People in the financial world would have heard of the term SWIFT. For those few who have not heard of the term will not know how this is actually something beneficial for most businesses around the world. This is in fact a large network that links the world's major banks together and is used for the purpose of clearing and putting through international payments. An example of this is if a person was to make a payment in one country through SWIFT they will have a 90% chance of having the funds transferred.
This system of payment was found in 1079 whereby many businesses and individuals had very little in terms of putting through a transaction of payment across continents. This was started by a consortium of European banks more as a response to the threat of American banks coming up with high tech payments services. Europe was in need of a payment plan that provided clients and individuals with ease of transferring payments and reassurance that the payments would be successful. The term SWIFT is an acronym for The Society for Worldwide Financial Interbank Telecommunication.
These days most of the major international banks use SWIFT as a main form of interbank messaging and networking. These messages are transferred securely and safely, making it a trusted procedure. One thing that distinguishes this kind of system is that it does not hold accounts for its client users therefore they do not perform a system for clearing and/or settlements. In November 2008 it was recorded that 8,740 financial institutions were linked to this system in 209 countries.
When using this system one would need to understand that this type of interbank network does not facilitate funds transfer and so financial institutions would need a corresponding banking relationship for financial transactions. This can almost be a difficult situation as most financial institutions do not have banking business relationships. They would need to affiliate themselves with a bank or have a strong banking relationship by being one. For this reason many financial institutions will establish this kind of relationship very early on and even establish more than one banking relationship.
SWIFT was originally founded in Brussels and is therefore run under Belgian law. In 1995 it was estimated that the value of $2 trillion were processed by this system every day with an average of 2,4 million messages. This was proof that the networking system was much more accurate in transporting message than any other service.