Why is the international banking system so complicated?
 

F.e international wires take up to 1 week and are a pain in the ass. And from what i know they work the same way as 20 years ago.

I mean, we are living in the 21st century. Shouldn't it work faster and be more convenient? :mad:

There are still parts of the world using bank checks. These things take time :(

yeah it's truly incredible. These people work with a physical piece of paper as a proof of permission to transact.

simple:

polish_bankfraudecammers

4

yeah...90% of all international wires are done trough the SWIFT system...witch is a very secure system, but very old.....it's so secure becouse it requires that the banks have private X25 leased lines to one of the SWIFT point of presence...for example X25 leased lines from the banks in europe have to go all way to Belgium, at the SWIFT headquarters. The whole process and message transmiting is done with an interface and script language in a manner very similar to how Telnet works and witch is actualy very old. The good news is that SWIFT has started migrating all it;s network to an IP based network, and this process will be finished arround 2005-2006.
Also there are 2 big catches in doing international wires :

1 is that banks can not transfer forign curency directyly between them, as it must pass one bank from the country witch issued it. For example all USD transfers from all the world must pass trough a US coresponded bank . Ex: a USD wire from sweeden to italy can no go directly, it must pass a US bank.

2. And this is the biggest !! There is a fied in the wire transfer message called VALUE DATE : this is the day when the money actualy become available on the beneficiary account. Usualy, so they can keep the money more, the VALUE DATE is set at SPOT +2 this means that the wire will be credited in 3 business days on the beneficiary account. Even the transfer message is received by the beneficiary bank 1-2 days before, the money will be there is 3 days at minimum.....some banks wire funds with a value date of SPOT+5 or etc.

You can request your bank to wire fund with a VALUE DATE of SPOT+1 or even SPOT (this means same day value) and the money will be credited to the beneficiary account in the same day. ( if not affected by the time zone difference). But they will charge you extra for sending a wire with a Value Date of SPOT +2 (10-50$ or even more) couse they will have to let the money go same day and they will loose some intrest they would be made if the money were delayed...

Hope this helps

true what is above - also big problem is clearing - chasing the orginal of the payment takes a lot of time and cause huge delayes in all payments in the front

becaue of 9/11 of all world affairs...

Greenlab,

Have you worked for SWIFT ?

You have a good knowledge of their business :-)

So what's an MT100 ? :glugglug

So is there a faster method of exporting money?

I've never had any problems with international wires, the funds are usually in my account less than 24 hours after they are sent...

Both US->AU and EU->AU


Migrating to IP sounds a bit scary. I wonder how many banks already run "private" encrypted networks over public internet links? They also LOVE Windows servers! :helpme

no..lol but i like to keep myself in a very informant shape :)


MT100 is the old SWIFT message format standard...it was develped about 25 years ago and can no loger be used since november 2003

the new message format is MT103 witch is a little evolved and more complex than the old MT100. Since november 2003 all banks must use MT103 when are issuing a FIN message trough the SWIFT network.
Also there are another 2 more evolved versions of MT103, called MT103+ and MT 103 REMIT, but they are mostly used for interbanks comunications and etc.

True expert :winkwink:

you can have very fast wires (same day) if you have your bank (Ordering Institution) send the wire with the SAME DAY VALUE DATE ! most banks will do it, but will charge you extra...

Does the SPOT value also affect when the settlement between banks happens (which may result in different currency rates), or is it purely for the receiving banks benefit?

As mentioned above my wires arrive very quickly, perhaps my bank ignores this and credits me immediately.

yes, the SPOT (VALUE DATE) value is the settlement date, thats why the ammount is credited on the beneficiary account on the VALUE DATE. Even if your bank is slow, or for any reason they receive the SWIFT message AFTER the value date (happens mostly when banks don have all the branches connected in real time to headquarters) they must credit your account on the value date. Ex. 5000$ incoming with a value date of 15 of June...for whatever reason bank/branch received the message of 17th of June...they will credit the funds on your account on 17th of June but with a date of "funds available" of 15 of June

If you get your wires quickly it means that the Ordering Bank is puting a Value Date of SPOT +1 or smth...not all banks put the default value of SPOT +2 and also there are a lot of banks that allow the ordering customer to specify the value date, witch can be from SPOT to SPOT+xxx

Bravo. Nice post.

Ya can also thank Team Bush for setting in some overly reactive mechanism that hold money...

Remember Osama, he wired money to his pal's that flew planes into the twin towers in New York not so long ago?

The longer a wire takes to go through, the longer banks make money on the interest you should be collecting. They're never be instant for this reason and this reason alone.

The IP network SWIFT started to use, is , as strange as it may sound, VERY private. There are only about 5-10 agreed providers in the whole world (ATT, BTTelecom, etc.) that will be allowed to provide IP services to the SWIFT network. This providers have to create a dedicated network of circuits and lines, routers and etc to be used 100% for the SWIFT network....no other traffic, exempt for the SWIFT traffic will be allowed to pass trough this dedicated setup....so this actualy is a REAL PRIVATE IP network...in countryes where none of the agreed providers have a point of presence, they have to create one (sometimes by subcontracting with a local big ISP) but they will have to stick to the same 100% dedicated setup.....
The BIG change > IP Network will bring A LOT of new services to the SWIFT system......and you will see in the near future the SWIFT system used by big international private companyes to exchage messages in a secure and certified enviroment , as SWIFT is planning to launch an offer to private companyes as soon as the change is over....also SWIFT will try to push an entry on the US market....