The Society for Worldwide Interbank Financial Telecommunication (SWIFT) was set up to address a problem that banks were increasingly facing in the early 1970s. International payment processes at the time involved a range of forms, correspondence channels and manual checks. As global trade expanded and many banks built up their presence abroad, processing international payments required an ever-greater amount of time and effort. For Switzerland’s major banks in particular, the increase in their cross-border activities created a growing need for faster and more robust processes.
In 1973, leading banks from Europe, the United States and Canada founded SWIFT in Brussels. The participating institutions included predecessor banks of UBS. Four years later, the first cross-border financial messages were transmitted via the new network. SWIFT originally started out with banks in 15 countries. The new messaging service was groundbreaking: Instead of transferring the money itself, it transmitted standardized messages relating to payments and financial transactions. It was the first instance of a common language for international banking.
The network was initially used for client and bank transfers along with foreign currency transactions. Securities transactions, foreign exchange trade confirmations, promises of payment and account statements were added later. The messages were routed around the clock between the participating banks via an international network of data-processing and switching centers. Switzerland was connected to the operations center in the Netherlands.
SWIFT offered banks the advantages of less paper, fewer manual interventions and greater security. For clients, it meant faster and more reliable international payments. The benefits were evident, not only for international transfers but also for exports, trade, financing and other cross-border transactions. For Switzerland as an export nation and financial center, access to this global communications network became particularly important.
The network grew rapidly. By 1979, SWIFT was already processing over 150,000 transactions a day between more than 500 member banks. A few years later, over 1,440 banks in 49 countries were connected to the system. UBS’s predecessor institutions were also early adopters of the new standards and helped to link Switzerland’s financial center more closely with international markets. SWIFT became the backbone of global banking and developed into a largely invisible infrastructure that continues to enable international payments, investments, trading and foreign exchange transactions to this day.
Text sources:
Josef Bumann, Bank-Informatik, Ein Einstieg in die EDV für Bankangestellte, Bern and Stuttgart, 1987
Credit Suisse, Connectivity Tools, fact sheet: SWIFT Hub, 2005
Hypo Aargau, SWIFT(Society for Worldwide Interbank Financial Telecommunication S.C.), Schulung für Kundenberater, 1988
Image source:
UBS Long-Term Archives, photographer Kenneth Barbalato
Image sources at the exhibition:
UBS Long-Term Archives, photographer Kenneth Barbalato
UBS Long-Term Archives, press conference RTB 1977, photographer Niggi Bräuning
Sources of the images used in the exhibition video:
UBS Long-Term Archives