What Does SWIFT Stand For?

SWIFT is an acronym for the “Society for Worldwide Interbank Financial Telecommunication.” Founded in 1973, it currently has over two thousand employees, and it is involved in financial telecommunications. SWIFT began in Brussels, Belgium, connecting fifteen different countries.

SWIFT is in charge of a financial messaging network. This network connects banks throughout the world, and also connections other types of financial companies and institutes with the banks and with other financial companies.

As of 2008, SWIFT was responsible for linking over eight thousand five hundred financial institutions and banks. The financial institutions that SWIFT linked were in over two hundred countries. SWIFT is known for its security in the messages that it transports. Importantly, the members of SWIFT do not have accounts with the organization, and SWIFT does not perform any type of clearing or any type of settlement for its members. 

SWIFT Organization

As of 2010, SWIFT is owned by the financial institutions for which it transports the messages. Legally, the Belgium government considers SWIFT a “cooperative society.” A cooperative society is a type of business organization. This organization is controlled by a group that uses the organization for their mutual success and advantage.

Internationally, the definition of a cooperative is defined by the International Co-operative Alliance’s Statement on the Co-operative Identity. Under this definition, SWIFT is considered an autonomous organization controlled by the individuals who use its services.

SWIFT Locations

The headquarters of SWIFT are located in Brussels, in Belgium. The messages network of SWIFT is run out of three different redundant data centers. One of the data centers is located in the Netherlands. The other two data centers are located in the United States and in Switzerland. The Switzerland data center is the newest among the three centers.

The reason that there are three data centers is a precautionary measure. If one center fails, either one of the other data centers is equipped to process the traffic, messages, and information of the entire SWIFT network.

The messages are segregated between the different data centers. As of 2010, the Trans-Atlantic Zone messages are stored in the United States data center. The European Zone messages are stored in the Netherlands data center, and partially in the Switzerland center. For any countries outside of Europe, the messages are stored in the American center. However, if the countries wish, they can request that their messages are stored in the European centers.

SWIFT's Services

As of 2010, SWIFT offers services in four different areas that are crucial in the financial world. These four areas are:

• Securities
• Treasury and Derivatives
• Cash Management
• Trade Services

Under each of these four areas, SWIFT offers specified services for these areas. For example, in cash management, SWIFT offers the following services: SWIFTNet Bulk Payments, SWIFTNet Cash Reporting, and SWIFTNet Exceptions and Investigations. These services are specific to the cash management area of the cooperative.

Outside of these financial areas, SWIFT also offers a person-to-person messaging service for its members. This messaging service launched in 2007, and it the service is guaranteed to have the same security as any of the SWIFT services. This service is called the SWIFTNet Mail. Members send messages to other members using the SWIFTNet Network, rather than sending a messaging using e-mail.

When the service began, eight major banks, including HSBC, FirstRand Bank, Nedbank, and Standard Bank of South Africa, instantly began using it.