Module: | MODULE A: INTERNATIONAL BANKING
Q241: Consider the following statements regarding the technological evolution of international banking from legacy systems to modern architectures:
Statement 1: The transition from Telex to the SWIFT network represented a shift from unstructured, point to point text messages to standardized, structured financial messaging protocols.
Statement 2: Distributed Ledger Technology eliminates the need for sequential bilateral messaging by providing all permissioned network participants with simultaneous access to a single, immutable source of truth.
Statement 3: In the context of cross border payments, modern Distributed Ledger Technology frameworks have entirely replaced the SWIFT network as of January 2026 for high value interbank settlements globally.
Which of the statements given above is or are correct?
Statement 2: Distributed Ledger Technology eliminates the need for sequential bilateral messaging by providing all permissioned network participants with simultaneous access to a single, immutable source of truth.
Statement 3: In the context of cross border payments, modern Distributed Ledger Technology frameworks have entirely replaced the SWIFT network as of January 2026 for high value interbank settlements globally.
Which of the statements given above is or are correct?
✅ Correct Answer: A
The correct combination is A. The technological evolution of international banking involves the continuous modernization of cross border communication and settlement systems.
The foundational transition occurred in the 1970s when the Society for Worldwide Interbank Financial Telecommunication, known as SWIFT, replaced Telex.
Telex relied on free format text, which required manual interpretation, whereas SWIFT introduced standardized message types that enabled automated processing.
Distributed Ledger Technology represents the current frontier, structurally transforming the architecture from bilateral sequential messaging, where each correspondent bank updates its own ledger sequentially, to a shared, decentralized ledger where all nodes verify and record transactions simultaneously using cryptographic consensus.
Historically, international banking relied exclusively on correspondent banking networks which were relatively slow.
While Distributed Ledger Technology is rapidly gaining traction for cross border settlements, Statement 3 is incorrect because, as of early 2026, SWIFT remains the dominant global network for high value interbank messaging.
SWIFT has not been replaced; rather, it is evolving by integrating Application Programming Interfaces and interoperability protocols with emerging decentralized networks.
The foundational transition occurred in the 1970s when the Society for Worldwide Interbank Financial Telecommunication, known as SWIFT, replaced Telex.
Telex relied on free format text, which required manual interpretation, whereas SWIFT introduced standardized message types that enabled automated processing.
Distributed Ledger Technology represents the current frontier, structurally transforming the architecture from bilateral sequential messaging, where each correspondent bank updates its own ledger sequentially, to a shared, decentralized ledger where all nodes verify and record transactions simultaneously using cryptographic consensus.
Historically, international banking relied exclusively on correspondent banking networks which were relatively slow.
While Distributed Ledger Technology is rapidly gaining traction for cross border settlements, Statement 3 is incorrect because, as of early 2026, SWIFT remains the dominant global network for high value interbank messaging.
SWIFT has not been replaced; rather, it is evolving by integrating Application Programming Interfaces and interoperability protocols with emerging decentralized networks.