A bank identifier code, or SWIFT code, is a standardized code used to identify a specific bank.
A bank identification code (BIC) is a standardized and unique code used to identify a specific bank. These codes are used for wire transfers, especially international ones, and for financial communications between banks. Some banks list their codes on statements so people can easily access them, and you can also ask bank employees for the code if you need it for something like a wire transfer.
BICs are administered by the Society for Worldwide Interbank Financial Telecommunication (SWIFT). They are also known as SWIFT codes, and the terms SWIFT-BIC or ISO 9362 can also be used to describe a bank identification code. “ISO 9362” references the International Organization for Standardization, which developed the standardized format for bank identification codes to ensure that there would be international consistency.
The first four characters of a bank identifier code are letters that refer to the bank. The next two characters, also letters, are a country code that indicates where the bank is located, and the next two characters quote a specific location. Three optional characters can be added as branch code if the transmission is not sent to the bank’s head office. Location and branch codes can be alphanumeric.
Standardizing bank codes using ISO 9362 achieved several important goals. The first was that there was a uniform system in place, which greatly reduced confusion and ensured that banks could send communications easily and securely. Using a bank identifier code also reduces errors because the code is designed to be logical, making it easier to detect transcription errors and other problems. Standardization also reduces the risk of conflicting code, which makes it more certain that communications will end up where they should be and not in another bank by accident.
When sending money internationally from bank to bank, people often need a bank ID code for the transaction, along with specific recipient account information. Some banks are willing to refer this information to their customers when they make transfers, although bank employees may warn customers that if they don’t have the correct bank name and location, the money could end up in the wrong place. For this reason, people are generally advised to obtain the bank identifier code, account number, routing number, and other information needed for an electronic transfer directly from the recipient.