SWIFT System

The Society for Worldwide Interbank Financial Telecommunications (SWIFT) system is a digital messaging service alternative to telegraphic transfers and bank wires, which financial institutions across the world use to communicate critical information and transact.

SWIFT enables treasuries, brokerages, automated clearing houses, exchanges, depository institutions, banks, and other financial organizations to communicate securely with one another.

History of The Swift System

The SWIFT system was developed in 1973 to facilitate transactions between connected financial organizations. Each organization that uses SWIFT receives a unique identifying code, or SWIFT ID, which serves as a thinly veiled pseudonym. SWIFT stores and records those codes to track the movement of capital amongst financial institutions.

SWIFT ID

The SWIFT system assigns a SWIFT ID to each organization that corresponds with the institution’s name, country of origin, and geographic location.

The first four characters of a SWIFT ID are an abbreviation for the institution’s name. The next four characters designate the country and city in which the organization is located. Finally, three additional characters may apply if the financial institution is a branch or department of another larger organization.

The SWIFT system is a scalable upgrade to outdated intra-bank communication technologies. Today, the SWIFT system supports a majority of international transactional messages, largely supplanting bank wires and telegraphic transfers.