SWIFT (Society for Worldwide Interbank Financial Telecommunications) was formed in 1973 and is a company whose services are used in 208 countries. Financial institutions use the system to send payment messages between one another and to and from the payment system infrastructure. Most of the messages are sent within Europe, but the system is used by financial institutions throughout the world. Over time SWIFT has become increasingly important to the financial sector. In 2007 the system was used by more than 8,000 institutions and over 13 million SWIFT messages were sent every day.
As SWIFT has created a message standard for financial institutions, it has also made it easier to produce Straight Through Processing (STP) solutions. STP is a format that involves a number of conditions. If all of the conditions are met, then for instance a payment from a customer in one bank can be sent electronically from the bank, via the Riksbank’s RIX central payment system, to a recipient at another bank without any manual intervention. This has improved the efficiency of payment administration.
To be able to easily identify financial institutions, SWIFT has given them a code, BIC (Bank Identification Code) which is now a universal standard. SWIFT regularly updates its register of these institutions.
The Riksbank and SWIFT
SWIFT implements a large part of the world’s payment messages, which means that the company is supervised by the Group of Ten countries’ central banks, including the Riksbank. The Belgian central bank has the main responsibility for this surveillance, as SWIFT's head office is situated in La Hulpe in Belgium.
Follow the link below to read more about SWIFT.