What Is the SWIFT System? How It Works, and Whether It Includes All Countries
The SWIFT network is the world’s most important financial messaging system. More than 11,000 banks and financial institutions across 200+ countries rely on it to send secure financial messages related to international transfers and cross-border transactions.
In this guide, you will learn what the SWIFT system is, how it works, why it matters, and whether it covers every country.
What Is SWIFT?
SWIFT stands for:
Society for Worldwide Interbank Financial Telecommunication
Founded in 1973 in Belgium, SWIFT does not transfer money directly.
Instead, it sends encrypted financial messages between banks containing transfer instructions.
In simple terms:
SWIFT is the secure email system for global banking.
How Does the SWIFT System Work?
1. SWIFT Code (BIC) Identification
Every bank on the SWIFT network has a unique code such as:
This code identifies the bank, its country, and its branch. It is required for international money transfers.
2. Sending Financial Messages
When a customer sends money internationally, the sending bank transmits a SWIFT message that includes:
Sender and recipient detailsBank account number
Amount and currency
Transfer instructions
3. Actual Transfer Through Correspondent Banks
After the receiving bank gets the SWIFT message, the actual funds are transferred through:
Correspondent banks, orPre-established accounts between banks
SWIFT only communicates the instructions — not the funds themselves.
What Does SWIFT Provide?
SWIFT supports multiple types of financial messages, including:
International bank transfersLetters of credit
Clearing and settlement
Securities trading
Account and balance reports
These messages are standardized, reducing errors and increasing efficiency.
Advantages of the SWIFT System
High Security
Uses advanced encryption and global compliance standards.
Huge Global Reach
The majority of the world’s banks rely on it.
Faster International Transfers
Typically completed within 1–3 business days.
Unified Format
A universal messaging standard that simplifies international communication.
Does SWIFT Include All Countries?
No — not all countries or banks are part of SWIFT.
Reasons include:
1. International Sanctions
Some countries or banks are restricted due to political or security reasons, such as:
North KoreaIran (partially)
Several Russian banks
2. Lack of Financial Infrastructure
Some small or financially unstable countries do not have qualifying institutions.
3. Existence of Alternative Systems
Several countries have created their own alternatives:
China: CIPSRussia: SPFS
However, these remain far less widespread than SWIFT.
Why Is SWIFT Important to the Global Economy?
SWIFT is essential because it:
Facilitates global tradeEnables fast cross-border payments
Reduces the cost and errors of international banking
It has also become a powerful geopolitical tool, as cutting a country off from SWIFT can severely affect its financial stability.
Criticisms and Concerns About SWIFT
High Dependence on the System
Restricting a country from SWIFT can cripple its economy.
High Fees for International Transfers
Especially when intermediary banks are involved.
Western Centralization
SWIFT operates under European and U.S. regulatory influence, creating geopolitical tension.
Conclusion
The SWIFT system is the backbone of global financial communication. It sends secure banking messages but does not transfer money directly. Although it covers most countries, some are excluded due to sanctions, infrastructure issues, or reliance on alternative systems.
Despite emerging competitors, SWIFT remains the most trusted and widely adopted global financial messaging network.
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