how international bank account numbers ibans work
the iban consists of a two letter country code followed by two check digits and up to thirty five alphanumeric characters these alphanumeric characters are known as the basic bank account number bban it is up to the banking association of each country to determine which bban they will select as the standard for that country s bank accounts an iban will be used when sending interbank transfers or wiring money from one bank to another especially across international borders in the register of countries currently using the iban system several examples are as follows the u s and canada are two major countries that do not use the iban system however they recognize the system and process payments according to the system 67iban examplean iban is made up of a maximum of 34 alphanumeric characters it is made up of the following components the chart below shows an example of an iban for a hypothetical bank in finland the iban would be fi21 1234 5698 7654 3210 8iban vs swift codesthere are two internationally recognized standardized methods of identifying bank accounts when a transfer is being made from one country to another the international bank account number iban and the society for worldwide interbank financial telecommunication swift code the difference between the two methods lies in what they identify a swift code is used to identify a specific bank during an international transaction whereas iban is used to identify an individual account involved in the international transaction both play an essential role in the smooth running of the international financial market the swift system predates attempts to standardize international banking transactions through iban it remains the method by which the majority of international fund transfers are made one of the main reasons for this is that the swift messaging system allows banks to share a significant amount of financial data this data includes the status of the account debit and credit amounts and details related to the money transfer banks often use the bank identifier code bic instead of the swift code however the two are easily interchangeable both contain a mix of letters and numbers and are generally between eight and 11 characters in length requirements for international bank account numbersthe iban developed out of diverging national standards for bank account identification varying uses of alphanumeric forms to represent specific banks branches routing codes and account numbers often led to misinterpretations and or omissions of critical information from payments to smooth this process the international organization for standardization iso published iso 13616 1997 in 1997 9 shortly after the european committee for banking standards ecbs published a smaller version believing the original flexibility allowed in the iso version was unworkable in the ecbs s version they allowed only upper case letters and a fixed length iban for each country 10since 1997 a new version the iso 13616 2003 replaced the initial ecbs version 11 a subsequent version in 2007 stipulated that iban elements must facilitate the processing of data internationally in both financial environments and among other industries however it does not specify any internal procedures including but not limited to file organization techniques storage media or languages 12who uses an iban iban was first created to facilitate electronic payments between banks across europe 13 since then it has expanded worldwide although not all banks and not all regions have joined the standard and you may still need to rely on an alternative system such as swift north american australian and asian countries do not use the iban for domestic money transfers and will only do so when sending a payment to a country that has adopted the iban 14