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How Does SWIFT Work?

IntaCapital Swiss SA is a boutique finance company head-quartered in the heart of Geneva, Switzerland and with representation world-wide.

SWIFT Messages & Communications

The SWIFT system ensures that all financial messages between banks are authenticated, plus provides validation and verification checks on all inter-bank communications. Each bank and financial institution will operate send and receive SWIFT terminals, which are manned by professionally trained operators.

SWIFT provides a secure network for transmitting messages from one financial institution to another. They also provide a set of syntax standards for financial messages, connection services and software that allows the actual transmission of messages over the SWIFT network.

All membership banks and institutions have their own designated SWIFT code or address. For example, the SWIFT code for HSBC UK BANK PLC is HBUKGB4104F, whereas their Hong Kong code or address is HSBCHKHHHKH. Barclays Bank London swift code or address is BARCGB22. So, if HSBC Hong Kong wishes to send a swift communication to Barclays Bank London, the operator would input BARCGB22 in order to send the message to the correct destination.

In 2018, having been criticised by the Financial times for inefficiency, SWIFT introduced Global Payments Innovation, (GPI), with most payments now being completed in under 30 minutes. Today this new product is being used by more than 1060 banks and other financial institutions dealing in 150 or more currencies.

The figures for SWIFT as at December 2018 show 31.3 million processed fin (financial) messages per day, its annual fin traffic being 7.8 Billion, which is a 56% increase from 2013. However, as at August 2020, swift recorded an average of 37.2 million fin messages per day an increase of 10.4% on the previous year.

It should be noted that when engaging in financial conversations, it is important not to included technical jargon relating to SWIFT, as it tends to complicate proceedings.

SWIFT Messages – Designation

Each message employed by the SWIFT system has a specific designation, and all messages are preceded by MT, (Message Type), and three numbers. To take an example an MT101, MT102 and a MT103 are designated as cash payments between banks.

All SWIFT messages should be formatted in accordance with the contents as laid out in the official SWIFT handbook.

Further examples of SWIFT messages are shown below:

MT799 and MT760


This message type is designated as a Free Flow message and is employed as a pre-advice message, where the bank issuing a Bank Guarantee informs the Beneficiary’s bank, (the Receiving Bank), that they can expect to receive a Bank Guarantee in favour of their client. This message type can also be used for a Standby Letter of Credit and a Documentary Letter of Credit.


This dedicated message type is designated for sending Bank Guarantees, Letters of Credit and Standby Letters of Credit from one bank to another.