What is SWIFT?

SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a global network that ensures the transmission of financial transaction data between banks and financial institutions.  

It utilizes its SWIFTNet for communications services, software, and infrastructure, but it does not hold funds, manage accounts, or finalize transactions. 

Here is an overview of SWIFT: 

• Date: Launched in 1973 in Brussels by 239 banks from 15 countries. 
• 목적: Creaed to replace the Telex system, which was slow and error-prone. 
• 성장: Increased through the 1980s to include broker-dealers, exchanges, and clearing organizations.
• Today: Essential to global finance, connecting more than 11,000 institutions in over 200 countries.

SWIFT is popular because:

• 규모: The global reach of this financial messaging network is extensive.k 
• Security: Robust standards and trusted infrastructure 
• Standardization: Universal, reliable message formats 
• 혁신: New message types and reporting utilities
• Network effect: Widespread adoption ensures stickiness and trust

Here is the three-step process of how SWIFT works: 

1. Each institution receives a BIC (SWIFT code) identifying its name, country, city, and branch 
2. Banks send standardized messages (payment orders, securities transactions, etc.) via SWIFTNet  
3. SWIFT itself does not move money — transfers are executed by correspondent banks

Here are some facts about SWIFT/BIC Codes: 

• unique identifiers for banks and financial institutions 
• format: 8–11 characters (bank code + country code + location code + branch code)  
• used for international wire transfers and SEPA payments  
• ensure accurate routing of cross-border payments

Typically, SWIFT transfers take 1–5 business days. However, on average, they last ~18 hours, with ~66% arriving within one day 

Delays may occur due to: 

• intermediary banks 
• destination country and time zones 
• anti-fraud and compliance checks

Alternatives to SWIFT seek to offer services with varied processing speeds, costs, or regional focus.: 

• Ripple (XRP Ledger): Blockchain-based, near real-time payments 
• SEPA: Quick, low-cost transfers within Europe 
• National systems: e.g., Fedwire (U.S.), CIPS (China)

SWIFT enforces strict security standards through its Customer Security Controls Framework (CSCF). 

Key measures include: 

• restricted internet access 
• multi-factor authentication 
• least-privilege access 
• 암호화 and continuous monitoring 
• incident response protocols 
• EU financial regulations

These measures relate to the confidentiality, integrity, and availability of global financial messages.