Society for Worldwide Interbank Financial Telecommunications (SWIFT) functions as a worldwide financial messaging network. In such a network, financial messaging network. In such a network, messages are exchanged securely and reliably between banks and other financial institutions. SWIFT also markets software ad services to financial institutions, most of it is used on the SWIFT network and bank identifier codes commonly known as “SWIFT” codes.
The majority of international interbank messages use the SWIFT network. SWIFT provides turn-key solutions for members, consisting of linkage clients to facilitate connectivity to the SWIFT network and CBTs or ‘computer based terminals’ which members use to manage the delivery and receipt of their messages. These computer terminals are linked to the national concentration centers in the participating banks with the help of a SWIFT. A message is thus transferred from one bank to another with greater speed, lower costs and error free.
SWIFT is composed of national data concentration centers connected to each other via leased telephone. Lines to operating centers in Belgium, Netherlands, and United States. SWIFT transmits messages in a standardized format and there interbank fund transfer systems (like chips). Chips are created to reformat the SWIFT messages electronically to execute through the clearing house. At the end of the operations, these CHIPS clearing house funds are the ones to be netted out to transfer the real money amount. Hence, these chips operations have important economic implications. Apart from offering CHIPS, the system also allows the members to view their payments online to provide better information on the available funds.