The figures were laid out by Swift chairman Jaap Kamp and CEO Lenny Schrank at a press conference held on the opening day of the annual Swift user show in Geneva.

The migration to SwiftNet is being phased in over the next two years. The interbank co-operative is keen to avoid the problems which have bedevilled the move to the new ISO 150222 messaging standard, with over 1000 institutions set to miss the 16 November deadline.

Chairman Kamp called on the largest banks to take a lead and push the industry forward in investing for SwiftNet. "Peer presssure is pretty powerful stuff," he says. "If all the industry leaders are moving in this direction, the rest will have to follow."

He estimates savings to the industry of up to $1 billion based on improved straight-through processing, standardised messaging and a so-called 'single window' connection to multiple market infrastructures. Savings to individual institutions are projected at $500,000 to $2 million, depending on message traffic.

The heavy cost of conversion comes at a time of increasing downward pressure on bank IT spending. In turn, the greatest benefits are expected to be reaped by Swift's larger members.

Schrank accepts that it is a tough time to be asking member banks to dig deeper into their pockets. But he points out that the decision to move to SwiftNet was taken many years ago. "They've got to bite the bullet," he says.

Schrank rejected suggestions that the abandonment of the deal with Global Crossing to build the new network was a factor in pushing costs up.

"The cost of going in and going out was basically legal fees and share of management time," he says, adding that the experience taught the organisation a lesson in managing risk and avoiding any future single points of failure.

He says that Swift is on the brink of signing contracts with four global telcos to provide banks with a choice of carriers for a virtual front-end interface to the SwiftNet backbone.