Sending money to friends or family abroad is often more complex than just popping cash in an envelope. Not only can this be unsafe, but banks are required to carefully monitor and track money transfers across borders. One way they do this is through the use of bank identification codes. When making an international money transfer, these codes ensure the money reaches the correct bank and account. Although important, you don’t always need to know a bank identification code to make a secure transfer.
For instance, you don’t need one when using Remitly, a platform that offers affordable, safe, and convenient transfers directly from your phone. Understanding how these codes work, however, can be helpful. This guide explores the different types of bank identification codes and what they mean.
Types of Bank Identification Codes
Bank identification codes are used to identify financial institutions during transactions. The two main types are:
Code | Description |
SWIFT/BIC | Identifies a specific bank during international transactions. |
IBAN | Identifies an individual bank account for international transactions. |
The term “bank identification code” may refer to different systems depending on the type of transfer, the origin, and the destination of the funds.
SWIFT/BIC Codes
The first type of code is the Bank Identifier Code (BIC), also referred to as a SWIFT code. SWIFT stands for the Society for Worldwide Interbank Financial Telecommunications, the organisation that registers these codes globally. Most SWIFT codes are eight to 11 characters long, referring to specific banks and branches, and adhere to the ISO 9362 standard (set by the International Organization for Standardization). If you need your bank’s SWIFT code, it can typically be found online, on your bank statement, or by contacting your bank.
International Bank Account Numbers (IBAN)
IBANs are another way to identify bank accounts for international transfers. Unlike SWIFT codes, IBANs are assigned by banks, although the SWIFT organisation maintains their standards. IBANs are widely used in Europe, as well as parts of Asia, Africa, and the Caribbean. These numbers can be up to 34 characters long.To find your IBAN, check your bank statement or online banking portal. It is typically listed alongside your account details.
Example Use Case:
Suppose you live and work in the UK but regularly send money to your family in Romania. In this case, you would need the recipient’s IBAN to make a bank transfer. If you’re sending money via services like Remitly, which offers cash pick-up or home delivery options, you might not need to know the IBAN.
Domestic Bank Codes
When transferring money domestically or setting up payments in the UK, you may need to provide a domestic bank code along with your account number.
UK (Sort Codes)
In the UK, banks use sort codes rather than routing numbers. A sort code consists of six digits, grouped into three pairs (e.g., 12-34-56). The first two digits identify the bank, while the final four indicate the specific branch.
Domestic Bank Codes in Other Countries
Here’s how domestic bank codes differ around the world:
- US: Uses nine-digit ABA routing numbers.
- Canada: Eight-digit routing numbers (five-digit transit code and three-digit institution code).
- France: Uses the RIB (Relevé d’Identité Bancaire), a 10-digit number for banks and branches.
- Spain: Combines bank and branch details within the account number (20 digits total).
- Australia: Six-digit BSB (Bank State Branch) numbers.
- India: Uses an 11-digit IFSC (Indian Financial System Code).
How Do Bank Identification Codes Work?
Banks communicate via remittance messages, which are instructions to transfer money between accounts. These messages often include SWIFT/BIC codes or IBANs, which look like a jumble of letters and numbers to most people.
Example of a SWIFT Code:
Consider the SWIFT code for a hypothetical bank called Giraffe Bank in London: GIRAGB2LXXX. Here’s how it breaks down:
- GIRA: Bank name (Giraffe Bank).
- GB: Country code (United Kingdom).
- 2L: Location code (London).
- XXX: Branch code (optional).
For larger banks, the three-digit branch code ensures quicker routing of funds to the correct location, avoiding delays.
Do You Need a Bank Identification Code with Remitly?
If you’re using Remitly, there’s no need to hunt for SWIFT codes or IBANs. The app simplifies money transfers by allowing you to send funds using the recipient’s basic account details or other options like cash pickup, mobile money, or home delivery (depending on the country).
For example, sending money to family in Mexico could be done to a bank account or a non-financial institution for cash pickup, such as supermarkets or pharmacies.
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Speak the Banks’ Language
Even if you don’t use SWIFT or IBAN codes directly, understanding how they work can empower you to manage international money transfers effectively. These codes are the building blocks of global banking communication, helping ensure your funds arrive securely and on time.
Frequently Asked Questions (FAQ) About Bank Identification Codes
What is a Bank Identification Code?
A bank identification code (BIC) is a unique code used to identify a financial institution during money transfers. These codes ensure that funds are sent to the correct bank and account, especially for international transactions.
What is a SWIFT code?
A SWIFT code (also known as a BIC) is an 8- to 11-character code that identifies a specific bank and branch for international money transfers. For example, in the SWIFT code GIRAGB2LXXX, “GIRA” is the bank, “GB” is the country (United Kingdom), “2L” is the location (London), and “XXX” is the branch.
What is an IBAN?
An International Bank Account Number (IBAN) is a code used to identify an individual’s bank account for international transactions. It can be up to 34 characters long and includes details such as the country code, bank code, and account number.
Do I Need a SWIFT Code or IBAN to Send Money Abroad?
It depends on how you are sending the money:
- Bank Transfers: You will usually need either a SWIFT code or an IBAN.
- Services like Remitly: These may not require SWIFT codes or IBANs, as they simplify the process by allowing cash pickups or direct transfers with minimal details.
How Do I Find MAy Bank’s SWIFT Code or IBAN?
You can find your SWIFT code or IBAN by:
- Checking your bank statement.
- Logging into online banking.
- Contacting your bank directly.