BIC stands for Bank Identifier Code and is a unique identifying system for banks located in the European Union and European Economic Area. If you wish to send money to another bank -- whether in the same country or with the EU/EEA -- then you will need to enter a BIC code when filling out a transfer form or providing your local bank branch with your transaction details. BIC is used in conjunction with a International Bank Account Number (IBAN) -- within the European Union and European Economic Area -- to conduct international bank transfers.
The BIC system was initially developed for sending bank transfer via telecommunication systems, and latterly, via digital systems such as the World Wide Web and the Internet. A BIC and IBAN code should be printed on a customers monthly bank statement in the UK; you can find BIC codes for other banks by either visiting their website or a website which provides a database of BIC codes (although it is possible that third party websites may list incorrect codes).
The BIC code is made up of either a 8 or 11 character format: the first four digits refer to the bank code; the next two digits to the country code; the next two digits to billing instructions; and finally, the last three (optional) digits locate a specific branch of a bank. For example, a simple HSBC BIC code would be something like the following:
BIC and SWIFT are usually assumed to be the same thing, and are sometimes referred to as 'BIC SWIFT'. SWIFT stands for Society for Worldwide Interbank Financial Telecommunication, and like BIC, comes in a 8 or 11 alphanumeric character format. The difference is that BIC and IBAN codes are not used within the United States or countries outside of the Organisation for Economic Co-operation and Development (OECD) and EU+EEA. SWIFT is used to identify banks and financial institutions globally, and is therefore more extensive in its reach; especially as its used within the United States, which is home to the world's reserve currency.