SWIFT and the Revolution it Brought

SWIFT is an acronym that is often bandied about in the world of financial transactions — but what exactly does it mean and how does it affect you?

SWIFT stands for the Society for Worldwide Interbank Financial Telecommunication.

SWIFT was founded in Brussels in 1973 under the leadership of its CEO, Carl Reuterskiöld, and was supported by 239 banks in fifteen countries. It started to establish common standards for financial transactions and a shared data processing system and worldwide communications network designed by Logica and developed by The Burroughs Corporation.

What is the SWIFT network?

Banks around the world needed a consistent and universal way to get money from one country to another. The SWIFT network became that answer for all the questions at once.

SWIFT provides a secure network that allows more than 10,000 financial institutions in 212 different countries to send and receive information about financial transactions to each other. Before the SWIFT network was put in place, banks and financial institutions relied on a system called TELEX to make money transfers. TELEX was slow, and the system lacked the security necessary for a time when technology was making rapid progress.

The Society of Worldwide Interbank Financial Telecommunication or SWIFT is a financial messaging system that runs on a network of tens of thousands of financial institutions from around the world.

The SWIFT system enables these institutions to securely send and receive information on financial transactions in a standardized way. This ultimately allows money to be sent from one bank to another, virtually anywhere in the world and in many different currencies.

But this system is far from perfect. SWIFT does not actually send money, it simply sends messages between the banks. Because of this, other systems that require more human intervention must be used to transfer the actual funds and this, in turn, makes SWIFT transfers slow.

What’s more, the complex nature of these transfers usually incurs a fee which nearly always gets passed on to consumers. This fee can reach for far more than $30, making this transfer one of the most expensive.

How does SWIFT system function?

On the consumer end, you can think of the SWIFT network a bit like travelling from one airport to another. It’s not always possible to take a direct flight. Which means you may need to travel from one city to another via several connecting flights. SWIFT works essentially the same way. Your money will travel from one country to another, but to do that there are often intermediary/correspondent banks involved.

The SWIFT network doesn’t actually transfer funds, but instead, it sends payment orders between institutions’ accounts, using SWIFT codes. It was SWIFT that standardised IBAN (International Bank Account Numbers) and BIC (Bank Identifier Codes) formats. SWIFT owns and administers the BIC system, meaning that it can quickly identify a bank and send a payment there securely.

What is the Revolution?

The majority of international interbank messages use the SWIFT network. As of 2018, SWIFT linked more than 11,000 financial institutions in more than 200 countries and territories, who were exchanging an average of over 15 million messages per day (compared to an average of 2.4 million daily messages in 1995). SWIFT transports financial messages in a highly secure way but does not hold accounts for its members and does not perform any form of clearing or settlement.

SWIFT does not facilitate funds transfer: rather, it sends payment orders, which must be settled by correspondent accounts that the institutions have with each other. Each financial institution, to exchange banking transactions, must have a banking relationship by either being a bank or affiliating itself with one (or more) so as to enjoy those particular business features.

For the year of its creation, SWIFT had been a steady working alternative for the individuals willing to rather not send their money directly but to utilize the bank-order system SWIFT has gladly offered. This led to massive amounts of money to flock finance platforms in the 80s, and henceforth people felt and acted way more freely with their finances.

SWIFT is comparatively good to work for in terms of remuneration, work-life balance, and the value it has for your resume.

Added to this, the company invests in employee development and the skills you acquire at SWIFT (if you choose to put in the effort) are great and make you even more employable. Great people in many departments too with a real feeling of global team.

However since 2018, the culture has changed drastically for the worse. The company is supposed to be not for profit cooperative, but a bloated commercial side, clueless marketing dep and very weak senior management is a toxic mix.

The Belgian company culture does fit well in the other global regions. Most good career paths only exist in Belgium as a company is very centralized.

SWIFT Disadvantages?

If you’re sending money through SWIFT, it can be quite pricey, especially for smaller amounts of money. And, as noted, if your SWIFT transaction will need to go through intermediary banks, each of them normally will levy their own fee. Though most banks will give you the ability to choose whether you, the recipient or a combination of both foot the bill for these additional fees, the costs can still add up.

On top of that, if your money will need to be exchanged for another currency, banks can add their own spread (profit) to the rate they offer you. A further cost.


SWIFT is just one of the organisations and systems that have changed modern banking forever, freed the market from geopolitical shackles and made people think before doing any money transfer.