Payments Training Hub
BIC: defined by ISO 9362 PAYMENT OPERATIONS STARTED LIVE 01 BIC - Business Identifier Code ACTIVE 02 Example makes the structure clear - An example makes the structure clear. QUEUED 03 Eleven character BIC - adds a three character branch code QUEUED 04 BICs - status on SWIFTNet. QUEUED 05 BIC - IBAN, a sort code, or an account number. QUEUED A BIC, or Business Identifier Code, is defined by the ISO 9362 standard and identifies a financial institution or a branch of that institution. Step 1 of 5 BIC: defined by ISO 9362 STARTED BIC Business Identifier Code ACTIVE Example makes the structure clear An example makes the structure clear. QUEUED Eleven character BIC adds a three character branch code QUEUED BICs status on SWIFTNet. QUEUED BIC IBAN, a sort code, or an account number. QUEUED A BIC, or Business Identifier Code, is defined by the ISO 9362 standard and identifies a financial institution or a branch of that institution.
Example makes the structure clear PAYMENT OPERATIONS IN PROGRESS LIVE 01 BIC - Business Identifier Code DONE 02 Example makes the structure clear - An example makes the structure clear. ACTIVE 03 Eleven character BIC - adds a three character branch code QUEUED 04 BICs - status on SWIFTNet. QUEUED 05 BIC - IBAN, a sort code, or an account number. QUEUED An example makes the structure clear. Step 2 of 5 Example makes the structure clear IN PROGRESS BIC Business Identifier Code DONE Example makes the structure clear An example makes the structure clear. ACTIVE Eleven character BIC adds a three character branch code QUEUED BICs status on SWIFTNet. QUEUED BIC IBAN, a sort code, or an account number. QUEUED An example makes the structure clear.
Eleven character BIC PAYMENT OPERATIONS IN PROGRESS LIVE 01 BIC - Business Identifier Code DONE 02 Example makes the structure clear - An example makes the structure clear. DONE 03 Eleven character BIC - adds a three character branch code ACTIVE 04 BICs - status on SWIFTNet. QUEUED 05 BIC - IBAN, a sort code, or an account number. QUEUED An eleven character BIC adds a three character branch code to the eight character base. Step 3 of 5 Eleven character BIC IN PROGRESS BIC Business Identifier Code DONE Example makes the structure clear An example makes the structure clear. DONE Eleven character BIC adds a three character branch code ACTIVE BICs status on SWIFTNet. QUEUED BIC IBAN, a sort code, or an account number. QUEUED An eleven character BIC adds a three character branch code to the eight character base.
BICs: also classified by their PAYMENT OPERATIONS IN PROGRESS LIVE 01 BIC - Business Identifier Code DONE 02 Example makes the structure clear - An example makes the structure clear. DONE 03 Eleven character BIC - adds a three character branch code DONE 04 BICs - status on SWIFTNet. ACTIVE 05 BIC - IBAN, a sort code, or an account number. QUEUED BICs are also classified by their status on SWIFTNet. Step 4 of 5 BICs: also classified by their IN PROGRESS BIC Business Identifier Code DONE Example makes the structure clear An example makes the structure clear. DONE Eleven character BIC adds a three character branch code DONE BICs status on SWIFTNet. ACTIVE BIC IBAN, a sort code, or an account number. QUEUED BICs are also classified by their status on SWIFTNet.
BIC is not the same PAYMENT OPERATIONS COMPLETE LIVE 01 BIC - Business Identifier Code DONE 02 Example makes the structure clear - An example makes the structure clear. DONE 03 Eleven character BIC - adds a three character branch code DONE 04 BICs - status on SWIFTNet. DONE 05 BIC - IBAN, a sort code, or an account number. ACTIVE A BIC is not the same as an IBAN, a sort code, or an account number. Step 5 of 5 BIC is not the same COMPLETE BIC Business Identifier Code DONE Example makes the structure clear An example makes the structure clear. DONE Eleven character BIC adds a three character branch code DONE BICs status on SWIFTNet. DONE BIC IBAN, a sort code, or an account number. ACTIVE A BIC is not the same as an IBAN, a sort code, or an account number.

Key points of this lesson, in order.

0:00 / 3:27 Step 1 of 5

The BIC Code: ISO 9362 and How a BIC Identifies an Entity

SWIFT Fundamentals, Lesson 4 of 7, Narration 3:27, D04 Messaging and standards

ClearingSWIFTIBAN

What you will learn

Your objective. By the end of this lesson, you will be able to explain BIC code: ISO 9362 and how a BIC identifies an entity. A BIC, or Business Identifier Code, is defined by the ISO 9362 standard and identifies a financial institution or a branch of that institution.

Why it matters. A payment sent to DEUTDEFFXXX will be handled by the head office, while a payment sent to DEUTDEFF500 will be handled by that specific branch, which may have its own accounts and operations team.

Chapter objective: Learner explains SWIFT fundamentals, SWIFTNet, message categories and types, BIC structure under ISO 9362, and the mandatory fields of an MT103. Learner uses real examples with amounts, banks and message names to show how the topic works in practice.

Key learning points

  • BIC: defined by ISO 9362
  • Example makes the structure clear
  • Eleven character BIC
  • BICs: also classified by their
  • BIC is not the same

Key terms

Clearing: The process of exchanging payment instructions between banks and calculating what each bank owes the others.

SWIFT: The Society for Worldwide Interbank Financial Telecommunication, a member owned cooperative that provides secure messaging services for financial institutions.

IBAN: An international bank account number that identifies a customer account in a standard format across countries.

Payment flow diagram showing The BIC Code: ISO 9362 and How a BIC Identifies an Entity.

Practise this lesson

Exercise

Apply the concept in this lesson to a real banking scenario.

Use the definition, the example and the key points in this lesson.

  1. What to do. Explain the concept in your own words, give a banking example with an amount, and state what goes wrong if it is misunderstood.

Correct result. A correct answer names the concept accurately, uses a realistic banking example with a concrete amount, and identifies the consequence of getting it wrong.

Why. Understanding is not memorising a definition. It is being able to explain it, apply it, and spot the failure it prevents.

Check your understanding

Practice question

Which of the following best describes BIC code: ISO 9362 and how a BIC identifies an entity?

Takeaway and next step

What to remember

The BIC to route the SWIFT message to the right bank, and the IBAN to credit the right customer account once the message arrives.

Open the message type from this lesson and inspect its fields, then find the field that carries the amount.

Open the ISO 20022 Message Explorer →

Builds on "SWIFT Message Types, Groups and Categories".

Transcript and full text

Show transcript

A BIC, or Business Identifier Code, is defined by the ISO 9362 standard and identifies a financial institution or a branch of that institution. It is either eight characters long, which identifies the head office or the institution as a whole, or eleven characters long, which identifies a specific branch. The first four characters are the bank code, the next two are the ISO country code, the next two are the location code, and the final three, when present, are the branch code. Every SWIFT message carries a sender BIC and a receiver BIC, so the BIC is the routing address for the whole system. An example makes the structure clear. The BIC BNPAFRPP is the eight character BIC for BNP Paribas in France. BNPA is the bank code for BNP Paribas, FR is the country code for France, and PP is the location code for Paris. The BIC BSCHESMM is the eight character BIC for Banco Santander in Spain, where BSCH is the bank code, ES is the country code for Spain, and MM is the location code for Madrid. The BIC PNBPUS3N is the eight character BIC for Wells Fargo in the United States, where PNBP is the bank code, US is the country code, and 3N is the location code for New York. An eleven character BIC adds a three character branch code to the eight character base. The code DEUTDEFF500 identifies a specific branch of Deutsche Bank in Germany, where DEUT is the bank code, DE is the country code, FF is the location code for Frankfurt, and 500 is the branch code. When the branch code is XXX, the BIC refers to the head office or the primary office, so DEUTDEFFXXX means Deutsche Bank head office in Frankfurt. A payment sent to DEUTDEFFXXX will be handled by the head office, while a payment sent to DEUTDEFF500 will be handled by that specific branch, which may have its own accounts and operations team. BICs are also classified by their status on SWIFTNet. A connected BIC belongs to an institution that is directly connected to SWIFTNet and can send and receive messages. A non connected BIC belongs to an institution that is registered on SWIFT but does not have its own connection, often because it uses a service bureau or a correspondent bank to receive messages. A live BIC is active and can be used for live payments, while a non live BIC is registered but not yet active. Operations teams must check the BIC directory before sending a payment, because a payment sent to a non live BIC will be rejected. A BIC is not the same as an IBAN, a sort code, or an account number. The IBAN identifies a specific customer account, such as ES6300491800132710387658 for a Santander account in Spain, while the BIC identifies the bank that holds that account. The sort code identifies a branch in a domestic clearing system, such as 20-00-00 for a Barclays branch in London, while the BIC identifies the bank on SWIFTNet. A full payment instruction therefore needs both. The BIC to route the SWIFT message to the right bank, and the IBAN to credit the right customer account once the message arrives. Worked example with validation: a payment engine receives a payment instruction naming the beneficiary bank BIC COBADEFFXXX, and before it builds the MT103 it checks the BIC against the SWIFT BIC directory that it downloads every week. The directory says COBADEFFXXX is a live connected BIC for Commerzbank in Frankfurt, so the engine accepts it and routes the message. If the instruction had named a BIC that is registered but not live, the engine would reject the payment before sending, because a payment sent to a non live BIC is rejected by SWIFT and costs a day. Failure and recovery: a wrong BIC is one of the most common payment errors, and the cost depends on where it is caught. If the payment engine catches it before sending, the fix is a corrected BIC and a resend, which costs minutes. If the payment is sent with a wrong BIC, SWIFT may reject it, or worse, deliver it to the wrong bank, which must then return it, and the return can take two to three days while the two banks exchange MT199 messages to confirm the error. A BIC that is one character wrong may not match any bank, so the payment is rejected, but a BIC that names a real bank in the wrong country sends the funds to the wrong place. For a business analyst, product owner or subject matter expert, the BIC requirement must state the structure, eight characters for the institution and eleven for a branch, the meaning of each part, bank code, country code, location code and branch code, and the rule that a branch code of XXX means the head office. The requirement must also state that a BIC is not an account number, not an IBAN and not a legal entity identifier, so the payment instruction needs both a BIC to route the message and an IBAN to credit the right customer account. Source: ISO 9362 Business Identifier Code; SWIFT BIC directory guide; last reviewed 7 November 2026.

A BIC, or Business Identifier Code, is defined by the ISO 9362 standard and identifies a financial institution or a branch of that institution. It is either eight characters long, which identifies the head office or the institution as a whole, or eleven characters long, which identifies a specific branch. The first four characters are the bank code, the next two are the ISO country code, the next two are the location code, and the final three, when present, are the branch code. Every SWIFT message carries a sender BIC and a receiver BIC, so the BIC is the routing address for the whole system.

An example makes the structure clear. The BIC BNPAFRPP is the eight character BIC for BNP Paribas in France. BNPA is the bank code for BNP Paribas, FR is the country code for France, and PP is the location code for Paris. The BIC BSCHESMM is the eight character BIC for Banco Santander in Spain, where BSCH is the bank code, ES is the country code for Spain, and MM is the location code for Madrid. The BIC PNBPUS3N is the eight character BIC for Wells Fargo in the United States, where PNBP is the bank code, US is the country code, and 3N is the location code for New York.

An eleven character BIC adds a three character branch code to the eight character base. The code DEUTDEFF500 identifies a specific branch of Deutsche Bank in Germany, where DEUT is the bank code, DE is the country code, FF is the location code for Frankfurt, and 500 is the branch code. When the branch code is XXX, the BIC refers to the head office or the primary office, so DEUTDEFFXXX means Deutsche Bank head office in Frankfurt. A payment sent to DEUTDEFFXXX will be handled by the head office, while a payment sent to DEUTDEFF500 will be handled by that specific branch, which may have its own accounts and operations team.

BICs are also classified by their status on SWIFTNet. A connected BIC belongs to an institution that is directly connected to SWIFTNet and can send and receive messages. A non connected BIC belongs to an institution that is registered on SWIFT but does not have its own connection, often because it uses a service bureau or a correspondent bank to receive messages. A live BIC is active and can be used for live payments, while a non live BIC is registered but not yet active. Operations teams must check the BIC directory before sending a payment, because a payment sent to a non live BIC will be rejected.

A BIC is not the same as an IBAN, a sort code, or an account number. The IBAN identifies a specific customer account, such as ES6300491800132710387658 for a Santander account in Spain, while the BIC identifies the bank that holds that account. The sort code identifies a branch in a domestic clearing system, such as 20-00-00 for a Barclays branch in London, while the BIC identifies the bank on SWIFTNet. A full payment instruction therefore needs both. The BIC to route the SWIFT message to the right bank, and the IBAN to credit the right customer account once the message arrives.

Worked example with validation: a payment engine receives a payment instruction naming the beneficiary bank BIC COBADEFFXXX, and before it builds the MT103 it checks the BIC against the SWIFT BIC directory that it downloads every week. The directory says COBADEFFXXX is a live connected BIC for Commerzbank in Frankfurt, so the engine accepts it and routes the message. If the instruction had named a BIC that is registered but not live, the engine would reject the payment before sending, because a payment sent to a non live BIC is rejected by SWIFT and costs a day.

Failure and recovery: a wrong BIC is one of the most common payment errors, and the cost depends on where it is caught. If the payment engine catches it before sending, the fix is a corrected BIC and a resend, which costs minutes. If the payment is sent with a wrong BIC, SWIFT may reject it, or worse, deliver it to the wrong bank, which must then return it, and the return can take two to three days while the two banks exchange MT199 messages to confirm the error. A BIC that is one character wrong may not match any bank, so the payment is rejected, but a BIC that names a real bank in the wrong country sends the funds to the wrong place.

For a business analyst, product owner or subject matter expert, the BIC requirement must state the structure, eight characters for the institution and eleven for a branch, the meaning of each part, bank code, country code, location code and branch code, and the rule that a branch code of XXX means the head office. The requirement must also state that a BIC is not an account number, not an IBAN and not a legal entity identifier, so the payment instruction needs both a BIC to route the message and an IBAN to credit the right customer account. Source: ISO 9362 Business Identifier Code; SWIFT BIC directory guide; last reviewed 7 November 2026.

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