A bank identification code, or SWIFT code, is a standardized code used to identify a specific bank.
A Bank Identifier Code (BIC) is a standardized and unique code used to identify a specific bank. These codes are used for electronic 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 Telecommunications (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” refers to the International Organization for Standardization, which developed the standardized format for bank identification codes to ensure international consistency.
The first four characters of a bank identification code are letters that refer to the bank. The next two characters, also letters, are a country code indicating where the bank is located, and the next two characters cite a specific location. Optional three characters can be added as a branch code if the transmission is not sent to the bank’s head office. Location and branch codes can be alphanumeric.
The standardization of bank codes with the ISO 9362 standard achieved several important goals. The first was that a uniform system was in place, which greatly reduced confusion and ensured that banks could send communications easily and securely. Using a bank identification code also reduces errors because the code is designed to be logical, making it easier to spot transcription errors and other problems. Standardization also reduces the risk of code conflict, making it more certain that communications will end up where they need to be and not accidentally in another bank.
When sending money internationally from one bank to another, people often need a bank identification code for the transaction, along with specific recipient account information. Some banks are willing to forward this information to their customers when making transfers, although bank employees may warn customers that if they don’t have the correct name and location of the bank, the money could end up in the wrong place. For this reason, it is generally recommended that individuals obtain the bank identification code, account number, routing number, and other information necessary for a wire transfer directly from the recipient.