I'm sure I wasn't the only one to be startled last Friday, when, barely awake and brushing my teeth, I turned on the radio to get the morning's news, traffic and weather and heard the announcer mention, "Swift, an international banking organization." And if the reference to the global payments cooperative - very familiar to me but rarely if ever the focus of mass media business reports - wasn't startling enough, the report that followed certainly shook any remaining overnight fog from my brain.
The revelation - first published by The New York Times, The Wall Street Journal, The Washington Post and the Los Angeles Times - that since 2001 Swift has provided U.S. counterterrorism officials with access to its database and payments records has been front-page news ever since. Apart from an official statement about its compliance policy, posted at swift.com/index.cfm?item_id=59897, Swift executives have had no further public comment on the arrangement. The White House, however, has been extremely vocal in its condemnation of the Times, claiming that reports about the program undermine the war on terror by essentially tipping off the enemy.
My guess is that anyone who has figured out how to subvert the Swift network (or any other bank-related channel) to fund terrorism or anything else illegal also is smart enough to understand that sooner or later the government is going to want to look at Swift records to try to track this kind of activity. I doubt anyone really has been "tipped off" by these reports.
Frankly, as details emerged, what really surprised me was that anyone (or at least anyone who knows the banking industry) was surprised to learn about this program. It would have been more shocking - and outrageous - to learn that Swift was not being used as a resource to help identify and track terrorist funding. Furthermore, it appears so far that Swift officials have been extremely sensitive to the complexities and potential abuses of this information-sharing arrangement and have so far taken appropriate compliance and governance steps to manage it. Once again, it appears that, amid the many missteps and frustrations related to the efforts to understand the implications of the attacks of Sept. 11, 2001, and prevent future terrorist attacks, for the most part the banking industry stands apart as a model of competence, responsiveness and appropriate cooperation and compliance.
This is not a flash-in-the-pan story, and no doubt more details will emerge about the scope and implications of the program. There also will be more questions about the government's strategy and Swift's role in it, as well as continued debate about efforts to balance customer privacy concerns with national security requirements. If there were any doubts remaining about the existence of a global, integrated financial services industry, they should be dispelled by now.
Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio