The Society for Worldwide Interbank Financial Telecommunication, or SWIFT, provides an organizational platform for facilitating international payments.  U.S. and foreign financial institutions use SWIFT messages to initiate, process, receive, and settle payment orders.  The amount of information exchanged via SWIFT is immense.  More than 9,000 financial institutions in 209 countries rely on SWIFT to process international payments, and an average of 17,000,000 SWIFT messages are sent in a given day.  SWIFT messages contain sensitive financial information about consumers, businesses, and governments and for that reason raise unique financial privacy concerns.

In recent years, governments such as the United States have obtained access to the SWIFT database, including transactions involving citizens as well as foreign residents, in order to combat terrorism.  However, certain countries have criticized and pushed back against such access out of concerns for their citizens’ privacy.  In 2010, the United States and European Union reached an agreement whereby SWIFT message information will be made available only for the purpose of preventing, detecting, and prosecuting terrorism and only upon a showing that such information is necessary.

More broadly, the Dodd-Frank Act provides for Federal Reserve supervision of systemically important payment and settlement activities, and it is generally expected that the international payments system will receive more attention from regulators in the future.  For instance, recent Treasury rulemakings have requested further comment on the subject of non-U.S. payment and settlement providers. 

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Photo of Mike Nonaka Mike Nonaka

Michael Nonaka is a partner in the firm’s Financial Institutions practice group. He represents banks and other financial institutions on a wide variety of bank regulatory, enforcement, legislative and policy issues.  Mr. Nonaka also is co-chair of the firm’s Fintech Initiative and works…

Michael Nonaka is a partner in the firm’s Financial Institutions practice group. He represents banks and other financial institutions on a wide variety of bank regulatory, enforcement, legislative and policy issues.  Mr. Nonaka also is co-chair of the firm’s Fintech Initiative and works with a number of banks, lending companies, money transmitters, payments firms, technology companies, and service providers on innovative technologies such as big data, blockchain and related technologies, bitcoin and other virtual currencies, same day payments, and online lending.