Definition of Society for Worldwide Interbank Financial Telecommunications (SWIFT)

Society for Worldwide Interbank Financial Telecommunications (SWIFT) is member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, SWIFT uses a standardized proprietary communications platform to facilitate the transmission of information about financial transactions. Financial institutions securely exchange this information, including payment instructions, among themselves.

Breaking Down Society for Worldwide Interbank Financial Telecommunications (SWIFT)

SWIFT neither holds funds on its own nor manages external client accounts. The cooperative began operating in 15 countries in 1973 and now operates in more than 200 countries, linking more than 11,000 financial institutions. The co-op delivered more than 5.6 billion messages in 2014—up from 10 million in 1979.

SWIFT is headquartered in Belgium and has offices in Australia, Austria, Brazil, China, France, Germany, Ghana, Hong Kong, India, Indonesia, Italy, Japan, Kenya, South Korea, Malaysia, Mexico, Russia, Singapore, South Africa, Spain, Sweden, Switzerland, UAE, and the United Kingdom.

Prior to SWIFT, the only reliable means of message confirmation for international funds transfer was Telex. However, a range of issues plagued Telex, including low speed, security concerns, and a free message format. SWIFT's unified system of codes to name banks and describe transactions was a welcome change.

Understanding SWIFT Transactions

For money transfers, SWIFT assigns each participating financial organization a unique code with either eight or eleven characters. The code has three interchangeable names: the bank identifier code (BIC), SWIFT code, SWIFT ID, or ISO 9362 code.

For example, the Italian bank UniCredit Banca, headquartered in Milan, has the eight-character SWIFT code UNCRITMM. The first four characters reflect the institute code (UNCR for UniCredit Banca), while the next two are the country code (IT for Italy), and the final characters specify the location/city code (MM for Milan). If an organization decides to use a code with 11 characters, the last three optional characters can reflect individual branches. For example, the UniCredit Banca branch in Milan uses the code UNCRITMMXXX.

Assume a customer of a T.D. Bank branch in Boston wants to send money to their friend who banks at the UniCredit Banca branch in Venice. The Bostonian can walk into their T.D. Bank branch with their friend's account number and UniCredit Banca Venice's unique SWIFT code. T.D. Bank will send a SWIFT message for a payment transfer to the specific UniCredit Banca branch via its secure network. Once UniCredit Banca receives the SWIFT message about the incoming payment, it will clear and credit the money to the their friend's account.


SWIFT and International Bank Account Numbers both come in handy when identifying parties in money transfers. However, while a SWIFT code is used to identify a specific bank, the IBAN code is used to identify an individual account involved in an international transaction.