LeoGlossary: Society for Worldwide Interbank Financial Telecommunication (SWIFT)

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4 months ago - 2 minutes read

SWIFT is the messaging network that banks and other financial institutions use to send and receive information. This is behind most international money and security transfers.

It is a component of the global payment network where it acts a carrier with messages containing the payment instructions between financial institutions involved in a transaction.

SWIFT does not manage accounts, do any settlement or clearing, or hold any funds. All of this has to be done by other aspects of the payment system.

There are around 11,000 SWIFT institutions that sent roughly 42 million transactions per day.


SWIFT came into being in 1973 under Swedish CEO, Carl Reuterskiƶld. It is a cooperative society under Belgian law and is owned by its member financial institutions. It is headquartered in La Hulpe, Belgium.

Initially it was supported by 239 banks in 15 countries. This was established to replace the existing technology, Telex, which was the norm.

At that time, there was fear that the global financial flows could come under one entity. In this instance, First National City Bank (FNCB) of New York, which later became Citigroup, had set up a protocol that some were pushing.

SWIFT started to establish common standards for financial transactions and a shared data processing system and worldwide communications network designed by Logica and developed by the Burroughs Corporation. Fundamental operating procedures and rules for liability were established in 1975, and the first message was sent in 1977.

Data Centers

The network is comprised of 3 data centers sharing real time information. If one should go down, one of the others is able to handle all the communications for operation.

| | Location | Type | :-- | :--: | --: 1 | Zoeterwoude, Netherlands| OPC (Operating Centre) 2| Culpeper, Virginia, United States| OPC (Operating Centre) 3| Diessenhofen, Switzerland| OPC (Operating Centre) 4| Hong Kong| Command and control

Network Users


There are other options that provide similar services for payments. SWIFT goes above by also providing messages for a variety of different transaction. It can handle:

  • security transactions
  • treasury transactions
  • trade transactions
  • system transactions

While payments still make up a large share of the messages, more than half apply to security transactions. Payments account for less than 45%.


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