SWIFT, officially S.W.I.F.T. SC, is a cooperative established in 1973 in Belgium (French: Société Coopérative), owned by banks and other member firms utilizing its services.
- SWIFT operates the primary messaging network facilitating international payments initiation. It also offers software and services primarily through its proprietary “SWIFTNet” and assigns ISO 9362 Business Identifier Codes (BICs), commonly known as “Swift codes”.
- As of 2018, approximately half of all high-value cross-border payments globally utilized the SWIFT network. By 2015, SWIFT interconnected more than 11,000 financial institutions across over 200 countries and territories, exchanging an average of over 32 million messages daily (compared to 2.4 million daily messages in 1995).
- SWIFT is headquartered in La Hulpe near Brussels and hosts an annual conference, Sibos, specifically tailored for the financial services industry.
The Establishment of SWIFT
Before the establishment of SWIFT, international financial transactions were conducted using the Telex system, which required manual writing and reading of messages in a public system. SWIFT was established due to concerns about the potential implications of a single private and fully American entity, previously First National City Bank (FNCB) of New York, later known as Citibank, controlling global financial flows. In response to FNCB’s dominance, its competitors in the US and Europe advocated for an alternative “messaging system that could replace the public providers and speed up the payment process”.
Founding of SWIFT
SWIFT was founded in Brussels on May 3, 1973, with key individuals such as bankers Jan Kraa (at AMRO Bank) and François Dentz (at the Banque de l’Union Parisienne) as well as Carl Reuterskiöld and Bessel Kok playing pivotal roles in its creation. Initially supported by 239 banks in 15 countries, SWIFT began to establish common standards for financial transactions and a shared data processing system and worldwide communications network.
Development and Expansion
Fundamental operating procedures and rules for liability were established in 1975, and the first message was ceremonially sent by Prince Albert of Belgium on May 9, 1977. SWIFT’s first non-European operations center was inaugurated by Governor John N. Dalton of Virginia in 1979. In 1989, SWIFT completed the construction of a significant new head office building in La Hulpe, designed by Ricardo Bofill Taller de Arquitectura.
Structure of SWIFT
SWIFT’s governance structure ensures that member institutions’ influence is proportionate to their transaction volumes, regardless of their geographic location. The board of directors, comprising 25 members, is elected by shareholders for three-year terms, with one-third of the board subject to renewal each year. All directors represent member institutions, and efforts are made to maintain geographical diversity within the board.
As of May 2024, the board includes representatives from prominent financial institutions such as JPMorgan Chase (chair), Lloyds Bank (deputy chair), Bank of China, BNP Paribas, BPCE, Citi, Clearstream, Commerzbank, Commonwealth Bank of Australia, Deutsche Bank, Euroclear, FirstRand, HSBC, ING, Intesa Sanpaolo, KBC, MUFG, NatWest, Nordea, Royal Bank of Canada, Santander, SEB, and UBS (with two representatives following the acquisition of Credit Suisse). Additionally, the Association of Banks in Singapore is also represented on the board.
SWIFT Data Centre and Operations
Data Centers
The SWIFT secure messaging network operates from three data centers located in the United States, the Netherlands, and Switzerland. These centers facilitate the near real-time sharing of information. In the event of a failure in one data center, another is capable of handling the network’s traffic. SWIFT utilizes submarine communications cables to transmit its data.
Distributed Architecture
Shortly after the inauguration of its third data center in Switzerland in 2009, SWIFT introduced a new distributed architecture featuring two messaging zones: European and Trans-Atlantic. This change meant that data from European SWIFT members no longer mirrored the U.S. data center. European zone messages are stored in the Netherlands and in part of the Swiss operating center, while Trans-Atlantic zone messages are stored in the United States and in another part of the Swiss operating center, segregated from the European zone messages. Countries outside of Europe were allocated to the Trans-Atlantic zone by default, but they had the option to choose to have their messages stored in the European zone.
| SN | SWIFT data centres | 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 |