How secure is SWIFT? Does it verify message sent are real?
SWIFT has 518 member banks from 22 countries – and back in 2016, it reported daily message volumes on SWIFT exceeding 25 million. Today, the network now handles over 6 billion messages a year.
Overall, SWIFT is a highly secure payment network that has been used for over four decades. It is estimated that almost half of all cross-border payments globally use the SWIFT network. However, the important thing to remember is that SWIFT is just a method of communication that moves money from one account to another – it doesn’t actually handle the money. Banks take care of that part. So, the security risk generally comes from the financial provider and not from SWIFT.
Therefore, checking the reputation and security of a financial provider is crucial. That is why it is of paramount importance to check a financial provider is authorised by the Financial Conduct Authority (FCA).
When a financial institution is authorised by the FCA, it must keep all client funds in a safeguarded bank account used only for customer transactions. This ensures the safety of those funds. SWIFT is also overseen by the world’s largest central banks, including the US Federal Reserve, which is actively monitoring SWIFT’s response to cyber-attacks and asking the company to continuously report developments.
How did the SWIFT network evolve? I understand it only handles messaging rather than payments themselves – is this a deliberate architectural choice, or just a consequence of how the banking system evolved?
The SWIFT network evolved out of a vision to create a global financial messaging service. Founded in the 1970s, SWIFT continues to develop even today, while keeping the core of their original messaging service the same. SWIFT messaging standards have created seamless and automated data transmission across linguistic and system boundaries that have already enabled over 1.2 billion messages to be sent so far in 2022. Their continual development reflects the continual development of the banking system itself.
SWIFT’s messaging facilities, although founded in a pre-internet world, function as they do now due to the evolution of the banking system. To drive technological innovations, SWIFT promotes constant renewal in their product portfolio.
The birth of the internet, and the technological change as a result, caused SWIFT to also focus on security to ensure continued reliability to users. Their vision of an evolving service that retains continuity stimulates reinvestment in their core infrastructure, to create a service as relevant today as it was at its inception.
The evolution of the banking system has never resulted in the development of a payment system within SWIFT. However, their product continues to change concerning banking evolution. Their goals and purpose are unfaltering and clear: to enable no-risk financial messaging.
Uma Rajagopal has been managing the posting of content for multiple platforms since 2021, including Global Banking & Finance Review, Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune. Her role ensures that content is published accurately and efficiently across these diverse publications.