As part of the measures taken by opponents of Russian intervention in Ukraine, much is said about SWIFT. Can you explain what it is for and how it works?
Created in 1973, QUICK (Society for Worldwide Interbank Financial Telecommunication) is a private company under Belgian law which offers a secure messaging platform, communication standards and a range of products and services around this messaging.
This network is mainly used for transmit information to make bank transfers. It has no real competitor for transactions to countries not linked to continental clearing systems (eg: TO KNOW).
More than 11,000 banking and securities organizations, market infrastructures and enterprises are customers in more than 200 countries and territories.
In 2021, SWIFT transmitted more than 10 billion payment orders worldwide, with a daily peak of more than 50 million.
As a Belgian company, QUICK must apply the sanctions imposed on Russia because of the conflict with Ukraine by European legislation and in particular EU Regulation 2022/345 of March 1, 2022, which, in its Article 1 § 3 “prohibits the provision of specialized financial messaging services, used to exchange financial data… to any legal person, entity or body established in Russia “.
QUICK : how it works ?
QUICK is an intermediary facilitating the transport of messages containing payment instructions between the financial institutions involved in a transaction. Nevertheless QUICK :
- does not manage accounts for individuals or financial institutions,
- does not hold funds or financial assets,
- does not have transaction clearing or settlement functions.
QUICK does not transfer funds but just indicates to a bank A partner of a bank B that the latter has made an operation concerning it, thus allowing the credit and the debit of the customers. If the two banks are not partners, QUICK involves a third-party bank that has a partnership with both banks so that the operation can be carried out.
Member institutions are identified within the network by their BIC code (Bank Identifier Code), the very code of our bank details (sometimes called QUICK).
Within its proprietary network (guaranteeing speed, security, confidentiality and inviolability of exchanges), participants exchange standardized messages relating to financial transactions: purchase and sale orders, transaction execution confirmations, settlement-delivery instructions, payment orders, etc. Around this main offer, QUICK also provides other services, such as file exchange, business-oriented services, etc.
And the security of these exchanges with QUICK ?
In the middle of the previous decade, QUICK was the victim of cyberattacks which led to significant losses, particularly for the central bank of Bangladesh (€81 million) but also for an Ecuadorian bank.
Since, QUICK strengthened the security of exchanges by generalizing in 2021 the use of two-factor authentication (or double authentication – similar to strong authentication now used for validating payments on the Internet for French individuals) for messages concerning transfers of funds between banks. Are thus guaranteed by QUICK message integrity and confidentiality.
Moreover, given its central place in the international financial system, QUICK has taken steps to ensure the resilience of its network.