If you are new to conducting international money transfers, chances are you've heard and wondered what could possibly be “the SWIFT network”. Here we are explaining the system so that you know what to expect from your next international money transfer. The Society for Worldwide Interbank Financial Telecommunication (Swift) is a global network connecting banks to communicate all sorts of information on financial transactions in a secure and standardized way.
So here is how it works! Swift assigns each bank with an eight- or 11-character long code, known as the bank identifier, quite similar to the IFSC code used for domestic interbank transfers. Swift code is generally used for international transactions. For example, if someone in Australia wants to send money to a person in Pakistan, they require the beneficiary’s bank account number and the Swift code of the destination bank. Via this Swift code, the Pakistan bank knows about the transfer and makes necessary arrangements for clearing the transaction.
How does a SWIFT code look?
ANZBAU3M - This is exactly how it looks! Let us compartmentalize the Swift code:
- The first four characters of the code denote the institute code, which is ANZB - Australia and New Zealand Banking Group.
- The next two characters stand for the country code, which is AU for Australia in this case.
- The next two characters stand for the location or the city code, which is 3M for Melbourne in this example.
SWIFT network is always in the process of expanding its horizon to different types of financial institutions such as:
- Securities Dealers
- Clearing Houses
- Corporate Business Houses
- Treasury Market Participants
- Foreign Exchange & Money Brokers
SWIFT offers many favourable services such as compliance services, business intelligence, connectivity etc. to businesses and individuals to facilitate accurate and seamless business transactions. SWIFT enables fast, predictable and cost-effective online money transfers across borders, direct from customers’ bank accounts.