SWIFT (Society of Worldwide Interbank Financial Telecommunications) also known as BIC (Bank Identification Code) was established 40 years ago by a consortium of banks from 15 countries and today, it is used by nearly 10,000 of financial organizations such as banks and securities institutions in nearly any country. SWIFT offers standardized and secure messaging between dealers and brokers in foreign exchanges. It also helps during the pre-settlement process across many asset classes.
SWIFT is now used as the most commonly accepted format for BIC (Bank Identifier Codes) approved by the ISO and it is a highly unique identification for a specific bank. These codes are usable for transferring fund between financial organizations and for wire transfer across nations.
A SWIFT code might be consisted of 8 to 11 characters, preceded by a bank code (4 characters), with only letters used. This should be followed by a country code (2 characters, which is based by 3166:1 standard. Location and branch codes may use both letters and numbers. An 8 digit code is quite likely a SWIFT for the primary office of a bank, while 11 characters are likely for a branch office.
A major financial organization may carry out thousands of money transfer each day and SWIFT is essential for secure connectivity and compatible standards between banks for a smoother operation. The standard should help financial organizations regulators seeking to have better control on risks associated with foreign exchange and international money transfer despite the explosive growth in the amount of trading.
Central banks have also developed appropriate market infrastructure systems for clearing and settling high-value interbank payments, such as Continuous Link Settlement system (CLS) and Real-Time Gross Settlement system (RTGS). These systems should help them eliminate unnecessary settlement risks. The multilateral and criticality aspects of international money transfer make SWIFT a trusted 3rd party system that offers proven, reliable and secure services. Some businesses are also using SWIFT for clearing common payments such as salaries, utility bills and pensions within certain domestic communities. With SWIFT, banks can achieve highly efficient payment mechanism and reduce the number of payment channels.
When working with the Control Data section, consumers should consider SWIFT code as one of the most important components. Consumers should enter SWIFT code if they want conduct an international payment.
It is still possible to make money transfer without using SWIFT code, but consumers still need to employ the service of money transfer companies and other non-banking providers. Money transfer companies have their own internal transactions system, which allow almost instantaneous money transfer. Both senders and receivers need to provide a valid ID.
Before traveling abroad, people should familiarize themselves with the banking details of the destination country they are heading to. This should help them avoid likely mistakes related to SWIFT codes. During a business trip, people should consult their money transfer specialists to obtain detailed and accurate information. To obtain SWIFT code of a bank, visit the Swift.com/biconline and enter the name of the bank. The result should give you the SWIFT number assigned to the company. Consumers can use this feature for free when looking for basic information, but more detailed data requires paid subscription.