Society for Worldwide Interbank Financial Telecommunication

From Open Risk Manual
(Redirected from SWIFT)


Society for Worldwide Interbank Financial Telecommunication (SWIFT) is a cooperative utility whose objective is to develop standardized messaging and processing of transaction services for financial institutions globally, making global cross-border transfers easier.

Swift is the network backbone of the international finance industry. It serves more than 200 countries and territories. Swift payments are a type of international transfer sent via the Swift network. Swift does not facilitate the transfer of funds. Instead, it sends payment orders via its secure and reliable network, which must be then settled by the correspondent accounts that institutions have with each other. When sending or receiving international payments, a Swift code is used to identify a specific bank.

List of Standards

  • Category 1 - Customer Payments & Cheques (MT100 - MT199)
  • Category 2 - Financial Insitution Transfers (MT200 - MT299)
  • Category 3 - Treasury Markets Foreign Exchange, Money Markets & Derivatives (MT300 - MT399)
  • Category 4 - Collections & Cash Letters
  • Category 5 - Securities Markets (MT500 - MT599)
  • Category 6 - Treasury Markets Precious Metals / Syndications (MT600 - MT699)
  • Category 7 - Documetary Credits & Guarantees (MT700 - MT799)
  • Category 8 - Travellers Cheques (MT800 - MT899)
  • Category 9 - Cash Management & Customer Status (MT900 - MT999)
  • Category n - Common Group Messages (MTn90 - MTn99)

Issues and Challenges

  • Following the terrorist attacks of 11 September 2001, the United States Department of the Treasury served administrative subpoenas requiring SWIFT to transfer personal data held on its United States server in order to identify, track and pursue those who provide financial support for terrorist activity. After press reports revealed this transfer of personal data, involving also banking data of European citizens, European data protection authorities found several breaches to the fundamental data protection principles, in particular relating to transfers of personal data to third countries (see Article 29 WP opinion 10/2006). Also, the EDPS adopted an opinion focusing on the role of the European Central Bank (see EDPS opinion). Following these findings, many improvements were put in place in order to ensure full compliance with data protection legislation: SWIFT adhered to the Safe Harbor; the US Treasury provided clarifications and assurances concerning access and processing of SWIFT data; SWIFT announced important changes in the architecture of its payment services, ensuring that intra-European messages remain in Europe and are no longer mirrored in the United States.