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SIA Taking STEP2 over SWIFT Network

Italian bank-owned venture leads Europe towards small-value retail payments network.

Since 1977, Italian banks have relied upon Societa Interbancaria per l'Automazione (SIA, rhymes with "see-ya") for technology services including financial messaging, payments and clearing systems. Now, as the economic integration of the European Union proceeds apace, Milan-based SIA has stepped up to ensure full financial messaging connectivity between Italy, Europe and the rest of the world.

The ability to help Italian banks adopt more quickly to changes occurring within the global banking infrastructure has been part of SIA's charter from the beginning. "Our goal is to provide banks with a common infrastructure to let them capitalize on what has been done, and reduce the cost of providing those services to the final users," says Mario De Lorenzo, an SIA spokesman.

Now, SIA has found areas of joint opportunity-and some competition-with the Society for Worldwide Interbank Financial Telecommunication (SWIFT, Brussels). That's because some of the messaging standards on SWIFTNet overlap with those available on SIANet. "We are in competition for certain areas and in cooperation for others," De Lorenzo says. "Italian banks use their own internal standards for exchanging messages."

Yet the two networks act mostly in partnership, as SWIFT has been able to take advantage of the SIA infrastructure. "Our physical network is used by SWIFT as a local Italian network within SWIFT's worldwide network," says De Lorenzo.

Next Steps

SIA also has been able to use SWIFT protocols for developing and launching new services, including the STEP2 project developed for the Euro Banking Association (EBA). The new service, which will process, clear and settle small-value retail payments from an EBA/SIA operations center located in Milan, will be accessible to banks in the European Union via SWIFTNet. SIA worked with IBM (Armonk, N.Y.) to develop the central system, and with Microsoft (Redmond, Wash.) for the software running at the end-user banks.

One of the major challenges of developing the STEP2 system was working with SWIFTNet file transfer protocols that were not yet finalized. "We started the implementation in 2002, but FileAct was not standard at that time," says De Lorenzo. "SWIFT delivered the final version to us as early adopters, in September" of last year.

Until the final FileAct protocol was released at the end of 2002, SIA had to manage the uncertainty of using a nascent protocol. "So you can imagine that we had to go farther with the implementation phase based on a product that was still in a beta status," De Lorenzo notes.

But as a result of its early adopter status, SIA has been able to accelerate the deployment of STEP2 to the benefit of all of its users-in Italy and beyond.

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