SWIFT - Banking Financial Messaging Service

<p>Do you transfer money online to your friends? You may have heard about the IFSC code if you are using banking to send money. If you are working in financial markets, more specifically in Investment banking Industry, one of the highly used terms you will come across is SWIFT . . What it is? why it's used and why it's important, let's find out !!</p><p>(SWIFT) Society for Worldwide Interbank Financial Telecommunication is a Belgium based secure financial messaging service which is used by over 11,000 banking and securities organizations in more than 200 countries across the world.</p><p>Before SWIFT came into place, TELEX was highly used for such services. But as markets developed, there was a need of the hour where a more safe, secured, and faster way to communicate was needed. To fulfill this, large banks got together and formed the base for the creation of SWIFT in 1973.</p><p>Basically in simpler terms, if you want to send a text message you need a person's mobile no, for sending an email you need an email id. If you had to send money in India before UPI like Google Pay, Paytm came into place, we always use to ask for the Account number, Account full name, and IFSC code. To conclude, to send anything you require unique details of the receiver where it should be delivered.</p><p>So SWIFT assigns each financial organization a unique code that has either 8 characters or 11 characters. These characters are used to identify the bank/institute name, country, location, and branch. First 4 for bank/institute name, next 2 for country code, next 2 for location, and last 3 for branches if there are multiple branches in that location. The last 3 characters are an optional lot of banks. If you are in India, you require an IFSC code of the bank which serves the same purpose that Swift does for international transactions.</p><p>Swift is used by a lot of institutions be it Banks, Exchanges, Fund Houses, Securities Dealer/brokers, etc. SWIFT is used to send Information related to Financial securities traded in the markets, Exchange of securities be it even Treasuries, trade matching all can be done by SWIFT. Highly used is payment swift for exchanging money in same and different currencies.</p><p>SWIFT has made some standardized format in which details should be transmitted to the other party and for every type of information you want to send across, there are separate SWIFT codes you need to be aware of.</p><p>Nostro/Vostro accounts are the Cash account each bank has with each other for debiting and crediting their respective bank accounts when funds transfer is done by their clients and depositors on their behalf.</p><p>SWIFT already has many competitors currently then too SWIFT has good market share however in future it has to develop itself due to avoid facing the same fate as TELEX . . .</p><p>&nbsp;</p>
KR Expert - Mustufa Petiwala

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