How does the SWIFT payment network use AI?

Acting on sanctions, European countries and the United States unanimously imposed a ban on major Russian banks from the SWIFT international payment network following Russia’s invasion of Ukraine. The ban means Russia would be in major economic disruption as it cannot access the global financial market. This means that commercial establishments and companies in Russia will be prohibited from importing or exporting or carrying out any monetary exchange; there will also be restrictions on investing or borrowing outside of Russia.

So what is SWIFT?

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) is a safe and secure international messaging network that banks in many countries use to make payments from one country to another. This global network connects banks to communicate messages about the secure transfer of funds using a code. SWIFT was founded in 1973 by a Belgium-based company to enable financial and banking institutions to transfer money to each other so that global commerce could continue smoothly and easily. SWIFT was created out of fear that a single private, all-American entity, Citibank, formerly First National City Bank, would control global financial flows.

11,000 banking establishments use SWIFT

Around 11,000 members (banking institutions) in 200 countries use SWIFT to send around 33.6 million transactions every day. In 2020, around 40 million messages containing instructions to send trillions of dollars were sent on the platform every day. Banks find SWIFT transactions very secure because messages are delivered over the network; these messages also help the banking system honor payment instructions quickly.

Three data centers

Three data centers manage SWIFT’s secure messaging network, located in the United States, the Netherlands and Switzerland; a command and control center is located in Hong Kong. These data centers share information in near real time; however, if failures are reported by one of the data centers, another center may handle transaction traffic. SWIFT uses submarine communication cables to transmit its data.

SWIFT currently provides services to financial institutions, including banks, stock exchanges, custodians, brokerage houses, asset management organizations, currency exchanges, securities brokers and corporate treasuries.

The technology used by SWIFT

According to Crunchbase, SWIFT uses around 19 technology products and services for its seamless transactions, including HTML5, Google Analytics and jQuery. Around 61 technologies are used for the SWIFT website, including Viewport Meta, IPhone/Mobile Compatible and SPF.

How does SWIFT use AI?

SWIFT offers its community a messaging platform, communication standards and value-added products and services where artificial intelligence technologies are used to improve quality.

AI for master data is used to

– Restructure data files from various sources around the world

– Improve local language translations

– Clean data and provide missing data elements

For example, today there is a lack of quality in the address field for some countries. SWIFT uses ML to better structure this data and improve translation for better data quality.

AI for Standards is used to

– Facilitate migration to ISO 20022

– Study the logic and pattern among the different standards

– Validate new standards

For example, SWIFT is performing AI research on different financial messaging standards to facilitate and automate the migration of all financial messaging standards to ISO 20022.

AI compliance for financial crime is used to

– Adjust and improve fraud detection rules

– Identify unusual business relationships

– Optimize efficiency and reduce cases of false positives

For example, SWIFT is researching AI for payment control solutions to automatically derive a personalized payment rule for each customer.

AI for Business Intelligence is used to

– Improve data quality

– Promote the products

– Perform profiling and peer group comparison for anomaly detection

For example, for SWIFT GPI, SWIFT performs AI research to determine the fastest, cheapest and most efficient route the payment can take.

Although SWIFT has leveraged AI at different stages of its transactions, from messaging to fraud detection rules and detecting anomalous activity in SWIFT financial transactions using ML and behavioral analytics, it was only recently that SWIFT announced a new AI platform. SWIFT is now leveraging a central role in the financial industry to develop transformative AI solutions by building a future-ready, high-performance AI platform for the hybrid cloud.

Transformational AI

Speaking at Sibos 2021, Tom Zschach, Chief Innovation Officer at SWIFT, said: “We see the use of AI and predictive analytics as key to delivering on our strategy, which includes instant and frictionless payments. We are now focusing on building AI and ML solutions to enhance our existing products. We are deploying an enterprise-wide AI platform at SWIFT with our technology partners. Red Hat will help us with the container platform. Kove, a software company, provided us with software-defined memory, and C3.AI provided data operations, for machine learning operations and DevOps.

In December 2021, at the AI ​​Summit in New York, Red Hat and SWIFT presented details on the use of AI/ML and containers in the financial services industry. As a neutral and trusted provider to the financial industry, SWIFT helps the community of over 11,000 financial institutions move value around the world reliably and securely at scale.

About Matthew R. Dailey

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