What is MT940?

MT940 is a standardized SWIFT message format used by banks worldwide to transmit end-of-day account statements. This format is crucial for businesses and financial institutions that need to process and reconcile bank statements automatically.

The MT940 format is part of the SWIFT (Society for Worldwide Interbank Financial Telecommunication) messaging system, which ensures consistent communication between financial institutions globally.

Key Components of MT940

The MT940 format consists of several structured fields, each serving a specific purpose in representing bank statement data:

Transaction Reference (Tag :20:) — A unique identifier for the message
Account Identification (Tag :25:) — The account number to which the statement relates
Statement Number (Tag :28C:) — Sequentially number of the statement
Opening Balance (Tag :60F:) — The starting balance for the statement period
Transaction Details (Tag :61:) — Individual transaction information including date, amount, and type
Transaction Description (Tag :86:) — Detailed description of the transaction
Closing Balance (Tag :62F:) — The final balance after all transactions

Understanding Transaction Fields

The transaction details (Tag :61:) contain several important elements:

Value Date: When the transaction affects the account balance
Entry Date: When the transaction was recorded
Debit/Credit Mark: Whether money was added or removed
Amount: The transaction value
Transaction Type: A code indicating the type of operation
Reference: Customer and bank reference information

Common Challenges

While working with MT940 files, users often encounter several challenges:

Complex structure requiring precise parsing
Variations in implementation between banks
Different character encodings
Handling multi-line transaction descriptions
Dealing with different date formats

"Understanding both MT940 and modern formats is crucial for today's financial operations."

Key Takeaways

MT940 is essential for banking communications
Validate the file structure before processing
Handle different character encodings properly
Implement robust error handling
Keep track of statement sequence numbers
Verify opening and closing balances