What is SWIFT?
The Full form of SWIFT is the Society for Worldwide Interbank Financial Telecommunication. SWIFT in banking terms allows financial institutions across the world to transfer information about cross-border financial transactions, in a safe and standardized manner. SWIFT is also known for selling software, and related services to financial institutions across the world. However, it is most commonly known for issuing Business Identifier Codes, or BICs (formerly called Bank Identifier Codes). These BICs are also called SWIFT codes and are the most popular product/service on offer by SWIFT.
Apart from learning the full form of SWIFT Codes, here are some other important facts about the Society for Worldwide Interbank Financial Telecommunication that are most often asked in Banking exams.
Who Uses SWIFT?
Over the years, SWIFT has expanded its coverage to a great extent. At present, SWIFT is used by the following to process the transactions.
- Securities Dealers
- Asset Management Companies
- Corporate Business Houses
- Foreign Exchange and Money Brokers
- Clearing Houses
- Treasury Market Participants and Service Providers
- Brokerage Institutes and Trading Houses
SWIFT Quick Facts
- Full form of SWIFT - Society for Worldwide Interbank Financial Telecommunication.
- SWIFT was established in the year 1973 and was established with the support of over 230 banks in 15 countries. It was established under the leadership of CEO Carl Reuterskiöld in Belgium.
- More than 50% of all cross-border transactions occur using the SWIFT network currently.
- Over 11,000 banking and financial institutions are connected to the SWIFT network, extending its support to over 200 countries and territories. On average, the SWIFT network is responsible for over 32 million messages a day. This number has grown from just over 2.4 million daily transactions in a day in 1995.
- Contrary to popular belief, SWIFT does not perform any clearing or settlement and does not hold accounts for any of its members. SWIFT is only responsible for transporting financial messages in a secure, standardized, and reliable manner.
- In order for a financial institution to exchange transactions across borders, the institution should either be partnered with or affiliated to a bank in connection to SWIFT to enjoy these benefits.
- SWIFT is not a company, but rather a cooperative society operating under the laws and regulations laid down by Belgium.
- SWIFT introduced an improved service called “Global Payments Innovation (GPI)” This feature has since been adopted by over 165 banks and enables them to complete payments across borders within 30 minutes.
- This GPI came in response to criticism by many popular institutions, including Financial Times that “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”.
What Services are Offered by SWIFT?
To facilitate the business and individuals, SWIFT offers an array of services to make the transactions easier.
- SWIFT offers a real-time instruction tally for forex and treasury transactions, security market infrastructure, and banking market infrastructure.
- SWIFT connections aim to provide services related to financial crime compliance. It offers Know Your Customer (KYC), Anti-Money Laundering (AML) and Sanctions.
- SWIFT has introduced reporting utilities and dashboards, which help the clients to receive a real-time view of tracking the activities, messages, reporting, and trade flow.
- Lastly, SWIFT aims to provide a reliable and secure network to enable a seamless movement of messages through various network connections and software technologies.
We hope this information was useful to you. Like the full form of SWIFT, you can learn from others our articles. This would be extremely beneficial for a banking exam.
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