Despite 28 years of standardization and a big marketing push by SWIFT in the last 5 years, there is still a lot of confusion over what a BIC is. It’s quite understandable given the confusing mess of acronyms in the payments industry: BICs and IBANs, BEIs, even LEIs. So take a moment to look at what exactly a SWIFT BIC is.
What is a BIC?
The SWIFT BIC is a Business Entity Identifier (BEI) defined by the ISO 9362 standard. In its original incarnations, BIC stood for “Bank Identifier Code” and was meant to as an address for serving SWIFT messages between banks. In the 2009 update to the standard, SWIFT chose to start targeting corporations, and as such updated the BIC acronym to mean “Business Identifier Code”.
How is the standard structured?
Every BIC has:
- 4 alpha character institution code
- 2 alpha character country code (as defined by ISO 3166-1 alpha-2 standard)
- 2 alphanumeric character location code (or "party suffix" in the 2014 update)
- 3 alphanumeric character branch code (optional)
For example: lets take the fictional Alphabetisch group, based out of Ettenheim, has the following SWIFT code
“ABCD” for Alphabetisch Group
“DE” for Germany
“6” designating time zone, 1 designating that this BIC is not inactive
Notice the “1” in the second character of the location code (8th position in the BIC)? That designates that this particular code is innactive (either because it has been disconnected or because it has not been connected yet).
You can see there are only 8 characters here, making this BIC8 notation. Should the company choose to institute branch codes, this would extend to BIC11 notation.
Note: If a system or form asks you to enter a BIC11 address but the company you are messaging only provided you with a BIC8 notation, you can add XXX on the end.
How do I find my, or my bank’s BIC code?
One of the most common queries online is “where do I find BIC codes?” There are many websites listing BIC codes, but their veracity is questionable. Instead, use one of these three sources:
The Official SWIFT ISO 9362 Directory
A 35 MB, 4,200+ page, PDF document of BIC codes. Not the nicest thing to browse through, though it provides the opportunity to print it out as a hardcopy reference (all 4200 pages of which you’d need to reprint the following month, of course, when it becomes obsolete).
The free SWIFT Online BIC Search (also known as BIC Search Lite or BSL)
The BSL is a basic directory of all SWIFT codes. All searches must include a BIC or institution name, but you can also search by institution and city/country.
SWIFTref is SWIFT’s premium reference data product, offered on a subscription basis.
What’s next for SWIFT BICs?
The 2014 revision to the ISO9362 standard has us in a transition period ending in November 2018. There isn’t much in the way of changes, other than some rewording, role definitions, and policy changes.
First off, the four digit institution code will be replaced by “business party prefix” which is, yes, a 4 alpha character code. The main difference is that companies will no longer be able to submit a request for an institution code, it will be assigned instead.
The location code will also become the "party suffix", which no longer holds specific meaning. With this update, there's no need to delete and replace a SWIFT code when a company changes time zones.
SWIFT’s roles will also be separated more, with an increased distinction between SWIFT as an ISO Registration authority and as the provider of the SWIFT Network.
Finally, codes like Alphabetisch’s will no longer exist. By November 2018 all codes with a ‘1’ in position 8 will be deleted and recreated without the ‘1’.
BICs are not difficult to understand, nor are they hard to find. They are 8 to 11 character business entity identifiers, managed by SWIFT, meant to provide a SWIFTNet address to banks and businesses. To find a specific BIC just visit BIC Search Lite or sign up for a SWIFTRef account.