What are SWIFT codes and when are they needed?

What is a SWIFT code?

A SWIFT code is an international identity number for banks, which helps to ensure money comes out of and goes into the right accounts. Each bank will have a unique SWIFT code, 1 which makes it possible for all financial institutions to instantly recognise who they are dealing with in the case of international money transfers.

In essence, just as your account number lets your bank know who you are, a SWIFT code works as a form of ID when your bank wants to transact with its peers across the world. It also allows financial institutions to communicate with each other quickly and efficiently, even if transfers of money aren’t involved.

SWIFT itself stands for Society of Worldwide Interbank Financial Telecommunication. As the name suggests, the organisation was created with the intent of making it possible to communicate on a global basis. The SWIFT banking system currently has over 11,000 members, transferring an estimated 42 million messages per day.

You may also have heard of a BIC (Business Identification Code). While these are used to identify businesses from many industries on a global scale, a SWIFT code is a BIC which has been given to a bank by SWIFT themselves. As such, the two terms are sometimes interchangeable.

When do I need to use a SWIFT code?

If you find yourself needing to send to or receive money from an international bank, you’ll be asked to provide a SWIFT code. This could be a business transaction, but equally it might just be the transfer of funds between you and a relative in another country. Any time money is transferring to or from your account to an overseas bank, a SWIFT code is likely to be required.

It’s not just banks who use these codes. Most financial bodies will ask for one if money is being moved internationally. Common examples of other institutions who rely on SWIFT include:

• Foreign exchange companies 2

• Clearing houses

• Depositories

• Money brokers

• Brokering institutes

• Asset management businesses

• Trading houses

Ultimately, the use of these codes make the transfer of funds safe, secure, and relatively speedy.

What does a SWIFT code look like?

A SWIFT code will contain between 8 and 11 numbers, broken down into either three or four different sections. This variance might sound confusing, but it only happens when a city or town has more than one branch of a specific bank.

Let’s break down how a SWIFT code might look:

• AAAA - Bank code

• BB - Country code

• CC - Location code

• 123 - Branch code

• Bank code. This is an alphabetical, four-digit code which usually looks a little like a shortened version of a bank’s name. For example, Barclays’ bank code is “BARC”.

• Country code. Two letters are then used to identify the country the bank can be found in. Great Britain appears as “GB”. Other country codes include:

  • US – The USA

  • CA – Canada

  • AU – Australia

  • DE – Germany

  • JP – Japan

• Location code. Made up of either two letters or numbers, this lets someone know what region the particular branch can be found in.

• Branch code. This section is only needed when a location has more than one branch. It’s a three-digit addition to some SWIFT codes which helps identify the specific branch which a transfer is coming from or going to.

How do I find my bank’s SWIFT code?

Once you know what you’re looking for, it should be a little easier to spot your bank’s SWIFT code should you ever need it. There are plenty of places you can quickly find a SWIFT code – even if it’s for a bank other than your own. Some of the best places to look are:

• By searching on the bank’s website

• Looking at one of your own bank statements

• Logging into online banking and searching for it on the app

• Searching on Google (make sure any information you find is backed up by a reliable source)

Most banks understand their customers’ needs. They’ll usually publish their SWIFT code online to make it as easy as possible to locate.

In the unlikely event that you’re still not able to locate a SWIFT code, contact the bank’s customer centre for your country and ask them about a specific branch directly.

It’s also important to know the code of the person or company who’s sending you money. You may need to directly reach out to them and ask, if it’s not possible to find their bank’s code online anywhere.

What is the difference between SWIFT and IBAN?

You may also have heard the term IBAN. This stands for International Bank Account Number. While the two are closely related (and often work together), there’s a key difference.

Where a SWIFT code identifies your bank on an international level, an IBAN is the number given to your specific account. It’s a numerical code (sometimes as long as 34 digits) which is unique to each account you use. It’s used alongside your regular account number and sort code to make payments overseas.

In the UK, the formatting for an IBAN uses 22 digits. It will be broken down in the following way:

• AA - Country code

• 12 - Check digits

• XXXX - Bank code

• 123456 - Branch code

• 12345678 - Bank account number

• Country code – The country your bank is located in

• Check digits – Numbers used to verify your IBAN

• Bank code – A code to identify your bank

• Branch code – The bank branch you’re transferring from

• Bank account number – Your actual account number

You may be asked to provide both an IBAN and SWIFT code in order for money to be transferred where you want overseas. Unlike SWIFT codes, IBANs are not used in every country in the world.

You’ll often be able to find this number on the top right of a bank statement. You can also look for it using your bank’s online services, or even by using an IBAN calculating tool. Again, if all else fails make sure to reach out to your bank directly for your number.

How do SWIFT transfers work?

In order for a SWIFT transfer to work, you’ll need all of the following information:

• Name of the person who’s receiving the transfer

• The address of the person receiving the transfer

• Name and address of the bank receiving the transfer

• SWIFT code of the bank

• Recipient’s account number or IBAN

Once you’ve gathered this information, the transfer of your money to a foreign bank account begins. This is the process for a typical transfer:

1. Identification check. Customers sending an international payment may be asked for some form of virtual identification to ensure they’re who they say they are. It’s at this stage you’ll also be asked to provide things like a SWIFT code, IBAN, and personal details of you and your recipient.

2. Exchange rate. Your bank or transfer company will next need to confirm an exchange rate. This will be determined according to whatever the rate is at the time of sending. Exchange rates will fluctuate a lot, so be sure to do what you can to understand when is or isn’t a good time to move money.

3. Sending money. Perhaps to no great surprise, you’ll need to send your funds in order for them to be passed on. If you’re dealing with a bank, they will need your money before your funds are exchanged. The opposite is true for a transfer company, where you’ll need to pay beforehand.

4. Money receiving and conversion. Either way, step four sees the money received and converted into the currency of the destination you’re transferring to.

5. Paying out to foreign account. Once that has been confirmed, the money will be transferred to the account of the person you’re paying.

The time it takes for this process to complete will vary, depending on the country you’re transferring to, the banking procedures there, and even the time zone it’s in.

Do you have a better understanding of how SWIFT codes work? The most important thing to remember is that you’ll only ever need to use one when moving or receiving money from overseas. If you’re ever confused, refer back to this guide, or get in touch with us directly for more help and support.

SWIFT Codes: FAQ

Do you need SWIFT codes for international transfers?

Yes. A SWIFT code will help identify your bank on an international level, making it safe, easy, and secure to transfer money all across the world. You’ll also need to have the name of your branch, its address, and the name of the person receiving money

What countries are in SWIFT?

There are over 200 countries currently in SWIFT. For a detailed breakdown of who is part of the group, you can browse this page. A notable recent set of legislation saw the banning of Russian banks from SWIFT, as a result of the ongoing crisis in Ukraine.

Does every branch have a SWIFT code?

This will vary depending on the bank. Larger banks might have individual codes for every branch, while smaller companies may have all international transfers go through their primary office – meaning they only need one.

This communication is intended for marketing purposes only and does not constitute or provide legal, tax, investment or financial planning related advice.