The banking world is perhaps one of the most complicated and interconnected industries in the world. It is also an industry that is full of acronyms and abbreviations. In this instalment of the TransferGo Blog we explain the SWIFT code.
What is a SWIFT code and how do I find it?
The infrastructure required to conduct business on a worldwide scale is immense. A staggering number of deposits and withdrawals are made every second. One of the protocols for insuring that money transfers are carried out accurately is the use of a SWIFT code.
SWIFT stands for the Society of Worldwide Interbank Financial Telecommunication which registers the codes worldwide and is approved by the International Organisation of Standardisation.
The SWIFT Code consists of 8 or 11 characters broken down as follows:
- 4 letters which indicate the bank or institution code. Often this resembles an abbreviation of the bank’s name.
- 2 letters which indicate the country
- 2 letters or digits which serve as a location code for the bank’s main office
In an 11-character SWIFT code the last 3 letters or numbers are the branch code; these characters are optional.
How do I find out what my SWIFT code is?
Often your SWIFT code can be found on your bank statement. If not, your bank will provide the SWIFT code for you.
There are a number of online SWIFT code lookup tools available. Whilst they are useful, it is best to obtain your code from your bank to ensure that transfers are carried out accurately.
Why SWIFT codes are important for transferring money
Most people use some form of electronic fund transfer system on a regular basis for items such as a direct debit payments or an automatic deposit of a pay cheque. These types of transactions are fairly simple and seldom require international transfers.
Without SWIFT codes the process of transferring money internationally for individuals and businesses would be a slow and inefficient process. In all likelihood, international transfers would also be more expensive.
Basically the SWIFT code provides an exact electronic address for the receiving bank.
Is BIC the same as SWIFT?
When making a transfer you will often be asked for a BIC code. BIC stands for Business Identifier Code. BIC was introduced by SWIFT and the two terms are basically interchangeable. Originally BIC stood for Bank Identifier Code. In 2009 the term was updated to more accurately reflect the nature of money transfers and the rise of fintechs.
The TransferGo Blog regularly publishes articles designed to help you better understand the financial and banking world, including articles on exchange rates, interest, and currencies in other countries.