SWIFT
Society for Worldwide Interbank Financial Telecommunication (SWIFT) is a global messaging network that allows financial institutions to securely communicate and execute international money transfers and other financial transactions. Operated as a cooperative owned by member banks, SWIFT provides standardized message formats and secure communication protocols to facilitate transfers, trade finance, securities transactions, and other banking operations worldwide.
Network architecture and features
- Secure messaging: encrypted communication between financial institutions
- Standardized message formats: ensure consistent information exchange
- Correspondent banking relationships: enable banks to serve customers in foreign markets
- Regional processing centers: improve speed and reliability
- Redundant communication paths: maintain system operation during outages or technical issues
SWIFT codes
- 8-character codes: bank code, country code, and location code
- 11-character codes: add branch identification
SWIFT maintains a global directory with automated validation to ensure accurate routing of international transactions.
Recent developments
- Global Payments Innovation (GPI): faster, more transparent international payments
- API integration: supports modern digital banking solutions
- Enhanced cybersecurity: protects against evolving threats
SWIFT faces growing competition from payment systems, domestic instant payment networks, and fintech solutions that bypass traditional correspondent banking relationships.