Message brokers

Introduction to message brokers

In the context of bank connectivity, a message broker is middleware that acts as an intermediary between a company's internal systems – such as its ERP or treasury management system (TMS) – and its banking partners. Its role is to receive financial messages from one system, translate or reformat them if necessary, and deliver them reliably to the intended destination.

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Message brokers are typically found in larger or more complex IT environments where multiple internal systems need to exchange data with multiple banks. They are particularly common alongside host-to-host or SWIFT connections in companies that manage a high volume of financial messages across different formats and protocols.

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For a broader overview of connectivity methods, see our full guide to bank connectivity.

How message brokers work

A message broker receives messages from a sending application, stores them temporarily in a queue, and forwards them to the receiving application based on predefined routing rules. In a corporate banking environment, this typically involves:

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1. Message creation: A company's ERP or TMS generates a financial message, such as a payment file in ISO 20022 or MT940 format.
2. Queuing and transformation: The broker receives the message and places it in a queue. It may validate the format and convert it into a format accepted by the receiving bank.
3. Routing: Based on configured rules, the broker routes the message to the correct bank – for example, directing a SEPA payment instruction to one bank and a domestic salary payment to another.
4. Delivery: The message is delivered to the bank's system. The broker tracks delivery status and can retry failed transmissions automatically.

Common use cases include routing payment files from an ERP to the correct bank, translating between message formats such as SWIFT MT and ISO 20022, queuing instructions during bank maintenance windows, and consolidating inbound bank statements for reconciliation. Well-known message broker products in financial services include IBM MQ, RabbitMQ, Apache ActiveMQ, and TIBCO EMS.

Pros and cons of message brokers

• Pros: Message brokers provide reliable message delivery with built-in queuing and retry mechanisms, reducing the risk of lost or duplicated financial data. They decouple systems, meaning changes to one system do not necessarily require changes to the bank connection. They also support message transformation and routing across multiple banks and formats.

• Cons: Deploying and maintaining a message broker requires dedicated technical expertise and infrastructure, adding to cost and complexity. If not properly configured, brokers can introduce latency or become a single point of failure. For companies with straightforward banking needs, a message broker may be more infrastructure than is necessary.

How Atlar removes the need for message brokers

Atlar eliminates the need for companies to deploy and maintain their own message broker infrastructure. The platform handles all message routing, format translation, and delivery natively, connecting directly to banks using SFTP, EBICS, SWIFT, and real-time APIs on behalf of its customers.

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With prebuilt connections to over sixty major banks globally, Atlar manages the entire implementation from onboarding to go-live, with no work required from the customer's IT team. Atlar customers are up and running with all their banks connected in 2–3 months on average, compared to 6–18 months for a traditional TMS. To learn more, get in touch with our team.