Choosing Between SWIFT and FIX for Financial Messaging
Summary
The document distinguishes SWIFT and FIX by their structure and common roles. SWIFT is described as an organization operating a network that uses ISO messaging standards, while FIX is a non-proprietary set of messaging standards that does not prescribe its own transport network. The two can overlap, and efforts have been made to align them.
The choice is framed around transport needs and the specific messaging task. SWIFT may suit centralized delivery requirements, while FIX is commonly used for order entry, including submitting, amending, and canceling orders, and can also carry market data in some settings. The discussion does not establish a strict division between protocols or provide a comprehensive comparison of cost, coverage, or settlement use. Some claims in the responses are brief and unsupported, so the document is best treated as an introductory distinction rather than a definitive protocol guide.
Key ideas
- SWIFT is presented as a network operator using ISO messaging standards, while FIX defines messages without specifying a network.
- The protocols overlap, and work has been done to align their standards.
- Transport requirements can influence the choice between them.
- FIX is commonly used for order entry, including order submission, amendment, and cancellation.
- The document gives only a broad comparison and does not settle every use case.
Tags
Full text
# When should we use SWIFT versus FIX? # When should we use SWIFT versus FIX? I've read documents that claim that SWIFT and FIX are not competing protocols for financial transactions and messaging. And yet, I have not come across a clear articulation of when to use SWIFT versus FIX. For example, I know that FIX can be used for most trading activities, e.g. getting a quote, placing an order, canceling an order, getting settlement instructions, managing positions, etc. And I was under the impression that SWIFT is primary for accomplishing electronic wire transfers of money between financial institutions, e.g. as part of the trade settlement process. However, now I'm told that SWIFT can also be used to handle rolls and closeouts. Am I right in thinking that there's a significant overlap in terms of the domains covered by the two protocols? Would anyone care to take a crack at clarifying? ## Answer by G__ (score 4) https://quant.stackexchange.com/a/1299 SWIFT is actually not a standard per se; rather, it's an organization that operates a proprietary exchange network that utilizes a set of ISO messaging standards. FIX is a non-proprietary set of messaging standards with no underlying network specified. There is certainly overlap between the two, and there has been work to co-align these standards. I would say the choice between them would be made more on the transport requirements (e.g. SWIFT for a centralized guaranteed delivery) and on the fringes where they don't overlap. A couple salient threads from the FIX website: - http://www.fixprotocol.org/discuss/read/46f5a06f - http://www.fixprotocol.org/discuss/read/53a3fa9b ## Answer by Ted Graham (score 1) https://quant.stackexchange.com/a/1301 FIX is frequently used for order entry traffic (new order, amend order, cancel order) and occasionally used for delivering market data when latency and performance are not critical. (FIX/FAST is quite different, that is an encoding that CME and others use to compress price feed information.) If you are entering orders (either to a broker or directly to an exchange), FIX is a good choice, and is often your only choice. ## Answer by Balachandran G (score -2) https://quant.stackexchange.com/a/25424 SWIFT messages are expensive where as FIX is totally free. ## Answer by Atul Agarawal (score -2) https://quant.stackexchange.com/a/25427 SWIFT are proprietary and easy to use for all the firms as 98%+ world wide coverage they have.
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