Strategic Russian firm dumps SWIFT in favor of domestic bank transfer alternative

Strategic Russian firm dumps SWIFT in favor of domestic bank transfer alternative
Russian state tech giant Rostec will use Russia’s analogue of SWIFT interbank cash transfer services, the company said in a press release.

The tech firm will connect to the Russian system for transfer of financial messages (SPFS) to make its payments safer. “The digital infrastructure will help to exchange data in encrypted mode, which reduces the risk of external intrusion into the system and the likelihood of hacker attacks,” Rostec said.

Rostec was established in late 2007 to consolidate strategically important Russian companies. It has divisions in aircraft, electronics, and armaments. It unites companies like Russian Helicopters, Kalashnikov Concern, and Rosoboronexport.

The head of Rostec, Igor Zavyalov, said that the transition to a new system will reduce dependence on foreign services and will provide an opportunity to transfer information without using the capacities of foreign providers.

Last month, another Russian state-owned firm, global oil giant Rosneft, announced it had tested the SPFS in December with the help of the country's third largest lender, Gazprombank.

The potential exclusion of Russia from SWIFT has worried the country’s banks since 2014, when the EU and the US introduced the first round of international sanctions against Moscow over alleged involvement in the Ukraine crisis and the reunification with Crimea. However, SWIFT itself has fended off such talks.

In 2017, the head of the Central Bank, Elvira Nabiullina, said at a meeting with President Vladimir Putin that Russia is ready for disconnection from SWIFT.

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