What Is A SWIFT Code? BIC & SWIFT Format Explained

Euan Robb
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Content Manager at Equals Money
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5
min read
Publish date
14/06/24

Contents:


Definition of SWIFT code

A SWIFT code, also known as a Bank Identifier Code (BIC), is a unique alphanumeric code used to identify a specific bank or financial institution in international bank transfers.

It serves the purpose of facilitating secure and efficient international transfers by providing a standard format for identifying the country, bank, and branch to which the funds are being transferred.

When initiating an international bank transfer, the sending bank requires the recipient's SWIFT code to ensure that the funds reach the correct destination. The SWIFT code contains specific information about the bank and its location, allowing for accurate routing and delivery of the funds. Each bank has its own unique code, which can vary in length but is always made up of a combination of letters and/or numbers.

These codes are especially crucial for international transactions, where the correct BIC code must be provided to ensure the funds reach the intended destination.

 

Are SWIFT and BIC codes the same?

BIC and SWIFT codes can be confusing, but they actually refer to the same thing and are often used interchangeably by different banks, financial institutions, and payment providers.

Simply put, SWIFT is the messaging system used, while BIC is the code that identifies a specific bank, hence its name 'Bank Identifier Code'. As mentioned, the terms SWIFT and BIC are often used interchangeably, as they both refer to the same 8-11 digit code.

This distinction does not alter the basic functionality of the codes, but rather reflects variations in terminology used by different financial institutions. So, if you're asked for your SWIFT or BIC code, it's the same number you need to provide.

In summary, SWIFT codes and BIC codes are essentially the same thing, with only slight variations in terminology. Regardless of the specific terminology used, these codes play a vital role in facilitating secure and accurate international financial transactions.

 

Purpose and importance of SWIFT BIC code

The SWIFT BIC code serves as a universal identifier for banks and financial institutions worldwide. It contains a unique combination of letters and numbers that identify the specific bank involved in a transaction. This code is essential in facilitating international money transfers, as it accurately and efficiently directs funds to the correct recipient.

Furthermore, the SWIFT BIC code is a vital component of the SWIFT network (Society for Worldwide Interbank Financial Telecommunication network), a global messaging system that enables secure communication between financial institutions. This network ensures that data and transactions are exchanged securely and efficiently, protecting both the sender and receiver from potential fraudulent activities.

The importance of a SWIFT BIC code in international money transfers cannot be overstated. Without it, the transfer process would be prone to errors, delays, and misrouting of funds. As mentioned, the SWIFT code ensures that funds are sent to the correct bank and account, eliminating the risk of funds being lost or sent to the wrong recipient. By using this code, banks can easily communicate and exchange information with each other, ensuring that payments are directed to the correct recipient. Additionally, the SWIFT Code enhances the security of international financial transactions by adding an extra layer of authentication.

Overall, the SWIFT Code is crucial for enabling smooth and secure cross-border payments, facilitating global trade, and ensuring the stability of the international financial system.

 

Breakdown of the SWIFT code format

The format of a SWIFT BIC code consists of 8 - 11 alphanumeric characters, divided into four parts: the bank code, the country code, the location code, and the branch code.

  • The bank code is a unique identifier assigned to the bank or financial institution. It is usually made up of four letters and may be the initials of the bank’s name.
  • The country code represents the country in which the bank or financial institution is located. It is a two-letter code determined by the International Organization for Standardization (ISO).
  • The location code refers to the specific city or region where the bank or financial institution's head office or primary office is situated. It is either two letters or digits, and sometimes a combination of the two.
  • The branch code is an optional part of the SWIFT BIC code. It further specifies the branch of the bank where the account is held. Because some banks don’t use the 3-character branch code, they’ll have a shorter (8-character) BIC code. For these banks, the branch code may be replaced by a triple X (i.e. MIDLGB22XXX) or left off entirely.

SWIFT code BIC example

To illustrate, let's consider an example. The SWIFT BIC code for the Bank of England may look like this: BKENGB2LXXX.

In this example, "BKEN" represents the 4 letter bank code, "GB" represents the two-digit country code (where the bank or financial institution is located), "2L" represents the location code (where the bank's head office or primary office is located), and "XXX" represents the three-digit branch identifier code (however, in this instance the bank does not use the 3-character branch code, so it has been replaced by a triple X).

 

Further SWIFT BIC examples

Bank or financial institution BIC/ SWIFT ID Breakdown
Danske Bank DABADKKK "DABA" identifies Danske Bank, "DK" is the country code for Denmark, "KK" (for København in Danish) is the code for Copenhagen.
Deutsche Bank DEUTDEFF500 "DEUT" identifies Deutsche Bank, "DE" is the country code for Germany, "FF" is the code for Frankfurt, and "500" is the branch code for the office of Deutsche Bank in Bad Homburg.
Unicredit Banca UNCRITMM "UNCR" identifies Unicredit Banca, "IT" is the country code for Italy, and "MM" is the code for Milan.
The Bank of Nova Scotia NOSCCATTXXX "NOSC" identifies The Bank of Nova Scotia, "CA" is the country code for Canada, "TT" is the code for Toronto, and "XXX" represents the bank’s head office.
State Bank of India SBININBBXXX "SBIN" identifies the State Bank of India, "IN" is the country code for India, "BB" is the code for Mumbai, and "XXX" represents the bank’s head office.

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About the author
Euan Robb
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Content Manager at Equals Money