What is SWIFT?

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S.W.I.F.T. stands for the “Society for Worldwide Interbank Financial Telecommunication”. The main offices are located in Belgium and the members are made up of bank from many different countries. Banks use S.W.I.F.T. services mainly for payment transactions and the processing of securities transactions. S.W.I.F.T. regulates the messages that are exchanged between financial institutions. Those involved in the message transmissions are banks, asset managers, brokers and national and international central securities depositories.

How it works?

The following example explains how S.W.I.F.T. works:

The customer authorizes the bank to send funds to a relative in another country, the bank enters an order in an electronic form also known as a SWIFT message, provided by SWIFT. The bank debits the funds from the customer`s account and sends the SWIFT message by SWIFT to the relative`s bank abroad. The encrypted SWIFT message informs the relative`s bank that there is a transfer order and that the funds should be debited from the account of the customer`s bank with the receiving bank and credited to the relative. It is important to keep in mind that SWIFT only exchanges encrypted messages; no funds are exchanged via SWIFT.

S.W.I.F.T. also operates two computer centers for data processing in the United States and the Netherlands. At these centers, the messages within the S.W.I.F.T. network are encrypted, verified to make sure that they have the correct structure, stored and checked for changes. The information is processed in one computer and saved in the other as a backup. The maximum storage period at S.W.I.F.T. is 124 days. During that period, messages are saved at bothe computer centers and after this period, the messages are deleted from all databases at all locations.

For the processing of local and international payments, information about the ordering customer is disclosed to banks and operators in Switzerland and abroad. This information is necessary to comply with the provisions established in the battle against money laundering and terrorism financing. The information that is disclosed includes the customer`s name, address, account number or ID number, date of birth and place of birth. If the payment transaction is local, the only information required is the customer`s ID number or account number.

For local payments in foreign currencies, information on the person issuing the order is also disclosed to banks and operators abroad.