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What is Society for Worldwide Interbank Financial Telecommunication mean?
The Society for Worldwide Interbank Financial Telecommunication (SWIFT), legally S.W.I.F.T. SCRL, provides a network that enables financial institutions worldwide to send and receive information about financial transactions in a secure, standardized and reliable environment. SWIFT also sells software and services to financial institutions, much of it for use on the SWIFTNet network, and ISO 9362 Business Identifier Codes (BICs, previously Bank Identifier Codes), popularly known as "SWIFT codes".
As of 2018, around half of all high-value cross-border payments worldwide used the SWIFT network. As of 2015, SWIFT linked more than 11,000 financial institutions in more than 200 countries and territories, who were exchanging an average of over 32 million messages per day (compared to an average of 2.4 million daily messages in 1995). SWIFT transports financial messages in a highly secure way but does not hold accounts for its members and does not perform any form of clearing or settlement.
SWIFT does not facilitate funds transfer: rather, it sends payment orders, which must be settled by correspondent accounts that the institutions have with each other. Each financial institution, to exchange banking transactions, must have a banking relationship by either being a bank or affiliating itself with one (or more) so as to enjoy those particular business features.
SWIFT has been criticized for its inefficiency, with the Financial Times observing in 2018 that transfers frequently "pass through multiple banks before reaching their final destination, making them time-consuming, costly and lacking transparency on how much money will arrive at the other end". SWIFT has introduced its own improved service, called "Global Payments Innovation" (GPI), stating that as of 2018 it had been adopted by 165 banks, and was completing half of its payments in under 30 minutes.
SWIFT is a cooperative society under Belgian law owned by its member financial institutions with offices around the world. SWIFT's headquarters are in La Hulpe, Belgium, near Brussels. The main building was designed by Ricardo Bofill Taller de Arquitectura and completed in 1989. The chairman of SWIFT is Yawar Shah, originally from Pakistan, and its CEO, since July 2019, is Javier Pérez-Tasso, originally from Spain. SWIFT hosts an annual conference, called Sibos, specifically aimed at the financial services industry.
SWIFT has at various times attracted controversy for enabling the US government to monitor and in some cases interfere with intra-European transactions. (See: U.S. government involvement.)
referencePosted on 17 Oct 2024, this text provides information on Miscellaneous in Banking related to Banking. Please note that while accuracy is prioritized, the data presented might not be entirely correct or up-to-date. This information is offered for general knowledge and informational purposes only, and should not be considered as a substitute for professional advice.
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