What Is SWIFT in Banking?

A banker and a customer sit in a bank with a desk between them.

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SWIFT (Society for Worldwide Interbank Financial Telecommunications) is an international system that allows member banks to transfer money across borders safely and efficiently. The SWIFT system makes it easy for people to do business around the world with the assurance that funds can be transferred to pay for goods and services.

Definition and Example of SWIFT

SWIFT is an electronic communications network that makes it easy for a bank customer in one country to send money to a customer of another bank in a different country. It was founded in 1973 to simplify international financial transactions. The system went live in 1977 with 518 institutions in 22 countries participating. It now has more than 11,000 member institutions in over 200 nations and territories, so almost all international banking requires SWIFT.


As of March 2022, SWIFT was averaging 46.2 million messages per day.

Thanks to SWIFT, a freelance writer in Chicago can get paid by a client in London, an American retiring in Mexico can buy a house in San Miguel de Allende, and a multinational corporation can transfer money from headquarters to local operations. Individuals, businesses, banks, and governments rely on SWIFT to get things done. The focus has always been on speed and security.

SWIFT is owned by its member banks and led by the National Bank of Belgium, the country where SWIFT is headquartered. The G-10 central banks (Belgium, Canada, France, Germany, Italy, Japan, The Netherlands, United Kingdom, United States, Switzerland, and Sweden) along with the European Central Bank provide oversight. The involvement of so many nations means that if one is cut off from SWIFT, it will be difficult for its citizens to engage in international trade.

How SWIFT Works 

At its heart, SWIFT in banking is a messaging system. When someone wants to send money overseas, they start the transaction at their own bank, which then notifies the recipient’s bank that the transaction is taking place. These messages are called FINs. After that, the money is transferred electronically, either directly or through another bank.The money is sent by wire transfer


Most banks charge for sending and receiving wire transfers, so a SWIFT transfer will carry the same price.

Each participating bank has a business identifier code, also known as a BIC code or a SWIFT code. Each bank on the network has at least one, and customers need it to make a transaction over the network. Banks that are not part of SWIFT usually have a relationship with a larger bank that is a SWIFT member, known as a correspondent bank, so almost anyone who needs to send money to someone in another country can do so through their current bank—even if it has only one branch in a small town.

SWIFT is a major part of the world economy. The network’s record for a single day of activity is 50.3 million FINs, sent on November 30, 2021. Traffic tends to be high at the end of every month as people look to pay invoices, settle accounts, and close the books. If any money has to cross borders to do this, SWIFT comes into play.

To send funds via SWIFT, you must give the following information to your bank:

  • Recipient’s name
  • Recipient’s account number
  • Recipient’s bank routing information and SWIFT number
  • The amount and currency to be used for the transfer
  • Recipient’s mailing address including city, region, country, and postal zip code

One of SWIFT’s functions in banking is to prevent money laundering. Tying banks around the globe to a central network makes it more difficult for folks to evade taxes or deposit ill-gotten gains. 

Alternatives to SWIFT

Over the years, many competitors to SWIFT have emerged. Some, such as the financial messaging system of the Bank of Russia, are designed to evade sanctions and take power away from the central banks that oversee SWIFT. Others are designed to reduce the costs of transfers and simplify the process. 

Most nations have systems for transferring money within their borders that do not rely on SWIFT. Within the United States, money can be transferred by ACH or any of the other organizations that the Federal Reserve Bank regulates as designated financial market utilities. Customers can also use private money networks, such as Xoom or PayPal, to transfer money within and between some countries.

Key Takeaways

  • In banking, the SWIFT network allows people to send money across international borders through 11,000 member banks.
  • It is the primary international financial network, operating in 200 countries. However, some countries are developing alternatives.
  • SWIFT transactions are wire transfers, and banks charge their customers for them. 
  • Nations that are cut off from SWIFT have a difficult time participating in the global economy.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. SWIFT. “SWIFT History.”

  2. SWIFT “Traffic Highlights.”

  3. SWIFT. “FIN Traffic and Figures.”

  4. SWIFT. “SWIFT and Sanctions: How Is SWIFT Governed?

  5. SWIFT. “The Payments Process Explained.”

  6. SWIFT. “Business Identifier Code (BIC).”

  7. Association of Certified Sanctions Specialists. “Sanctioned Nations Explore Bypassing SWIFT."

  8. Board of Governors for the Federal Reserve System. “Designated Financial Market Utilities.”

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