SWIFT or the Society for Worldwide Interbank Financial Telecommunication is a global member-owned cooperative that is headquartered in Brussels, Belgium. It was founded in 1973 by a group of 239 banks from 15 countries which formed a co-operative utility to develop a secure electronic messaging service and common standards to facilitate cross-border payments.
The SWIFT is a secure financial message carrier — in other words, it transports messages from one bank to its intended bank recipient. Its core role is to provide a secure transmission channel so that Bank A knows that its message to Bank B goes to Bank B and no one else. Bank B, in turn, knows that Bank A, and no one other than Bank A, sent, read or altered the message en route. Banks, of course, need to have checks in place before actually sending messages.
In February 2016, in the Bangladesh Bank heist, $81 million was fraudulently withdrawn from the central bank of the country, at the Federal Reserve Bank of New York through the SWIFT network.
The SWIFT network carries an average of approximately 26 million financial messages each day. In order to use its messaging services, customers need to connect to the SWIFT environment. There are several ways of connecting to it: directly through permanent leased lines, the Internet, or SWIFT’s cloud service (Lite2); or indirectly through appointed partners. Messages sent by SWIFT’s customers are authenticated using its specialised security and identification technology. Encryption is added as the messages leave the customer environment and enter the SWIFT Environment. Messages remain in the protected SWIFT environment, subject to all its confidentiality and integrity commitments, throughout the transmission process while they are transmitted to the operating centres (OPCs) where they are processed — until they are safely delivered to the receiver.
Source: The Hindu.
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