What you know about SWIFT

What you know about SWIFT

SWIFT (Society for Worldwide Inter Bank Financial Telecommunication) is a in the automation of the global financial industry. Established in 1973, the bank owned co-operative has achieved its first mission to standardize and automate international payments messaging for the benefit of banks through the world.

Today, SWIFT is a strategic asset of the international banking community and its most financial system. Customers trust the SWIFT network to transmit over 680 million messages a year.

SWIFT is helping its members to prepare for the 21st century by facilitating the full automation and integration of all activities related to end financial transaction messaging and Processing. This will allow members to reduce risks further and improve thing competitive Position.

Head Office : Belgium
Other Offices : United States , Hongkong.

Customer Service Centres:
There is a three service centres such as
1) United States.
2) The Netherlands.
3) Asia Pacific.
These three centers are to be opened 24 hours. If one service centre is stop, automatically other service centre will receive the message. Customer does not feel any disturbance.

Historical Background:
In 1973, SWIFT was found by 239 banks in 15 countries to create a united international transaction processing and transmission system.

In 1977, The first message was sent SWIFT counted 513 member banks in 15 countries. In 1987, Membership expands to include financial institutions operating in securities
and Money markets.

In 1993, 100 country connected, 2 million messages received daily.
1999 Oct. 189 countries are involved and more than 4 million messages sent daily.

SWIFT Membership :
1) Members
2) Sub Members
3) Participants.

1) Members : Members banks are known as shareholders. Here share is high. Head office level are member. Total number of member is 2209.

2) Participants: Members owned at least 90% directly or 100% indirectly by a member are called sub-members. Sub Members share is lower. They are the branch office. Total number of sub- members are 2748.

3) Participants : Member of non bank financial institutions. These institutions called participants. They will not get any share and also do not have voting rights. They do not participate in the decision making process.

Participant Categories:
– Investment Management Institutions.
– Securities brokers & dealers.
– Central depository and clearing organization.
– Recognized Exchange House.
– Trust Service Providers.
– Subsidiary providers of custody.
– Registers & transfer Agent.
– Money brokers.
– Issuance of Traveller cheques.
– Domestic Clearing participants.

Users:
6683 number of users (Both bank and non bank). Total 189 countries are involved here. After Dec’99 it will be 190 countries i.e Bangladesh will join in the SWIFT member.
Secure Global Messaging Services
FIM (Financial Messaging)
Data – Digits, alphabets , Some Symbols
It is limited in number i.e. 2000 x 2 Character maximum 10,000 characters.
IFT (Inter Bank file Transfer): Unlimited bulk data transfer.
Data – Graphics, Pictures
Information Services
Bic Database Plus
Payment Directory

Interfaces:
1. Alliance Access (ALA) – Maintained by Branch
2. Alliance Entry (Al entry) – Maintained by Head office.

Standard MSG.
Sender : SOIVBDDH
MT100 (Customer Transfer)
Receiver : CITI US 33
20 :
32A :
50 :
59 :
FM:
Narrative :
Text :
Trailer:
Raider …. > Card Reader…> Login…..> Secret number….> SCP.
When may be used same card but secret number is different.
Remember it SWIFT is always correct.

Two types MSG:
1) Live- Real Msg.
Cost will be U5$ 37.5/10 mss.
2) Test & Training – Want to know something.
Cost will be irrespective of length of the msg. USD. 10.2/100 msgs. Varies for the length of the msg.

Head Quarter : Belgium
600 Employees
OPC : (Operating Centre)
Netherland, United State
CSC : Customer Support centre.

Regional & branch Offices
Hongkong
Newyork
London
Tokyo
Milan
Frankfrut and
Paris.

Organization >> Board >> >>Board task forces >> National member group >>
User Group >> Customers
Alliance Access Entry – Window Network (Br.)
Alliance Entry – Window Network (H.O)

SWIFT have the following Group

1. User Group (Bangladesh is user group)
2. Member / Sub member
3. Participant.

Symbol Used:
Arab Bangladesh Bank = ABBL BD DH
i.e. ABBL = Arab Bangladesh Bank Ltd.
BD = Bangladesh.
DH. = Dhaka.
Islanii Bank Bangladesh Ltd.
IBBL BD DH
SWIFT Code number of the branch
We can write like this
IBBL BD DH 1,2,3

Msg.

Headers
Text
Pay to 59 : Br. XYZ
Trailers (Swift Test Key)

SWIFT Benefit:
1. Increase of the business
2. Increase efficiency
3. Enhance security
4. Reduce Cost
5. Manage Risk
6. Cost effective
7. Automated processing
8. Standard formate
9. Reduce to Fraud.

2. BIC = Bank Identifier Code
4 Alphabet = Bank Code = IBBL
2 Alphabet = Country Code = BD
2 Character = Location Code =DH
3 Character = Branch Code = 102, 103 etc.

How the Network Architecture?

SCP- System Control Processor
SP-Slice Processors
RP – Regional Processor
STN- Swift Transfer Network
SAP- Swift Access Point.

Types Of Msgs.
User to User Msg. – Categories 1-9
System Messages – Category – 0
Service messages –
Msg. Type MT (Message Type ) 100
1 = Category No. e.g. (Customer Payment & Cheques)
0 = Group No e.g. System msg.
0 = Type No.

Categories of Messages
0. System Messages
MTO2O Retrieval Request (Text and History)
MTO21 Retrieval Message (Text and History)

1. Customer payments & Cheques
MT100 Customer Transfer
MT11O Advice of Cheque

2. Financial Institution Transfers
MT200 Financial Institution Transfer for its own Account
MT202 General Financial Institution Transfer

3. Foreign Exchange, Money Markets & Derivatives
MT300 Foreign Exchange Confirmation
MT320 Fixed Loan / Deposit Confirmation
4. Collections Cash Letters
MT405 Clean Collection
MT450 Cash Letter Credit Advice

5. Securities Markets
MT 521
MT572

6. Precious Metals & Syndications
MT600 Precious Metal Trade Confirmation
MT609 Statement of Metal Contracts

7. Documentary Credits & Guarantees
MT700 Issue of a Documentary Credit
MT740 Authorjsatjon to Reimburse

8. Travel Cheques
MT800Traveller Cheques Sales and Settlement Advice
MT820 Request for Traveller Cheques Stock

9. Cash Management & Customer Status
MT910 Confirmation of Credit
MT590 Statement Message

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