European Merchant Bank Becomes a Member of Swift

European Merchant Bank Becomes a Member of Swift | Ekmel Çilingir

European Merchant Bank was founded in 2018 by Dr Ozan Ozerk. The work to obtain the license was led by Mr Ekmel Cilingir. Only two years after that, it became a member of Swift. This validation and recognition from top financial institutions in the economic landscape is a good sign.

Thanks to the Swift membership, it can now commit to its mission. According to Ozan Ozerk, the goal is to leverage the right technology, software, and business insights to empower the bank clients through a single API.

While the news that European Merchant Bank became a member of Swift can strike you as something ordinary, it is huge news. Let’s see what it means for the bank and its clients.

What is Swift?

Before you can understand and value the Swift system, let’s take a step back and look at the world before it was invented and implemented.

Mr Ekmel Cilingir explains that the system that banks used for international transactions before Swift was Telex. It was used for message confirmation for international funds transfer. But Telex came with few challenges. It was relatively slow, and it would sometimes take hours for the confirmation message to arrive.

It didn’t feature a unified system of codes. When sending money to someone, back in the day, you had to describe every transaction. The descriptions were often too long. Interpreting the descriptions was challenging, and all of it caused a lot of human errors.

The idea of a unified system of codes was born in the late 1960s. Finally, in 1973, the Swift system was founded. In the beginning, 239 banks in 15 countries started using it. It took only a couple of years for it to become the leading messaging network in the banking sector.

Swift stands for the Society for Worldwide Interbank Financial Telecommunications system. It is a sophisticated messaging network that enables banks and financial institutions to process payments even if the payee uses a different bank in a different country, says Ekmel Cilingir.

The Benefits of Swift

It is important to note that Swift is a messaging system. It is not a bank nor a system that holds securities or any funds for that matter. Also, Swift is not a system that enables banks and financial institutions to manage accounts for their clients. It streamlines communication between banks.

The main benefit of Swift lies in simplicity and reliability. It uses a standardized system of codes to enable one bank to send information and instructions to another. When a bank becomes a SWIFT member, it is assigned a unique code.

The code is often eight characters long, but it can contain up to 11 characters. This code is most commonly called a Swift code. However, there are a few interchangeable synonyms you should be aware of, including the ISO 9362 code, Swift ID, and the bank identifier code (BIC).

With a standardized system of codes, the margin of human error has been successfully reduced to zero. Swift also tackles the security challenges, encrypting the communication between banks, thus making it more secure.

European Merchant Bank & Swift

For those who don’t know, the European Merchant Bank of Akce Group Malta, is a relatively new bank, established in Lithuania in December 2018.

Thanks to the familiar faces in the financial niche, including one of its founders, the bank managed to cut through the noise and appear as a trustworthy partner for many businesses and private customers.

As of May 2019, the European Merchant Bank has become a SWIFT member. What does it mean for businesses and private customers managing their finances under the bank’s flag?

Starting from August 2019, the bank’s clients, be it businesses or individuals, can now send or receive transactions outside of the European Union. The bank has recognized the demand for a solution that enables quick and reliable money transfers.

In its effort to enable the clients to streamline their financial activities, the European Merchant Bank submitted the request to join the Swift communication network.

The bank met all the prerequisites to join the network and is now fully equipped to enable clients to benefit from instant, trusted, and secure payments. The European Merchant Bank Swift BIC is EUEBLT22.

The European Merchant Bank can now exchange financial information with more than 11,000 banks.

The Swift secure and efficient network doesn’t only include banks. Since the bank focus is divided equally to business and personal clients, the great news is that it will be able to exchange financial information also with:

  • Fund participants
  • Corporate clients
  • Investment managers
  • Payment, securities, and treasury market infrastructures
  • Brokers and dealers
  • Custodians

Full Scope of Payment Systems

In addition to Swift, the European Merchant Bank offers two additional payment systems to improve its clients’ experience – SEPA, which is currently active, and TARGET2, which is currently underway to be implemented, says Ekmel Cilingir.

SEPA stands for The Single Euro Payments Area. It is a payment-integration initiative brought by the European Union. Its primary purpose is to simplify all bank transfers made in Euro. Given that the bank is based in Lithuania, it is only logical to implement a payment system that brings value transfers to its clients.

Mr Ekmel Cilingir also reveals, that The European Merchant Bank has initiated the application process, and it is expected that it will become a member of the TARGET2 payment system soon. This payment system is operated by the Eurosystem. It stands for Trans-European Automated Real-time Gross Settlement Express Transfer system. It streamlines the processing of transactions made in euros. It currently encompasses over 52,000 banks all over the globe.

All banks have to go through a rigorous inspection and verification process to become members of a global network such as Swift. For a young bank such as the European Merchant Bank, it is a great accomplishment to become Swift verified after only two years since its foundation, says Ozan Ozerk.

At the same time, it is great news to its business and personal clients. They are now going to be able to make secure and reliable payments outside of the European Union.

Ekmel Çilingir | Chairman of the Supervisory Board of European Merchant Bank UAB