What is Cryptocurrency A new word emerged in our lives two months after the beginning of the recession of 2008 and gradually transformed from a vague expression ("virtual coin") to the vocabulary used to characterize the new economy. On June 9, 2009 the first bitcoin was released by an anonymous person called Satoshi Nakamoto. For different reasons like the sub-prime crisis, Nakamoto, claimed he is a Japanese man in his 30's, said he gave the open protocol in 2007. Today the new coin is called a "Digital Asset" and decentralization is the principal idea behind it: there's no main institution responsible for regulating it. The most familiar and traded form of Blockchain's technology, Bitcoin, who has crossed the $15,000 lines way back and has shows an image of exponential increase in the past few months. The great advantage of blockchain technology is that it doesn't have to keep records for a large central computer or big managing company. With this ...
In this article we will discuss what SWIFT does, how it works and how it makes money. Every day almost 11,000 SWIFT Member institutions send approximately 33.6 million network transactions to SWIFT.
Today, it's easy to go to a bank and transfer money all over the globe, but how? The Society for Worldwide Interbank Financial Telecommunications (SWIFT) network is behind most foreign money and security transfers. SWIFT is an enormous network of messaging services used by banks and others to send and receive information, including money transfer instructions, easily, accurately and securely.
What is SWIFT
The SWIFT is a member-owned co-operative which provides its members with safe and secure transactions for financial transactions. This payment network enables individuals and companies even when a customer or sale provider uses a different bank than the payee to pay electronically or by card.
SWIFT assigns each institution to a single ID code that not only identifies the name of the bank but also the country, city and branch of the institution.
How SWIFT Works
SWIFT is a message network used to securely communicate information and instructions using a standardized code system by financial institutions.
SWIFT assigns a special code of either eight or 11 characters to each financial organization. In order to understand how the code was assigned, please look at UniCredit Banca Italian bank, based in Milan. The code is referred to as the bank identification code, SWIFT, the SWIFT code or an ISO 9362 code.
The SWIFT code is UNCRITMM 8-character.
• First four characters: the UniCredit Banca Institute Code (UNCR)
• The following two attributes: country code (IT for Italy like)
• The following two characters: location / town (MM) code for Milan
• The last three characters are optional, but organizations use this to allocate code to each branch. (UNCRITMZZZ code may be used by UniCredit Banca in Venice.)
Why is SWIFT Important
Within three years of introduction, SWIFT membership has increased to 239 banks across 15 countries. Despite other message services such as Fedwire, Ripple, and CHIPS, SWIFT continues to maintain its dominant market position. Its success is due to how new message codes are constantly added to relay various financial transactions.
While SWIFT has started primarily with simple payment instructions, it now sends messages for various actions, including security and treasury transactions. Almost 50 per cent of SWIFT traffic is still for payment-based communications, but now 47 per cent is for security transactions and the remaining traffic is for treasury transactions.
How SWIFT Make Money
SWIFT is a Member-owned cooperative society. Members are classified into share ownership classes. All members pay a one-time membership fee plus annual support fees that vary from member class to member class. SWIFT also charges users by type and length of message for each message. These charges also vary depending on the volume of use of the bank-there are different charging levels for banks that generate different volumes of messages.
In addition, additional services were launched at SWIFT. Those are backed up by SWIFT's long history of data. These include business intelligence, reference data, and compliance services, as well as offering other SWIFT revenue streams.
Challenges
Most SWIFT clients have large transactional volumes for which manual instruction entry is inconvenient. The need to automate the creation, processing, and transmission of SWIFT messages is increasing.
That comes at a cost and overhead of operation, though. While SWIFT has been successful in delivering the same software, it also comes at a cost. For most of its customer base, SWIFT may need to tap into those problem areas. Within this area, automated solutions will bring a new revenue stream for SWIFT and keep customers engaged in the long run.
Conclusion
SWIFT retained its dominant position in transactional message processing globally. Recently it has forayed into other areas, such as offering business intelligence reporting utilities and data, which indicates its willingness to remain innovative. SWIFT seems set to continue to dominate the market in the short to mid-term.
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