SWIFT codes, also known as Bank Identifier Codes (BIC), are unique identification codes used to identify specific banks or financial institutions worldwide. The acronym “SWIFT” stands for the Society for Worldwide Interbank Financial Telecommunication, which is the organization responsible for assigning and maintaining these codes.
SWIFT codes are standardized and internationally recognized, allowing for efficient and secure communication between banks during various financial transactions, such as international wire transfers, payments, and messages.
A typical SWIFT code consists of either 8 or 11 characters and is structured as follows:
The first four letters represent the bank or financial institution code (only letters).
The next two characters identify the country code (letters or digits).
The following two characters indicate the location code (letters or digits).
Lastly, the optional three characters denote the branch code (letters or digits).
SWIFT codes facilitate accurate routing of funds between banks, ensuring that the money reaches the correct financial institution and branch. They are crucial for international transactions as they provide a standardized format for identifying banks across different countries.
It’s important to note that SWIFT codes are used for international transactions, while domestic transactions within a specific country may use other codes such as routing numbers or national bank codes.