Radianz and TransactPlus take on SWIFT

Alliance will leverage IP-based global extranet for financial messaging, but will the banks buy it?

Radianz, a global network spun out of Reuters, and TransactPlus, a provider of transactional messaging services, have announced an alliance to provide an alternative to the ubiquitous financial messaging structure provided by SWIFT.

The alliance will see TransactPlus messaging services, using technology developed at JPMorgan, offered over Radianz's Internet Protocol (IP)-based extranet, RadianzNet. TransactPlus will be able to provide financial institutions that are connected to RadianzNet, a comprehensive solution to a range of information delivery needs, ranging from near real-time transaction delivery to bulk file movement, disaster recovery and transaction risk management. Additionally, customers will receive end-to-end service level commitments at levels that are unattainable over the internet.

RadianzNet is the the world's largest Internet Protocol (IP)-based network for the global financial services industry, based largely on its Reuters heritage. Any institution with a Reuters terminal is connected to RadianzNet and also has access to a growing number of other services on that network. This includes TransactPlus' messaging service.

The Society for Worldwide Interbank Financial Telecommunication (SWIFT), a group owned by the world's leading banks, already offers banks guaranteed delivery over a dedicated messaging infrastructure. SWIFT is well-entrenched and industry owned, and will be difficult for new messaging initiatives to displace.

But Radianz and TransactPlus say that the current SWIFT system is outdated, running on an old X25 network, and doesn't have the benefits of an open network architecture. However, both messaging networks rely on a store-and-forward system to ensure message reliability and guaranteed delivery. Messages are received at intermediate routing points and recorded i.e., stored, and then transmitted, i.e., forwarded, to the next routing point or to the ultimate recipient.

SWIFT is currently migrating to a new IP-based network, SwiftNet, but this process is likely to take another three years to complete. Operation of that network has been outsourced to Radianz rival Global Crossing.

"The financial services industry has an increasing demand for secure, reliable, messaging services delivered over open IP networks," says Dushyant Shahrawat, an analyst at TowerGroup. "Financial extranets provide a part of this solution by seamlessly connecting financial institutions, their customers, and their trading partners to create a truly global financial community. Transactional messaging services provide another element of the solution by offering security and transactional guarantees."