Swift Defined

SWIFT, is a secure standardized form of communication between financial institutions.
SWIFT stands for Society for World-wide Inter-bank Financial Telecommunications and is an international organisation. It provides means of secure communications between Banks and its members. Membership to the society is regulated and only vetted applicants are permitted to use the system at varying access levels.

It ensures that banks can communicate with each other and provided validation and verification checks on their communications. It operates largely as a database of varying levels of communication and transmittance of financial documents and messages. Physical documents cannot be sent by SWIFT.

To be able to send and receive authenticated SWIFT messages one must be accepted and subscribed to the Society.

Banks will have a trained SWIFT operator responsible for the management of SWIFT messages, both out-bound and in-bound. In smaller Private Banks, this may be one single individual. Larger banks will have SWIFT operator departments.

Each SWIFT message will have a Message Type (or MT) depending on the database field. For example, MT 100 relates to cash transfers and the sending of client funds between banks. MT 700 relates to Documentary Credits and Guarantees.

It is important to not complicate or refer to these SWIFT Message Types in professional communications since it will not concern either the client or recipient and is meant for inter-bank communication only.

Messages such as verification of funds, delivery instruction/MT199/MT799/MT999/ MT760, and much more can be sent via SWIFT. In dealing in Bank Guarantees (Demand Guarantees) and Letters of Credit (Documentary Credits), one may hear the phrase 'MT799'.

This is the SWIFT Message Type that Bank Guarantees can communicate authenticated free format messages securely. Inter-communicating banks may use this Message Type on their SWIFT systems to communicate various types of messages and offer pre-advice of intended transactions. This Message Type is free format, allowing the Operator to type freely various different messages connected with MT700 communications, i.e. Documentary Credits and Guarantees.

In dealing in Bank Guarantees, one may hear the phrase 'MT760'.

This is the SWIFT Message Type that Bank Guarantees are sent and received by inter-communicating banks. When sending a Bank Guarantee by SWIFT, the SWIFT Operator will enter the details on this Message Type relating to the specifics of the Guarantee.

It is only Bank Guarantees that are sent with this Message Type 760.

It is important not to get caught up in inter-bank jargon and would advise that this phrase is not used when discussing Bank Guarantees as it neither concerns the client nor the recipient. Its meaning is strictly inter-bank communication and nothing else.