The financial industry is one of the fastest-growing sectors in the world today. Companies in this sector have welcomed digital transformation to make their business processes more efficient. Over these years, some basics remain unchanged due to their usefulness. As it is often said, “if it is not broken, don’t fix it.” IBAN, BBAN, and BIC are some codes people dealing with banks have certainly come across. Even though these codes have been around for decades, they are still confusing to lots of users. So, in this article, we will explain all these codes, their structure and where you can find them.
IBAN is short for International Bank Account Number. From its name, we can deduce that it was created to ensure bank accounts can be identified across different countries. It is an international standard for displaying a bank account number. An IBAN is designed to simplify and ensure that your money gets to the right destination internationally as quickly as possible. It holds all the routing information needed for a bank-to-bank transfer to occur.
The IBAN was first introduced in 1997 to reduce the confusion brought about by different national standards for bank account identification. The European Committee introduced this system for Banking Standards (ECBS) and Internation Organization for Standardization (ISO).
The first iteration of this system was called ISO 13616: 1997. Since then, it has undergone several changes, with the latest version being ISO 13616-2:2007. As of 2022, 82 countries are currently using the IBAN numbering system.
The structure of the IBAN code is straightforward to understand since it was created to simplify the identification of international transactions. It is made up of up to 34 alphanumeric characters depending on the specific country:
Since this number is quite long and cumbersome, the IBAN is now expressed in groups of four, demarcated by spaces to ensure readability. The last group of digits may vary in length since not all IBANs are a factor of four. However, machines don’t have this problem. So, when transmitted electronically, the spaces that separate the groups are not added.
The IBAN can always be found on the bank statement, mostly at the top left or right corner of the paper. Also, with the level of digital transformation nowadays, the IBAN can be found in the bank application when you log into your account. It is also not uncommon for some banks to display the IBAN directly on the debit cards.
The full meaning of BBAN is Basic Bank Account Number, which represents a country-specific bank account number. No unified format has been adopted, and it varies considerably depending on the standards of each nation. This confusion led the ISO and ECBS to introduce the IBAN to organise and facilitate international transfers.
For each specific country, the BBAN consist of case-insensitive alphanumeric characters and must have a fixed length. It comprises the bank account number, branch code, and routing number. The account numbering system differs from country to country and can consist of up to 30 alphanumeric characters.
For example, in the UK, the BBAN consists of 18 alphanumeric characters. The first four are letters that represent the bank identifier, followed by six numbers representing the bank branch. The rest of the characters are the customer’s account number.
BIC stands for Bank Identification Code. This number varies between 8 to 11 digits and is used to identify specific banks during international monetary transactions. It is often regarded as the digital postal code for the bank and ensures that the money gets to the right bank anywhere in the world.
SWIFT is another synonym for BIC, and it stands for Society for Worldwide Interbank Financial Telecommunication. These terms are used interchangeably and mean the same thing.
All BIC codes have the same structure for easy identification and use worldwide:
International payments rely on a broader network of correspondent banks, which work together to transfer money until it reaches the recipient. The IBAN, BBAN, and BIC codes ensure that the transfer is fast and without errors. So, it is always important to ensure that these codes are accurate before making any transfers. Bank transfers are just one of the many ways to transfer money internationally, and every business requires a reliable partner that helps to process payments from clients. Payadmit offers dozens of payment options and solutions for businesses. Contact us for more information.