records must be investigated promptly

Handling Investigations (MT199)

When a payment goes wrong — wrong amount, wrong beneficiary, delay — an MT199 free-format message is used to communicate between banks. Speed and precision in drafting these messages directly impacts customer satisfaction and regulatory compliance.

Key takeaway: The faster you identify whether an exception is a data issue, a correspondent bank delay, or a compliance hold, the faster you resolve it. Building a personal checklist for each message type is a habit worth developing early.